In the 128 years since Maine’s Bath Iron Works (BIW) delivered its first gunboats to the US Navy, the nation’s oldest full-service shipyard has suffered many setbacks.
The yard prospered during World War I, but closed for lack of work after the 1921 Naval Disarmament Treaty.
Saved from bankruptcy, it prospered again during World War II, only to see its numbers drop to 350 by the end of the war.
In the post-war years, the yard suffered two debt buyouts that burdened it with debt, and then suffered a further decline at the end of the Cold War.
If General Dynamics hadn’t acquired Bath at a clearance sale in 1995, it may have long since gone from being Maine’s largest industrial employer to a rusty wasteland.
I was a consultant for General Dynamics at the time, and I remember why future CEO Nick Chabraja thought Bath was worth owning: the Arleigh Burke destroyer program.
Burke-class ships are by far the most capable surface combatants in the world, capable of simultaneously waging anti-aircraft, anti-ship and anti-submarine warfare while protecting the fleet from ballistic missile attacks.
BIW has split Burkes production with Huntington Ingalls Industries’ Ingalls Shipyard unit since Bath was awarded the contract to build the lead ship in 1985.
Almost 70 Burkes in various versions populate the fleet today, making it the Navy’s most common warship.
It has become Bath’s main franchise, the main reason an aging shipyard up a river in a cold climate continues to thrive even though the newer yards are located in more pleasant circumstances.
Currently, Bath employs 7,000 workers and hires thousands more to meet the demand for the remaining Burke destroyers, collectively known as Flight III.
But a shadow has fallen in the future path of Bath Iron Works, signaling that the yard may one day struggle to survive again.
Last month, the Navy released an overview of its future shipbuilding goals, estimating that it would only need 63 to 65 large-area fighters like the Burke in the long run.
At present there are around 90 of them, including destroyers and Ticonderoga-class cruisers, some of which were built in Bath and all of which appear to be destined for retirement.
Retiring the cruisers will not bring the numbers down where the Navy says it wants them.
As Craig hooper observed in a June 23 article for Forbes, “With 88 Arleigh Burkes in service, under construction or already licensed, the supply of the Arleigh Burke destroyer will likely cease and 27 olderâ¦ Burkes will be out of the fleet.” “
So, despite its current robust employment numbers, Bath Iron Works could face yet another near-death experience later in the decade.
The danger is exacerbated by two other factors. First, Bath lost the competition to build a new generation of frigates, a type of smaller warship that now appears to be the Navy’s preferred solution to the problem of insufficient ship numbers in the years to come.
Second, the Navy wants to build a new class of larger destroyers called DDG (X) that can provide more firepower and flexibility than Burkes, which means another competition BIW could lose.
This is not just a challenge for Bath. Huntington Ingalls will also need to find new sources of income to make up for the loss of Burkes if the Navy’s most successful post-war shipbuilding program ends later in this decade.
But Huntington Ingalls builds a wide variety of warships, including all of the country’s amphibious ships.
Bath only builds destroyers.
With the frigate opportunity gone, the shipyard’s only real hope under the Navy’s shipbuilding plan is to win the competition to build a next-generation destroyer.
Some observers consider this to be a long term, mainly due to the assumed cost structure of the shipyard.
And even if it were to prevail over the larger destroyer, the Navy’s funding profile portends a choppy start for the next-gen warship.
Bottom line: If Burke ceases production and the Navy is successful, thousands of workers will lose their jobs at Bath Iron Works.
In fact, the yard could close completely. General Dynamics does not disclose site margins, but it is clearly less profitable than other business units in the company.
If he loses his main franchise, the business case for continuing would be tenuous at best.
Unsurprisingly, the local congressional delegation is pushing to continue production of Burkes, perhaps with a further increase in upgrades to address the operational challenges that the DDG (X) is supposed to solve.
The delegation’s case is primarily based on concerns about job losses, but it convincingly demonstrates that now is not the time to end a major warship program which, in the opinion of all, works well.
Take the frigate: it will cost at least three-quarters of what a Burke makes to build, but only offer a third of the vertical launch tubes of a Burke.
It will also house a lower radar, a less capable gun and half of Burke’s rotorcraft (one against two).
Rotorcraft play a crucial role in anti-submarine warfare.
As for the next-gen destroyer, the Navy has yet to come up with a convincing case for starting a new warship program, with all the uncertainties that entails, when Burke destroyers could be modified to suit. offer the same functionality at a fraction of the cost.
You can expect to hear variations on these arguments frequently as the Maine delegation pushes to continue Burke’s production at a brisk pace.
But there should be no doubt about what lies ahead for Bath Iron Works if the Navy’s latest shipbuilding plan is implemented.
The survival of the country’s oldest full-service shipyard is not assured.
General Dynamics contributes to my think tank.