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Foreign sales could keep littoral combat ship program afloat

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Rick Barrett/Milwaukee Journal Sentinel
April 23, 2014

The littoral combat ship program that has supported thousands of jobs in Wisconsin could get a boost from sales to foreign governments as early as this year.

Defense contractor Lockheed Martin Corp. says it's in negotiations with two unnamed countries in the Middle East and Southeast Asia to provide them with international versions of the U.S. Navy vessels being built at the Marinette Marine shipyard in Marinette.

The two countries are seeking 14 of the ships that Lockheed Martin is marketing to foreign governments as a multi-mission combat vessel. Company officials said they expect the first sale sometime this year to a Southeast Asian nation, and that they're close to a deal with a country in the Middle East.

More than a dozen foreign governments have shown interest in the littoral combat ship, according to the company, which has so far built them exclusively for the U.S. Navy.

"We have created several ship designs for international navies. We've offered our multi-mission combat ship, which can be built in various lengths — 85, 118 and 150 meters...by partner Marinette Marine," said Joe North, vice president of littoral ship systems at Lockheed Martin.

Diesel engines for the ships are manufactured at Fairbanks Morse in Beloit.

The U.S. Navy's littoral combat ship program has created several thousand jobs in Marinette and has supported hundreds of Wisconsin and Michigan suppliers. Two of the warships have been completed in Marinette and four more are under construction.

The Navy envisions a fleet of the fast vessels that can operate in waters as shallow as 20 feet and could be used for a variety of missions, such as fighting piracy off the African coast, clearing harbors of underwater mines and hunting for submarines.

Navy officials say they want 52 of the vessels, although the program has been curtailed to 32 for now. The Department of Defense is weighing various options, including a redesign, because critics have said the ships are too lightly armed and impractical for many missions.

There's a backlog of work until 2018, which is why the shipyard is still hiring even as the Navy's plans remain unclear.

Sales to foreign governments could provide years worth of additional shipbuilding in Marinette, and for a shipyard in Mobile, Ala., that's building a different version of the vessel, said James Hasik with the Brent Scowcroft Center on International Security in Washington, D.C.

"I think this opens up opportunities not only for shipbuilding in Wisconsin, but also for the design in Alabama," Hasik said.

Lockheed Martin predicts it could sell at least 50 littoral combat ships to foreign navies.

Similar to the U.S. Navy version of the ships, the international vessels could allow for interchangeable mission packages for mine sweeping, surface warfare and hunting submarines. Many countries could use the ships for protecting coastal waters and shipping channels, such as the Strait of Hormuz, which connects the Persian Gulf with the Arabian Sea.

"There are a lot of countries that don't necessarily need a frigate to cross the Pacific Ocean," Hasik said.

Some of the deals could take a while to complete because they would need approval from the U.S. government's foreign military sales program. There's also no guarantee the ships would be built in Marinette, although it could be cheaper because the shipyard is familiar with the design and construction.

"If somebody wants that ship, it makes sense to keep cranking them out in Wisconsin," Hasik said. "Unfortunately, there are some buyers around the world who don't always do what makes sense."

Case in point: Canada has a shipbuilding strategy that demands that all Royal Canadian Navy vessels be built domestically, even if it's less expensive to get them from another country such as the U.S. or South Korea.

It might make sense politically, and for some defense strategic reasons, Hasik said. But economically, it's foolish.

Every dollar spent on building ships at far above market prices is a dollar that can't be spent in areas such as designing and building new aircraft or space satellites, he added.

Still, shipyard work is important in the communities where it provides thousands of jobs. It's also important, for national security interests, that a country maintain some shipbuilding capacity.

The littoral combat ship program has kept Marinette's shipyard operating when little or no other work has been available. Thus, changes in the Navy's acquisition of the ships, or sales to foreign governments, is of keen interest to the shipyard's Italian owner and its employees.

About half of the U.S. shipyards are one contract away from going out of business, Sean Stackley, assistant secretary of the Navy, said this month in a Senate committee hearing on Navy shipbuilding programs.

"Without our strategic industrial base, we don't have a Navy, and so we have to be very mindful of the decisions we make," Stackley said.



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