Sunday, August 7, 2022
Hawai'i Free Press

Current Articles | Archives

Monday, January 16, 2012
Billion Dollar Cost Overrun Shows US Shipyards Failing Navy and Commerce
By Selected News Articles @ 11:22 PM :: 7683 Views :: Energy, Environment, National News, Ethics

by Mike Hansen, Hawaii Shippers Council

Reports from Reuters news agency of a billion dollars in cost overruns on construction of the USS Gerald Ford aircraft carrier at Huntington Ingalls Industries Inc. (HII) demonstrates how uncompetitive major U.S. shipbuilding yards have become under the protectionist shield of the Jones Act. Noncontiguous domestic jurisdictions of the United States – Alaska, Guam, Hawaii and Puerto Rico – depend upon these yards for large commercial ship construction.

HII was formerly Northrop Grumman Shipbuilding, a division of Northrop Grumman Corporation, a major U.S. defense contractor. Grumman spun-off their shipbuilding division and it became an independent company on 03/04/2011 and is listed on the NYSE (HII.N).

HII owns and operates three of the eight major U.S. shipbuilding yards as follows:

  • Newport News Shipbuilding, Newport News, Virginia, specialize in aircraft carriers known as CVNs (carrier vessel nuclear) and attack submarines – last commercial ship delivered 06/21/1999.
  • Avondale Shipyards, New Orleans, Louisiana, specialize in building large naval amphibian warships known as LPDs (landing platform dock) – last commercial ship delivered 06/29/2006.
  • Ingalls Shipyards, Pascagoula, Mississippi, specialize in building large naval amphibian warships known as LPDs (landing platform dock) – last commercial ship delivered 03/04/1974.

HII is scheduled to close their Avondale Shipyards in 2013 due to a lack of naval work and poor performance at the yard including missing delivery dates, cost overruns and faulty work. In fact, the LPD program building amphibious assault ships for the Navy at Avondale and Ingalls has been fraught with problems. Their Newport News yard builds nuclear aircraft carriers and has also encountered problems, but they have not been nearly as serious as with the other two yards and Newport News remains profitable. Although all three HII yards have built large commercial ships in the past, they only build naval ships today.

Closure of the HII Avondale yard will reduce the number of major U.S. shipbuilding yards capable of building large deep draft self-propelled ships from 8 to 7 shipyards. Of the 7 remaining major shipbuilding yards, only three are accepting orders for large commercial ships and of the three only two are currently building commercial ships.

Problems include missed delivery dates and cost overruns that even the U.S. Navy can no longer accept. These problems lead to the HII shipyards to exit the commercial shipbuilding market, because private ship owners do not have the resources to withstand these conditions as does the U.S. Government.

This situation has made it very difficult for shipping operators in the noncontiguous trades of the United States to replace their ageing and inefficient ships with U.S.-built ships as required by the Jones Act because of very high costs and cumbersome contracting practices of the major U.S. shipbuilding yards.

Currently the average age of deep draft ships operating in the noncontiguous trades is over 28 years. Operating older ships is inherently more expensive due to higher fuel consumption, larger crews, and significantly higher maintenance costs -- all of which lead to higher freight costs including higher bunker (fuel) surcharges.

The major common carriers in the noncontiguous trades have all put off new ship purchases due to the costs of building in the U.S., in some cases the ocean carriers simply do not have the financial resources to build new ships in the U.S., and the others have simply chosen not to. If these carriers do ultimately build new ships in the U.S. it would inevitably mean much higher freight costs for the business and residents of the noncontiguous jurisdictions.


LINK: Navy Wants More Cost-Cutting from Huntington Ingalls


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

ACA Signups Hawaii

Alliance Defending Freedom

Aloha Pregnancy Care Center

American Council of Trustees and Alumni


Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Back da Blue Hawaii

Ballotpedia Hawaii

Better Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Life Alliance

Hawaii March for Life

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons

Pro-GMO Hawaii


Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii