Huntington Ingalls executive: Trump Navy fleet plan 'not bad'
By HUGH LESSIG | Daily Press (Newport News, Va.) | Published: June 1, 2017
NEWPORT NEWS, Va. (Tribune News Service) — Key members of Congress have panned President Trump's 2018 proposed budget for the Navy fleet, but the man who heads the nation's largest military shipbuilder is taking a glass-half-full approach.
Mike Petters, president and CEO of Huntington Ingalls Industries, said Trump could have gone farther in his budget submission — and Congress may decide to do just that — but sounded like someone who could live with the proposal as submitted.
"I'm not altogether displeased with the (2018) budget, particularly in the wake of what we got out of the 2017 budget," he told a conference Wednesday. "It's not going to motivate the supply chain like it needs to be, but it's not going to demotivate them either."
Bottom line: "It's not great, not perfect, but it's not bad."
Petters spoke and answered questions at a conference in New York hosted by investment firm Bernstein.
The Navy and Trump administration spent weeks arguing for a dramatic expansion of the Navy fleet, from the current 275 ships to 355. But the submitted budget leans more toward funding readiness, which includes maintenance and training. Navy leaders are eyeing a more robust buildup of the fleet starting in 2019.
Still, the plan gives HII something to like. It would continue funding for the Gerald R. Ford-class aircraft carrier program. Construction would continue on the John F. Kennedy, the second ship of the class, and start in a big way on the the future USS Enterprise.
It sets aside money for two additional Virginia-class attack submarines and funds advance work on the Columbia-class ballistic missile submarine program.
Huntington Ingalls' Newport News shipyard is the exclusive builder of nuclear-powered aircraft carriers for the Navy and one of two yards that builds nuclear-powered submarines.
Petters also reminded his audience that budget season is only beginning. Lawmakers such as Rep. Rob Wittman, R-Northumberland, have said the plan lacks a sense of urgency. Sen. John McCain, R-Ariz., dismissed the budget as a non-starter.
In other words, what emerges from Congress could look very different from the submitted plan.
Even if the buildup won't start until 2019, Congress can send more immediate signals to the shipbuilding industrial base that it is committed to a larger fleet, Petters said.
The best way, he said, would be to authorize a two-carrier purchase, something that has been done in the past.
"That would be a huge signal to the whole industry that we're really serious about changing the size of the Navy,' he said.
As much as the shipbuilding giant would welcome that signal, Petters said it is even more crucial for the small- to medium-sized businesses that make up the supplier base and don't have the flexibility or reserves of a large corporation.
Congress currently requires an 11-carrier fleet, but it granted a waiver to drop to 10 after the former USS Enterprise was taken out of service in December 2012. A return to 11 carriers is imminent with the pending delivery of the Gerald R. Ford.
Trump has said he wants a 12-carrier fleet as part of his expansion plan.