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ANALYSIS

Shipbuilder Austal USA’s fast transport: Enticing possibilities, unclear politics

The future USNS Newport (EPF 12), built by Austal USA in Mobile, Ala.

AUSTAL USA

By LAWRENCE SPECKER | Alabama Media Group, Birmingham | Published: August 18, 2020

BIRMINGHAM, Ala. (Tribune News Service) — Docked alongside Austal USA’s shipbuilding facility on a recent weekday, in plain sight from downtown Mobile across the river, the future USNS Newport represented both the shipbuilder’s success and an open question about its future.

Austal recently announced that the ship, also known as EPF 12, the 12th Expeditionary Fast Transport built in Mobile, had completed sea trials and was ready for the U.S. Navy to take delivery. That was expected to happen toward the end of the month. In the meantime, teams within it attended to final details, like contractors finishing up a punch list on a house — if that house had a parking deck capable of holding dozens of military vehicles, including tanks, and accommodations for several hundred people and diesel-powered waterjet drives capable of pushing it all along at 40 knots.

Finishing the trials was a proud milestone both for Austal and the Newport. The question is, how many more milestones remain for the Newport’s class, and the workforce that has been building them at Austal’s Mobile shipyard since 2010?

The writing is already on the wall for the Littoral Combat Ship, Austal USA’s other Navy program. It will take Austal until 2023 or 2024 to finish building LCS 38, the future USS Pierre, the last LCS on the books. The Navy has no plans to order more. Meanwhile, construction work is well along on EPF 13, the future USNS Apalachicola. Work will begin later this year on EPF 14, the Cody, the last EPF on order.

Austal is the Mobile area’s largest industrial employer, with a workforce of about 4,000 people. There’s a lot riding on the question of what will keep them busy after the Cody and Pierre hit the water. While there won’t be any more orders for the LCS, there could be for the EPF, making it a potential lifeline to Austal’s future.

What comes next for the EPF, and the workers who build it, is unknown. It’s a swirl of politics, budgetary compromises and Navy priorities. And opportunities.

In the 2019-2020 budget cycle, money was allocated for a 15th EPF, only to be redirected to fund President Donald Trump’s planned southern border wall. The current situation, with the COVID-19 epidemic overlapping election-year politics, is even harder to predict. As of mid-August it seems possible that Austal could end the year expecting contracts for no new EPFs or for one of them — or maybe for five.

With the long-term security of so many jobs at stake, the need to resolve some of the uncertainty is pressing.

“There’s a lot of urgency,” said U.S. Rep. Bradley Byrne, R-Fairhope.

Spearhead

The EPF is often overshadowed by Austal USA’s other product, the Littoral Combat Ship. After all, the LCS is a warship that’s bigger and faster, looks like a spaceship and has generated enough controversy to fill a few books.

While sharing aluminum construction and waterjet propulsion with the LCS, the EPF is a much more low-key vessel. It’s a transport ship. Where the first couple of LCSs made headlines with powertrain failures and reliability problems, the worst ding on the EPF is probably a wave of bad press in 2016 about the need to reinforce the ships’ bows so they could withstand heavy seas.

That aside, the EPFs have a lot of charms. Their catamaran design gives them a shallow draft, which means they can get into ports that bigger ships can’t access. In addition to the huge mission bay and passenger capacity already mentioned, they have an articulated ramp that lets them put vehicles on docks without roll-on facilities. They’ve got a landing pad that can handle Blackhawk-class helicopters and even the Navy’s much heavier Sea Stallions.

The EPFs already in service are scattered around the world. They’ve participated in multinational maritime exercises, helped conduct fleet experiments with unmanned aerial vehicles and run hurricane relief missions.

The Navy didn’t ask for a 15th EPF in 2019 and Congress didn’t give it one in the National Defense Authorization Act for 2019-2020. Then Congress approved a related appropriations act that included $261 million for the ship. In itself that’s not terribly unusual. The NDAA is one pathway for legislators to set priorities. Appropriations acts are another and Alabama Sen. Richard Shelby, a prominent Austal supporter, chairs the Senate Appropriations Committee.

Then came an unexpected twist: Blocked on getting funding for the border wall, Trump tapped the Pentagon to pony up around $3.8 billion. Military leaders did so in February by slashing what they classed as “Congressional special interest items” — things Congress wanted more than the Pentagon itself did.

Democrats blamed Trump, Republicans blamed Democrats. Shelby said that “the Democrats left the President little choice in finding the funds necessary to build the wall … Ultimately, building the wall and providing for our national defense should be our highest priorities.”

Alabama’s Democratic senator, Doug Jones, an Austal supporter who’s on the Senate Armed Services Committee, said Trump was “taking money for ships, airplanes, drones, all kinds of things important to our national security.”

Nobody was happy about the wall funding grab, and that’s one reason some believe it won’t happen again.

“With regard to repurposing defense funding for the border wall, there is language in the House NDAA to limit the President’s ability to do that, but it remains to be seen whether those efforts will succeed,” said Jones of the 2020 bill.

“There’s always a danger but I don’t think it’s very high,” said Byrne, a member of the House Armed Services Committee. “There was a lot of blowback for doing that, bipartisan blowback, by the way. Because when you start taking money away from weapons programs, as opposed to building programs, that’s a different thing for all of us on the committee, Democrat and Republican. So I don’t expect that that will happen again.”

“At the end of the day we did get an appropriation for an EPF, the money was appropriated, and the Navy was in the process of awarding the contract when the White House moved that money over to the border wall,” said Byrne. “So that’s not a reflection on a lack of support for the EPF.”

This year? Byrne likes Austal’s chances.

For one thing, he succeeded in amending the House version of the 2020-2021 NDAA to include $260 million for an EPF. “I appreciate my Congressional colleagues for acknowledging Austal and the EPF’s importance to our national defense and for their support of the work performed by the 4,000 skilled men and women at Austal Mobile,” Byrne said at the time. “Construction of this world-class vessel will move us even closer to the Navy’s goal of a 355-ship fleet.”

He pulled the money from several other line items, including a $120 million allocation related to Boeing’s troubled KC-46A tanker. Mobile has some bitter history with that program, but Byrne said this wasn’t at a raid motivated by local prejudice.

“We weren’t making a dig at Boeing, Boeing has a pretty major presence in north Alabama and we try to work with Boeing a lot on stuff that matters there,” said Byrne. “When you’re looking to move something around like that, you’re looking for money that may have been allocated but for various reasons couldn’t be or can’t be spent on the timetable they had hoped … You’re looking for things as little controversial as you can make them.”

That’s why he was able to get his amendment approved on a voice vote with no dissent, he said. “We did a lot of homework on that, that was a good day when we got that done.”

The House has approved an NDAA with an Austal ship. The Senate has approved one without. “I have every reason to believe that when we get finished with the final version of the NDAA, which is going to have to go to conference, and with the appropriations bill, the EPF will be in there,” Byrne said. “I feel pretty good about it.”

That final NDAA is one “if.” The related appropriations act is another. Looking at the Congressional schedule, Byrne sees time getting tight and campaign season ramping up. “I think that we’re going to get a continuing resolution before the end of September,” he said. That could put off passage of the NDAA and/or the appropriations acts until near year’s end.

While those “ifs” generate plenty of uncertainty, they pale in comparison to a possible second coronavirus relief package, which contains as much unpredictability as a bag of cats.

“It’s going to be a tough negotiation this year though, with all the usual competing demands on the budget in addition to demands for more stimulus funding,” said Jones.

And then there were four?

A lot of ideas have been floated for what should go into a second coronavirus relief package. Shelby’s contribution is Senate Bill 4320, the Coronavirus Response Additional Supplemental Appropriations Act. It’s a $306 billion measure. Among other things it allocates $260 million for a 15th EPF and a whopping $1.45 billion for four “Expeditionary Medical Ships.”

That’s where things get a little weird. There’s no such thing as an “Expeditionary Medical Ship,” at least not yet.

Given Shelby’s established support for Austal, most observers seem to have interpreted this as meaning four mini-hospital ships based on the EPF platform. Most but not all: An aerospace and defense writer for Forbes offered an analysis that the $1.45 billion was far too much for four EPF-based ships, and must mean something else. Maybe a mix of ships, some from Austal and some not. Or maybe four ships based on the National Multi-Mission Vessel built at Philly Shipyard in Pennsylvania. “Awarding Philly Shipyard four more big, high-profile ships … would be a major boost for the Trump Presidential Campaign in a must-win battleground state,” said the Forbes article.

Shelby’s being politic. Asked if the senator means for his four “Expeditionary Medical Ships” to be made in Mobile, a spokesperson would only say that “the Chairman believes that Austal serves a vital national security role and will continue to do so in the future.”

Austal itself has a well-established position of not commenting on NDAAs and appropriations acts while they’re gestating, and generally of not intruding on the prerogative of congresspersons or Navy brass to state their positions. Craig Savage, director of communications and external affairs at Austal USA, was equally circumspect when it came to any relationship between Shelby’s “Expeditionary Medical Ships” and Austal’s EPFs: He drew the line well short of saying these are those.

What he did say was, “We’ve been working with the Navy on Expeditionary Medical Ship concepts for well over a year. And we think they provide a great solution for rapid medical response.”

That leaves open the possibility that the Navy is looking at a variety of options, and there’s good reason to believe it has been. It has two full-size hospital ships, the USNS Comfort and the USNS Mercy, but they’re well into their expected service life and too large to get into many ports. “Built in the Cold War for mass casualties in a ground campaign that never happened, Mercy and Comfort have never been used to their fullest extent even when deployed for major natural disasters like 2005\u2032s Hurricane Katrina in the U.S. Gulf Coast,” said a U.S. Naval Institute News report in May. The long-term issue of how to replace them has been under consideration for years.

And Austal has been pitching a medical variant of the EPF for years. While much smaller than the Comfort or the Mercy, it’s also much faster and has an adaptable layout. Its shallow draft and built-in ramp have already proven to be assets in relief work.

Thanks to a $49 million allocation that survived the border wall funding raid, EPF-14 will be upgraded with expanded medical capabilities. “It’s not a true hospital ship or medical ship like we’re talking about with the special coronavirus bill,” said Savage. “It just adds some medical functions to it.”

On a walking tour of EPF 12, Savage talked in general terms about some of the changes that may be seen on EPF-14. The main mission bay down below won’t be altered, but there’ll be changes to the so-called “312 Room” and other fixtures up above.

The 312 Room gets its name from its seating capacity for 312 people. With its rows of seats and video screens it has the feel of an airport terminal waiting room, except for details like the rifle racks. The biggest difference is that this isn’t a room where you wait before you get on the thing that moves. The whole room moves. The seats recline and have footrests, not to mention more elbow room than accommodations on a jetliner, and the ship has 104 bunks so that 312 passengers can sleep in shifts on a voyage.

There’s already a small medical bay with easy access to the flight deck, and the track-mounted tables in the galley can be slid together to form larger platforms for treating patients in an emergency. The upgrades coming to EPF 14 likely will expand on what’s there and exchange some of the 312 Room’s seating capacity for new medical stations. Exactly what those might be is still being worked out.

An EPF fully dedicated to medical service, including the 20,000-square-foot mission bay, would be an even bigger canvas. There easily would be space for operating rooms or for quarantine wards with segregated ventilation systems. (That’s a feature the Mercy and the Comfort don’t have, which hampered their effectiveness as auxiliary COVID treatment centers.)

“I discussed the expeditionary medical ships with Lt. Gen. Vanherck, nominated to serve as Commander of NORTHCOM, at his confirmation hearing the other day,” said Jones. “The USNS Mercy and USNS Comfort, which we saw deploy in COVID response, but which also play key roles in training exercises, combat support, and humanitarian assistance around the world, are aging and in need of modernization. It’s my understanding that the EPF can be configured for just such a mission set and I would be supportive of doing so.”

“What the Navy has discovered by taking those two big hospital ships into New York and Los Angeles with COVID is that they’re too big,” said Byrne. “It’s opened their eyes to what there needs to be in combat. They’re also, because of their size, they’re pretty deep-draft ships. And they need smaller, shallower-draft ships to be able to move in and out of various places, particularly in the western Pacific.”

“The idea about taking EPFs and turning them into true medical vessels, that’s coming directly from the Navy,” Byrne said. “I think it’s their intention to build them on these EPF platforms Austal will build. Nothing’s guaranteed. I think the likelihood, the great likelihood, is that if those ships are funded they’ll be built at Austal.”

How big an “if” is that “if they get funded?” At the moment, pretty big. Byrne said time is running out on a second COVID relief bill. The Senate won’t be back in session until Sept. 8 and the House doesn’t resume work until Sept. 14. Representatives are on 24-hour notice, Byrne said, so it’s not out of the question that they could return sooner if a deal comes together. He’s not especially optimistic about that.

“Right now I don’t see them getting anything done the rest of August and probably not ‘til after Labor Day,” Byrne said. “Right now we’re just so far apart.”

“I think there’s a political game being played here by the Democrats because they think it’s going to hurt President Trump if they don’t get a deal,” he said. “I don’t agree with them about that, but that’s what they think.”

Democratic leaders in Congress, for their part, have criticized the volume of military spending in a package they think should do more to address food aid and other support for people hurt by the epidemic and the associated economic shutdown. And some, including Senate Minority Leader Chuck Schumer, have accused Republicans of targeting aid to states where they’re defending seats in fall elections.

Negotiations continue, with reports this week that Senate Republicans were working on a streamlined package.

“We may get something in September, but if we don’t get it in September it may very well be November or December,” he said. “I can tell you, once we get past September, we won’t get anything done before the election.”

Overdue assessment

There’s yet another element of uncertainty: The Navy is months overdue to provide an update to its Force Structure Assessment. That’s a long-range roadmap for the capability it needs to build to meet the threats it expects to face. The Navy has been aiming for a 355-ship fleet for years now, but there’s widespread speculation that target will be revised upward — maybe as high as 390 manned ships plus dozens more autonomous vessels.

Byrne sees a need for a build-up.

“The Chinese are dramatically increasing their fleet. They intend to confront us everywhere they can in the west Pacific,” he said. “I don’t see the Chinese backing off during my lifetime and probably beyond that. I think it’s just a fact we’re going to have to deal with for a very long time.”

“They want to push us all the way back to Dec. 7, 1941. They want to push us all the way back to Pearl Harbor,” Byrne said. “We have to have a robust naval presence there.”

“We know where the Navy wants to go,” said Byrne. “We’ve got to make this jump to the new [Virginia] class of nuclear subs, so that’s a given. But in order to make way for that money, we’re going to have to go to smaller ships. Which is not a bad thing. The Navy has this concept called distributed lethality, where you have more smaller ships and you distribute them across whatever your zone is, which makes it harder for your adversary to know where your different assets are. That is going right into the sweet spot for a shipyard like Austal, and they’re now going to have the capability of building steel and aluminum ships, so they really are in a sweet spot. So that Defense Production act money is a huge deal for them.”

In June the Department of Defense announced a $50 million Defense Production Act to Austal, using money allocated in the first Coronavirus relief package.

Such grants are intended “to help sustain and strengthen essential domestic industrial base capabilities and defense-critical workforce in shipbuilding, aircraft manufacturing, and clothing and textiles.” In this case, it helps Austal stay viable after the frigate contract went elsewhere. Austal said it would use the money to develop a capacity to build steel vessels in Mobile, where it has specialized in aluminum, and likely would match the grant with $50 million of its own money.

Austal already has been pitching plans for manned and unmanned vessels that capitalize on its experience building LCSs and EPFs. If the Navy does float a plan that calls for more and smaller ships, just as Austal diversifies into steel construction, the shipbuilder would seem to be well-positioned to compete for new contracts.

“As I understand it, Austal is the only U.S. shipbuilder delivering ships on budget and on time today, and its ships are highly capable,” said Jones. “Austal is continually working to develop and build what the Navy needs and wants, and I believe there is absolutely a place for many more manned and unmanned Austal ships in the Navy’s fleet.”

Savage said Austal is proud of its track record on shipbuilding, and has been aggressively diversifying its range of capabilities.

“We continue to work on our autonomous development. We feel we have capable and affordable solutions there,” he said. “And we’re adding steel capability to our shipyard to give us opportunities there as well. We have growth in post-delivery, we just delivered our 23rd ship to the Navy, with 11 of those coming in just over 3 years.”

Byrne observed that while election-year politics create some uncertainty, Austal’s fortunes haven’t been tied to any particular regime. The company fared well under the Obama administration, when former Mississippi Gov. Ray Mabus served as secretary of the Navy, he said.

Byrne said a lot of credit for that goes to the workers. “None of this would be possible if they weren’t making good ships at Austal,” he said.

“I’m bullish about the yard,” said Byrne. “I think the Navy’s going to need them more and more … I think they’re going to have a good future whoever the President is in January.”

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Austal USA’s shipbuilding facility in Alabama.
AUSTAL USA

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