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Under construction: smarter shipbuilding could help ease Navy's budget troubles.



MARINETTE, Wis. -- When the Navy's first littoral combat ship was in its final construction phase at this shipyard near Lake Michigan, about a quarter of the hull protruded from the end of the 300-foot long indoor facility that shields workers from subzero temperatures.

The 374-foot USS Freedom, which was delivered to the Navy last fall, was Marinette Marine Corp.'s largest and most complex ship construction project. In anticipation of building more of the Navy's newest class of warships, officials here are planning to give the 67-year-old yard a significant makeover so that it can churn out the littoral combat ship faster and cheaper in the future.

With 55 ships expected in the class, the LCS is central to the Navy's long-term plan to expand its fleet to at least 313 ships by 2020. Navy officials wanted to build these vessels--modeled on two designs--in smaller commercial yards to take advantage of lower costs and shorter construction periods. But both lead ships have experienced significant cost overruns and schedule delays.

With tightening budgets and angry lawmakers chasing down wasteful defense programs, there is increasing pressure on the Navy--and the shipyards--to control costs. Builders of the LCS are modernizing their yards with automated machinery, computer-based tools and expanded construction areas to drive down those costs and increase production.

"Over the last decade or so, a lot of mid-tier companies have started to put significant investments into their facilities, both to increase capacity and improve efficiency," says Joe Carnevale, senior defense advisor at the Shipbuilders Council of America, a trade association that represents the industry.

Founded in 1942 along the Menominee River, which forms the border between Wisconsin and Michigan, Marinette Marine has evolved from building wooden barges to constructing the steel-hulled version of LCS. The company is part of the LCS team led by the Lockheed Martin Corp. Through the years, the shipyard has grown to encompass 300,000 square feet of indoor production areas on 60 acres about a quarter mile upriver from Green Bay. But the yard's layout is outdated, officials say, and they aspire to transform it into a modern, efficient facility with state-of-the-art equipment.

Unlike larger government-owned shipyards, mid-tier yards that employ 600 to 1,200 workers such as Marinette Marine must rely on state grants and other types of public and private funding for improvements.

While the American Recovery and Reinvestment Act includes $100 million to help recapitalize small shipyards, only 25 percent of the funds would be available to the mid-tier yards through competitive bids.

Earlier this year, Marinette Marine became a subsidiary of Fincantieri S.p.A., an Italian shipbuilding company based in Trieste. Known for its work in the European commercial and military markets, the parent firm is investing $60 million in the Wisconsin yard for upgrades.

The yard recently launched a five-year capital investment plan, says Duane Roehm, vice president of program management at Marinette Marine.


European shipyards have added a great deal more automation than U.S. yards, and they have a higher throughput with a smaller workforce, Richard McCreary, president of Marinette Marine, points out. His hope is that Fincantieri will bring similar advancements to Marinette. "These are all improvements that they have made in years past in their own shipyards," he says.

Unlike the automobile industry, whose manufacturing plants rely heavily on robotic systems and moving assembly lines, building a ship requires a labor-intensive, hands-on approach. It commences with steel plates that are cut into panels, which are erected into three-dimensional blocks, called modules. The modules are outfitted with ship components such as piping, ductwork, electrical wiring and light fixtures. Cranes then hoist the modules into larger blocks, where the ship pieces are connected, and the sections finally are welded together to form the vessel.

Automobile assembly lines typically are housed in mile-long facilities through which the vehicles proceed along one continuous conveyer. But at this shipyard, materials pass through multiple buildings and shops before amassing at a final construction area.

Marinette plans to rebuild the yard so that workers can construct and transfer the heavy modules in a more efficient manner and so that a full-size LCS will fit inside the erection building.

"We anticipate that we would double our steel output using our existing employee base with more automation," McCreary says.

Currently, the yard can build about one-and-a-half LCSs annually, says Marinette's littoral combat ship program manager, James LaCosse. The shipyard improvements are key to meeting the Navy's goal to construct six LCSs per year.

"I could very well see having four or five LCS under construction at any one time," says McCreary.

On a balmy late winter's day at the yard, melting snowfall has left behind pools of mud near the blast-and-prime building through which steel plates are fed in preparation for the construction process. After being heated, blasted and primed, the plates are loaded onto a flatbed truck that carries them to the plate shop.

This facility will be relocated so that the blasted and primed plates would roll directly into the plate shop and eschew the additional handling and transportation process, says Mike Metzger, director of production. Eventually, the entire yard will be paved with asphalt, he points out during a walking tour.

The primed plate is picked up by crane and set on an automated laser plate cutter that receives instructions directly from a computer-aided drafting and design tool. Once the parts are cut, the material moves out and swings to the other side of the building, where workers weld the plate to form panels that will comprise the three-dimensional modules.

All the welding is done by hand. The shipyard plans to automate the panel line by adding robotic welders. A cut, grind and mark station, a stiffener fit station and a stiffener weld station will prevent workers from having to kneel and crawl. A larger panel fabrication shop would enable raw materials to flow faster through the yard, Metzger says.

Completed panels proceed to the next building, where they are assembled into modules. To lift the panels into place, workers operate three 10-ton overhead cranes. Metzger says that the company plans to double the crane capacity with three 20-ton cranes.

Current material handling systems in the yard move modules weighing as much as 60 to 70 tons. The goal is to one day build modules in excess of 100 tons. "We think that's where we can add value and level-load our facility," says Roehm.

Metzger points to two upside-down modules that eventually will connect to form part of the USS Fort Worth, the third LCS that is scheduled for delivery by December 2012.

Workers weld pipes and ventilation parts and set the electrical layout and foundations on the modules before they are sent off for blasting and painting.

The cornerstone of the shipyard upgrade is a new paint facility, which would combine the existing painting and blasting buildings into a single, larger structure.

In addition, three buildings will receive 100-foot extensions, in part to make room for an electric shop, a machine shop and new equipment. Trucks currently pull into the buildings to load up completed panels. To free up that interior workspace, external cranes for lifting and handling those parts outside the buildings also are planned. The resulting space will permit workers to build more modules simultaneously, says Metzger.

One of the long-term objectives is to install a radio-frequency identification system to help track all the parts as they are moved and stored throughout the shipyard.

As the materials flow through the process, they progress towards the waterfront and building 10, the large erection facility at the heart of the shipyard. That building will be expanded in time for LCS-3 to be built completely indoors in one of two side-by-side bays, McCreary says.

In the north bay, employees assemble the final production run of the Improved Navy Lighterage System--barge-like vessels that can transport vehicles, cargo and troops from warships to the shore.

At its peak, the program employed 400 workers in the shipyard in a wide range of trades, from electricians and pipe fitters to insulators and steel experts.

The other bay currently is used to construct aluminum modules. The government frowns on housing steel and aluminum facilities in the same building due to cross-contamination risks and other issues, so Marinette plans to build a separate building dedicated solely to aluminum construction.

Fincantieri will improve the yard's ship-moving system so that outside contractors would not have to be hired to transport vessels throughout the facilities as they do now. More cranes will be available for the short shore-side journey that completed ships take to the river for launching.

For years, Marinette has side-launched ships into the Menominee with a dramatic splash. But the yard intends to construct a floating dry dock for future launches.

When LCS-1 splashed into the river at its launching ceremony in 2006, officials say only 65 percent of the ship was complete.

"It was an empty shell," describes LaCosse. "That's not our strategy."

The yard strives to have ships 95 percent or more complete in the erection facility before they are launched, he says. Once in the water, the only remaining work ought to be the testing and trials that must be done afloat, such as the shaft alignment.

Under schedule pressures, the LCS-1 was rushed to the water.

"We did an incredible amount of work after the boat was put in the water, which will not happen on the next boat," vows Roehm.

In the shipbuilding business, timing is everything, says McCreary. For example, if workers finish all the welding in a module before it goes for blast and paint, then they avoid doing additional hot work later and having to chip, grind and repaint the module, he says.

The adherence to this philosophy is apparent throughout the yard, where ship modules are being outfitted with lights, insulation and other components long before the block resembles a recognizable part of a ship.

"We'd like to think what makes us tick is the modular construction and the outfitting of modules," says Roehm. "We didn't get a real good opportunity to do that on LCS-1, and we're really excited about building the next one and showing what that will look like."

Shipbuilders talk about the importance of sequencing work on a project. When one of the processes happens too early or too late, it can throw the entire production line off.

On LCS, work was disrupted because the ship's design was altered during the construction process. Naval vessel rules--industry standards that govern the engineering, safety and environmental impact of ship systems--were released after initial work had begun on the shallow draft ship. That required the shipyard to undo and redo some of its work multiple times.

"There were whole piping systems in the 6-inch and 8-inch size range--fairly large piping systems--that were put in, cut out, put in, cut out, at least twice, because of design change, because of equipment changes all driven by the late invocation of the naval vessel rules," says McCreary. "That amount of rework and that kind of rework, it multiples your hours hugely," he says.

Shipyards measure costs in man-hours--the number of hours that workers labor on a project.

Simple tasks such as painting a watertight door before it is hung on the ship, can make a huge difference in costs. To hire a painter to coat the door after it is installed on a vessel is more expensive than to paint it before the door ever leaves the ground.

"By doing that in that sequence with a great deal of fidelity, you drive man hours out of the program," says McCreary.

Because of the program's competitive nature, the number of man-hours on LCS-1 is being kept secret. In other programs, it has not been unusual for the yard to drive 20 percent of the man-hours out of a program by the third or fourth ship in a class, he says. He expects similar results in the LCS program.

The most important thing is for LCS to get on the learning curve, says Carnevale. In shipyard speak, that equates to the experience in building a ship. "It's that knowledge of what it takes to build the ship in one's own facility that will allow the yards to make the best investments to reduce the costs," he says. Bringing more automation into the yard and improving its efficiency is part of that, he adds.

It will take longer for the LCS program to get on the learning curve because the production line was disrupted when the Navy in 2007 canceled the two second-of-class ships.

"These next set of ships aren't going to come down the learning curve much," says Carnevale. "You've got to get to two or more in each shipyard and start producing them by rote," in order to start seeing cost reductions. "You have to have better knowledge than you have right now," he says.

Carnevale predicts that there should be some dramatic cost reductions by the 12th to 15th LCS.

For the DDG-51 class destroyers, Bath Iron Works, a subsidiary of General Dynamics Corp., was able to reduce man-hours to 3 million from 5 million in a period of six or seven years, says Carnevale. The learning curve for LCS could be similar as long as the design is not changed much.

"The great strength of U.S. shipbuilders is that once you have a stable design in production, they can really drive the costs down. They're very, very good at this," says Robert Work, vice president of strategic studies and a naval analyst at the Center for Strategic and Budgetary Assessments.

Congressional leaders, on the other hand, aren't so confident. They have assailed the program for its cost overruns and delays. Rep. Gene Taylor, D-Miss., chairman of the House Armed Services Committee's seapower and expeditionary forces subcommittee has lashed out at the Navy and shipbuilding industry repeatedly. He cites the Navy's original estimate of a $220 million LCS hull versus the recent $550 million price tag estimate in his arguments.

"The current situation of these vessels costing in excess of a half billion dollars cannot continue. There are too many other needs and too little resources to pour money into the program that was designed to be affordable," he tells Navy officials at a recent hearing. "Right now, you don't want to be the program that is breaking the bank." Some lawmakers have threatened to cancel the program altogether if the Navy does not get its act together.

But shipbuilding proponents urge Congress not to be so hasty.

"I believe that when LCS gets on a learning curve and the costs start to drop dramatically, it will be tough to shut that ship off," says Carnevale. "Congress will want to buy it, especially if it's being built in more than one location in the country."

The Navy in late March awarded the Lockheed Martin team a second LCS, which is under construction at Marinette. If a third ship is awarded in the next budget, it will be built by Bollinger Shipyards Inc. at a yard in Amelia, La., which is also part of the Lockheed Martin team.

Marinette and Bollinger traditionally have been fierce competitors outside the LCS program. Having grown up on two opposite coasts--the Gulf Coast and the "fresh" coast, respectively--Bollinger and Marinette have developed unique capabilities, LaCosse says.

"The collaboration between the two yards is offering another opportunity to the Navy to reduce costs," he says.

When design changes on the LCS-1 caused a disruption to the production process in Marinette, Bollinger stepped in by building one of the modules to help keep the ship on schedule. Marinette originally was supposed to construct the entire ship by itself.

"If the Navy would like between four and six LCS per year, this team's ready to do that," says LaCosse.

Bollinger, too, has been upgrading its yards over the years.

"We have spent the last eight years posturing our company to produce the fast response cutter, littoral combat ship and joint high speed vessel," writes Donald "Boysie" Bollinger, president and chief executive officer of Bollinger Shipyards, in response to questions from National Defense. "We don't expect that we will only build one LCS, so we will invest to make the shipyard more capable," he says.

Planned improvements to the facility at Bollinger Marine Fabricators LLC include covering the erection area, enhancing existing buildings and panel lines for LCS construction, new paint sheds, launching dry-dock certification and hard surfacing the shipyard to reduce dust.

"We will not begin these improvements until LCS is awarded to our yard. We don't need these improvements for our current commercial workload," he writes.

Bollinger hopes that the shipyard's first LCS contract will be awarded next year, with production beginning in 2011. "It will be a very important part of our backlog for many years to come," he says.

The amount of the firm fixed-price contract for LCS-3 was not disclosed because of the competitive nature of the program, says Lt. Clay Doss, a Navy spokesperson.

"The Navy has been holding the line on costs," says Work. "It's just unprecedented for a second ship to be firm fixed-price. So the mere fact that Lockheed Martin accepted the firm fixed-price contract indicates their great confidence that they're going to be able to make money on this ship on a firm fixed-price."

A team led by General Dynamics Corp. is completing the USS Independence, LCS-2. The aluminum trimaran hull design is due to be delivered to the Navy later this year. The cost on that ship has been kept secret, too.

Both teams will compete for the next three LCS contracts to be awarded next year. The Navy is asking that proposals include cost estimates for the fully-loaded ship as well as the price for just the hull, which would give the service the option to procure the systems separately if it chose to go that route. Two of the three ships likely will be awarded to one of the teams, analysts predict.

"If we had multiple ships per year, we could really demonstrate for the Navy what a mid-tier yard can do to drive costs out of the program," LaCosse says.

Shipbuilding experts say that constructing one ship at a time makes it difficult for teams to secure better pricing for materials.

Costs for steel and other materials have gone up significantly, McCreary says. "With multiple hulls and multi-year buys, you can then do a significant amount of driving material pricing down," he says.

McCreary also is pursuing a partnership with the Office of Naval Research. Projects under consideration for LCS include a new stembar design and a new casting design for the water jet tunnels. Both have potential to drive man-hours out of the program, he says.

Depending on how many LCSs are awarded in the next budget cycles, the Marinette shipyard would dedicate the majority of its workforce to the program and essentially become an LCS yard, officials say. Though the company had to lay off workers after it delivered the USS Freedom, it has maintained a workforce of 600 employees that will ramp up rapidly for LCS-3, McCreary says. Crews will work round-the-clock shifts to build the next ship.

Looking ahead, McCreary says the yard will prepare for the forthcoming improvements. Major construction efforts are expected to begin next year.

Analysts say that the shipyards' modernization efforts will place them in good stead for the LCS program.

"Between the three builders that are in the game right now--Austal, Marinette and Bollinger--there's plenty of capacity to build as many as the Navy would want to build," says Carnevale.

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Title Annotation:Shipbuilding
Comment:Under construction: smarter shipbuilding could help ease Navy's budget troubles.(Shipbuilding)
Author:Jean, Grace V.
Publication:National Defense
Article Type:Cover story
Date:May 1, 2009
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