Issue Background


A strong shipbuilding industry is an important but often overlooked component of many sectors of our national economy and international trade.  Agriculture, manufacturing, trade, construction, and other industries in every state benefit from healthy shipyards.  The sea services of course are dependent on quality shipbuilders for their fleets and operations, making shipyards a foundation of our national security.  The Navy League supports funding and legislation, such as the Jones Act, that keeps the shipbuilding industry healthy, benefiting the entire United States.

The ability of our Navy, Marine Corps, and Coast Guard to protect our shores, interests, and values depends in large part to the quality and quantity of ships in their forces.  The quality and quantity of ships in the fleet depends on having a healthy shipbuilding industry which is regularly and adequately funded.  As the Navy plans to stave off decreasing the size of the fleet, and the Coast Guard continues a plan to recapitalize their aging cutters, it is critical to make strong investments in building the future force.  Shipbuilding is particularly sensitive to funding cuts due to several factors involving the shipyards themselves, the highly skilled labor force, and the ships that these companies build.  Overall, the shipbuilding industry is a foundational part of our military capability and economic vitality across the country.


Shipyards are limited to areas of the country near waterways.  There are 117 shipyards that are actively building ships and another 200 that maintain and repair vessels.  The vast majority of these yards produce commercial vessels- mostly barges used for river or coastal commerce.    However, because Navy ships are large and require specific and highly classified technologies, the Navy must rely on six large domestic shipyards to build its combatants and supply ships.


Even though shipyards must be located on waterways, it would be a mistake to assume that shipbuilding only generates jobs and innovation locally.  It is estimated that in 2011 shipbuilding and repair work in the United States directly employed 107,240 workers, and over 400,000 workers in every state indirectly from second and third tier suppliers.  Shipbuilding also spurs growth in other sectors of the economy.  In 2011, shipbuilding led to over 31 thousand jobs in manufacturing and 3,500 in agriculture.  Overall shipbuilding generated $23.9 billion in worker income and contributing $36 billion to our national GDP.  Every single state and locality benefits from the health of shipbuilding.


The shipbuilding industry also helps create highly skilled workers.  Naval ships are some of the most complex machines in existence and require extensive knowledge on how to properly integrate the numerous systems.  It takes time and resources to train a worker to this high skill level, making shipyard workers a necessary and worthwhile investment.  As a result shipbuilding companies invest in their labor force- the typical shipyard worker’s salary is 45 percent higher than the national average.  The construction of even a single ship requires a large number of workers.  If a program gets cut many of these workers will leave for other industries, leaving shipbuilding with a smaller labor force.  This would be a hard blow to our sea services, our work force, and our economy.


A commonly said phrase in Washington, DC is “you go to war with the force you have, not the force you want.”  Because of this, our national security is hinged on the health of the shipbuilding industry.  In naval terms, a fleet may go into operations with ships that were designed and built decades ago.  The average Coast Guard cutter is over 40 years old.  It takes years to design a ship with all its components and weapon systems, and several more years to build it.  Any new ship class or changes in design will take years before it will become operational.  Once these ships are in service they will remain in commission for several decades.  This results in two things.  First, because naval ships and Coast Guard cutters have such a long expected service life, regular maintenance is critical in keeping them effective.  Ships need drydocks for repairs and maintenance to hulls which is often executed by shipyard.  A limited number of drydocks restricts the amount of maintenance work that can be done at any given time.  Second, even relatively small cuts to shipbuilding and maintenance programs will negatively impact the fleet for decades.  For example, a ten percent cut to a two ship program means that only one ship will be built since it is impossible to divide a ship into smaller units.  The cut would also mean that if funding for the cut ship is restored in future years, it will still be delayed keeping the overall fleet size below requirements.  However, even if the funding is restored, shipyards may not have been able to sustain their workforces and facilities with such a decrease in work, leaving the shipyards without the capacity produce the needed number of ships.


The health of our sea services directly depends on the health of the shipyards that produce the fleet.  Any cuts or delays to shipbuilding funding will have disproportionate and lasting effects on the number of ships in the fleet and on the number of skilled workers that the shipbuilding industry can sustain.  The sea services in the future rely on the shipyards of today.