The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Sunday, April 9, 1995                  TAG: 9504070033
SECTION: COMMENTARY               PAGE: J4   EDITION: FINAL 
TYPE: Editorial 
                                             LENGTH: Medium:   57 lines

DOWNSIZING CREATES WINNERS AS WELL AS LOSERS: NEWPORT NEWS MAY WIN

Hampton Roads is as dependent on the military as any metropolitan area in America. So far, the waves of downsizing that have swept the Defense Department and the industries that supply it have made less impact here than in many cities. But the post-Cold War transition isn't over. Will Hampton Roads continue to be relatively unscathed?

No one can say with certainty, but a little tea-leaf reading offers some encouragement. Newport News Shipbuilding is aggressively seeking to capture all future submarine-building business. And that may not be a pipe dream.

Rep. Floyd Spence, the new chairman of the powerful House Armed Services Committee spoke Tuesday to the Heritage Foundation and outlined his agenda for defense.

Mr. Spence is a strong proponent of the military who opposes drastic cuts. But he admits the economic situation and the nature of threats we face have changed and it is now imperative ``to get the most defense out of every dollar.''

To do so, he wants to spend less on environmental cleanup, less on Clinton's ill-starred defense conversion plan, less on Pentagon bureaucracy. Mr. Spence sees the need to streamline procurement, to fund readiness and quality of life improvements for military personnel and dependents.

Finally, Mr. Spence quotes Congressional Budget Office figures that suggest modernizing the force over the next 15 years could cost $300 billion more than presently projected.

Mr. Spence says that to modernize the country will have to ``overcome politics and parochialism in Congress, among the military services and within industry.'' He admits that an adequate industrial base must be maintained to supply arms, but that we can no longer afford surplus capacity or duplication. And then comes this revealing paragraph.

``I am increasingly convinced we need to look in more detail at the question of whether the nation can afford to keep two nuclear shipyards operating in this fiscal environment. Is there truly enough current or projected work to justify maintaining this much expensive overhead? This industrial base issue, in tandem with pressures to fund several expensive Navy ships currently not funded in the budget, will result in a significant debate over the entire submarine issue.''

As the Newport News bid for the submarine business suggests, the debate has already begun. Defense experts who have read between Mr. Spence's lines have generally seen them as good news for the Newport News facility that can build both surface ships and submarines and bad news for Groton, Conn., that builds only subs.

If only one nuclear shipyard can survive, as Mr. Spence suggests may be possible, the more versatile would seem to have a huge edge. If efficiency and cost effectiveness are to be the order of the day, that's the way it should be. by CNB