THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, October 25, 1995 TAG: 9510250439
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY JACK DORSEY AND CHRISTOPHER DINSMORE, STAFF WRITERS
DATELINE: VIRGINIA BEACH LENGTH: Medium: 91 lines
Citing cash flow problems, Adm. Jeremy Mike Boorda told defense contractors Tuesday not to count on federal dollars to help them research and develop new products.
``We are in a different ball game now,'' the chief of naval operations told more than 1,500 members of the American Society of Naval Engineers and other defense contractors meeting for a two-day symposium.
``We are in a ball game where industry has to do what made this country strong: have good ideas, figure out how to produce them at an affordable price and sell them to the customer,'' Boorda said.
``Today, we are the customer, not the supplier.''
Gone are the days of the mid-1980s ``when we had a bunch of money'' and gave it to the industry ``whether or not anything got produced,'' he said.
``We can't afford to do that any more. That is a relationship that just won't wash.''
Vice Admiral George Sterner, head of Naval Sea Systems Command, which oversees fleet maintenance, issued a similar warning to the region's shipyards and other vessel repairers in a speech later Tuesday at the symposium.
Under budgetary pressure, the Navy is striving to reduce its spending on ship maintenance, Sterner said. ``Preventive maintenance is driven by the calendar when it should be driven by the condition of the system,'' he said.
Boorda and Sterner were speaking at the ``Fleet Maintenance in the Joint Environment'' symposium at the Pavilion Convention Center in Virginia Beach. The conference, Tuesday and today, is being sponsored by the Tidewater Section of the naval engineers' society. Several dozen technical papers were presented and there were about 150 exhibits.
In a talk with same basic message last week, Boorda left an audience of mine warfare advocates in stunned silence.
That group, meeting at the Dahlgren Naval Surface Warfare Center near Fredericksburg, asked Boorda if he was committed to them as they worked mine warfare issues.
``I said, `No, I don't think so because what you mean is, am I going to put money in there for research and development.' . . . I said I am not committed to that at all.''
Capitalism is the answer to today's relationship between the supplier and the customer, he said.
``If you have a good idea, develop it, sell it, make the customer want it and you will make money.''
The Navy's fleet commanders, together with their submarine, surface ship and air arms, must spend less money to meet the Navy's need to reinvest in new ships and planes in the future, he said.
Calling his three biggest problems ``money, money, money,'' Boorda noted that the Navy took $1.2 billion out of its maintenance budget three years ago to balance the overall budget. In addition, while its ships and planes are relatively new today, they won't be in 15 years when the Navy will face new capital outlays.
Meanwhile, the Navy does not yet have an approved budget for the current fiscal year, waiting for Congress and President Clinton to reach a compromise acceptable to both sides.
The good news, Boorda said, is that the Navy is at its best ever now in readiness and equipment. It is planning to construct its final Nimitz-class carrier at Newport News Shipbuilding to complete a 10-ship class and will also build its newest submarine, SSN-23 there.
Its Arleigh Burke-class of destroyers is the right fit for the Navy, and its F/A-18 ``E'' and ``F'' models are what's needed for the future.
But it is the future that needs attention and money, Boorda said.
``We got all new stuff that starts to wear out about the same time,'' he said.
The good side of that is that the Navy will be a long-time customer to industry. Most agree that the Navy has gotten about as small as it needs to be, he said.
``Operations are about level now. We are not leaving Norfolk, or anywhere that we are now. We are a reliable customer. The amount of work we are going to do is known. The places we are going to do it are known.'' ILLUSTRATION: Color photo
Adm. Jeremy Boorda
by CNB