acibc

With all the services reining in spending to cope with the current budget crisis, the second and third-order effects of cutbacks will ripple through the force for years. While the Army “has it worst” by the Pentagon comptroller’s own assessment, the most complicated impacts are on the Navy, whose carefully planned maintenance schedule is falling apart. The fleet has already had to halve its aircraft carrier presence in the Persian Gulf, but delayed and cancelled overhauls will ultimately mean fewer ships in service in the years to come.

Ships require a lot of maintenance to work to stay ready for action, and none more than nuclear aircraft carriers. In addition to the regular pierside pitstops every type of vessel has to make, Nimitz-class carriers need their reactors refueled and thoroughly overhauled halfway through their 50-year service life. This massive “Refueling and Complex Overhaul” (RCOH) can only be performed at one shipyard in the nation, Huntington Ingalls Newport News yard in Virginia, so the next carrier has to come in as soon as the previous one is done. But last month the Navy delayed the USS Abraham Lincoln‘s overhaul indefinitely for lack of funds. That will in turn delay the next carrier on the schedule, the George Washington, and so on down the line. Keep reading →

George Hill is president of Advex Corporation, a company based in Hampton, Virginia and a member of the Aircraft Carrier Industrial Base Coalition (ACIBC).

Unless Congress acts to change the existing law, sequestration will automatically cut $1.2 trillion from the President’s budget over the next decade-including $492 billion from military spending. These cuts threaten one of the most critical elements of our economic recovery: private sectors investment in upgrading and purchasing new technologies and equipment. These investments are the engines of a strong recovery, the hiring of workers, and a continued commitment to a skilled workforce. Keep reading →

Reaping the Benefits of a Global Defense Industry

Steve Grundman

After three years of the “age of austerity” in Western military spending, investors’ imperatives and corporate strategies show one indication of how the defense-industrial base will evolve over the next decade. Investors want public companies that demonstrate an attractive risk-adjusted total return, not just M&A-fueled arbitrage plays. In response, companies are husbanding or harvesting their financial… Keep reading →