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A Business Strategy for Shipbuilders

Professor Wayne Hughes, Department of Operations Research, Naval Postgraduate School, 28 July 2014

Abstract.  We don’t need to predict the future to know the actions the U. S. Navy needs to take now. The past and present provide enough clues.

The top priority for U. S. shipbuilders is to anticipate the Navy’s most important need, design small, affordable vessels for littoral operations, and be ready when the Navy accepts the existing strategy, operations, technology, and affordability evidence that compel a new fleet composition. There are two reasons: (a) Such ships are simpler to design on contractor dollars, and (b) There are plenty of examples to draw on, from Chinese Type 022 Houbeis and Type 056 Jiangdongs, to many MCM vessel designs, to Swedish Visbys, to Israel Sa’ar ships of many generations, to a plethora of vessels of all sizes around the world.

Full-length version available as HughesMaritimeBusinessStrategy2014July28.pdf

Observation:  Yogi Berra said "In theory, theory and practice are the same.  In practice, they're not."  Network Optional Warfare (NOW) is best suited to mobile groups of small stealthy vessels and aircraft.  If we are going to achieve a force mix that can take advantage of asymmetric operational concepts favoring the United States, some variations in our long-standing business strategies are necessary.

Related links:

  • Hughes, Wayne P., "A Business Strategy for Shipbuilders," Sea Power magazine, vol. 57 no. 9, pp. 6-7, November 2014.
  • Stew Magnuson, "Navy Ship Numbers for Asia-Pacific Shift Don’t Add Up," National Defense magazine, April 2014.  Excerpts:
    • Retired Navy Capt. Wayne Hughes, professor of practice at the Naval Postgraduate School in Monterey, Calif., said, “If the surface Navy is going to be a player, it has to be in a position to sail there in crisis situations.”

    • China is building and modernizing its navy and bullying its neighbors, some of which are U.S. allies, he said. There’s no talk of bombing mainland China or a ground invasion, so that leaves the U.S. Navy to act as a deterrent, he said. “We don’t want to fight China. We want to influence China and persuade them to back off. And influence our allies by saying, ‘We are sturdy soldiers, and we don’t want to abandon you,’” Hughes said.

    • If China is going to deny access to the South China Sea, then the United States can demonstrate to the nation that it can deny access to the same waters. “And submarines are an impressive way to do that,” Hughes said.

    • Aircraft carriers are too valuable to lose, he said. “We can’t send a carrier in and have it put out of action, or a $2 billion destroyer,” he said.

    • The Chinese navy in March blocked two Philippine ships from delivering supplies to a disputed island in the Spratley chain, which sparked a diplomatic rebuke from the United States. The Philippines by treaty is an ally of the United States.

    • Hughes said if friends and allies such as the Philippines, Japan and Australia want the United States to be in the Pacific, one way to boost ship numbers is to lean on them to supply more vessels. This was once called the “1,000-ship Navy” concept, although that term has not been heard in a while, he added.

    • “We can tell China, ‘If you interdict our friend’s shipping in the South China Sea, then we will interdict your shipping.’ That is a calibrated capability,” Hughes said. It would be difficult for China to react far from its shores in the areas such as the Singapore Strait or Sunda Strait in Indonesia, he said. Almost all the ships in the U.S. inventory can be used for interdiction missions, including the new littoral combat ship, he said.

  • Stew Magnuson, "When It Comes to the Navy’s Destroyers, It’s a Numbers Game," National Defense magazine, April 2013.  Excerpts:
    • Retired Navy Capt. Wayne Hughes, professor of practice at the Naval Postgraduate School in Monterey, Calif., said numbers matter.  “Not mathematically, but logically. If one ship is sunk, it loses its offensive capability, its defense capability, and is no longer there to serve as a target, which is part of its role,” he said. 
    • The shift to Asia-Pacific is appropriate, he said. “But we aren’t actually moving very quick in that direction. We need a maritime strategy.” If the Navy doesn’t have the necessary number of ships to cover the region, then they simply don’t. There isn’t anything it can do to make up for the shortfall. “That means we are going to really struggle to have an appropriate presence in places around the world,” he said.
    • Hughes advocated simpler, less expensive destroyers. Modern destroyers have moved beyond their first roles in World War II when they were primarily escorts for aircraft carriers, convoys in the Atlantic and amphibious assault missions. They evolved at the tail end of the war into small, lethal night combatants during the Solomon Island campaign. Over the years, they have taken on more roles, he noted. The Navy now uses them for anti-air warfare employing the Aegis system, open ocean anti-submarine warfare, and, lately, ballistic missile defense.

    • Although there hasn’t been a sea battle since World War II, Hughes doesn’t rule one out. “We have gotten in the habit of not being attacked,” he said. The rise of China and Iran makes this a possibility, which is why he believes the destroyers should be simplified, and their numbers boosted, he said. “If my ship is three times more potent and three times as sturdy, [and] if you have three times as many of the cheaper ships, you have parity with me. If the two fleets fight, it will be a draw,” he said.

    • “The more single purpose destroyers the better … if you lose one capability, you don’t lose it for all missions,” he added.  Meanwhile, destroyers are being used for anti-piracy missions, he said. “We should be using Coast Guard ships. But the Coast Guard is too busy doing what it is supposed to be doing.”

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