As a cost-saving move, a planned $200 million destroyer modernization program might sail away from Pearl Harbor Naval Shipyard, and some union officials fear that could be repeated with other cruisers and destroyers based in Hawaii.
The Navy is looking at shifting the "midlife upgrade" on the destroyer USS Russell, planned for 2013 at Pearl Harbor, to the West Coast to save $35 million.
The work would have maxed out the surface ship work force here, requiring workers to be flown in from the mainland to help, officials said.
Robert Lillis, president of the International Association of Machinists Local 1998, which represents mechanics in Hawaii’s private ship repair industry, is raising alarm over the prospect of such a large project moving to the mainland.
He said he believes the decision already has been made to have the work on the Russell done on the West Coast.
"So we’re losing all that work," he said. "And that work can be done here."
Officials at Pacific Fleet headquarters at Pearl Harbor did not provide answers to most of the questions asked by the Star-Advertiser about the cruiser and destroyer modernizations.
"We’re still waiting for final word on a decision," the command said in an email.
But the picture could be clearer next week.
U.S. Rep. Colleen Hanabusa, a member of the House Armed Services Committee, said the Navy can’t issue a final decision on the Russell until the release of President Barack Obama’s budget on Feb. 13.
"However, in our current economic environment, I recognize the Navy must make efforts to keep its projects cost-effective," Hanabusa said.
About 90 percent of the shipyard’s efforts are directed at submarine work, and private contractor BAE Systems Hawaii Shipyards performs surface ship jobs using an on-island work force of about 650.
During peak work times, the Navy projected it needs to bring in an additional 600 workers from the mainland to handle all the regularly scheduled surface ship work and conduct the cruiser and destroyer modernizations.
"My understanding is that the workload presented by the modernization of the Russell may exceed what BAE Systems’ on-island work force can provide, requiring that they outsource a significant number of additional jobs to mainland personnel," Hanabusa said. Moving the Russell to the West Coast would open its Pearl Harbor dry dock to other vessels, she said, "potentially giving our local work force the job opportunities they need, while saving the Navy millions of dollars by not outsourcing jobs."
Hanabusa said the Pacific "is the theater of the future" and that sending complex and demanding jobs to the Pearl Harbor shipyard — and maintaining that capability — "is an investment in our naval presence."
Lillis said he believes more island residents can be trained to do some of the cruiser and destroyer upgrade work.
"It’s not just about the Russell," he said, adding that he is concerned that other vessels might be sent off for work elsewhere. "It’s the difference between being a full overhaul shipyard and being a Jiffy Lube."
In late 2010 the shipyard announced it was embarking on a decade-long, $1.86 billion warship modernization program to extend the lives of the three cruisers and six destroyers at Pearl Harbor.
The work was to be part of a more than 20-year Navy-wide program to modernize its 22 Ticonderoga-class cruisers and 62 Arleigh-Burke destroyers at a cost of $16.6 billion, representing the most comprehensive effort of its kind in Navy history.
The shipyard started a $220 million modernization on the cruiser USS Chosin in January 2011, and work is ongoing, the Navy said. The Russell was to be the next to go in for upgrades.
The Navy previously said the destroyers, in addition to hull, mechanical and electrical improvements, would be upgraded with a combat information center redesign, capability to use SM-6 missiles against anti-ship cruise missiles, and a new anti-submarine warfare combat system.
The Chosin was expected to have its improvements split into two yard visits, with combat system modernization in 2014.
But the cruiser and destroyer modernization program as a whole might be reworked because of higher-than-expected costs at a time of sweeping defense budget cuts.
In a Nov. 16 letter to U.S. Sen. Daniel Akaka raising concern about the proposed Russell work shift, Lillis questioned the Navy’s math.
"The U.S. Navy’s estimated cost saving of $35 million seems unreasonably high," Lillis said. "Hawaii may be a higher cost area, but it is not $35 million higher."
The Navy estimates that it could save that much by doing the Russell work on the West Coast, likely San Diego, which would cut back on airfare, hotels, per diem and other costs associated with sending mainland workers to Hawaii.
David Carey, president and chief executive officer of Outrigger Enterprises Group and chairman of the Chamber of Commerce of Hawaii’s Military Affairs Council, said in his tourism role he can vouch for the impact of the off-island shipyard work force on Oahu’s economy.
"But wearing my chamber hat, I’m going to try and play it neutral and say the military has got to do it in the most cost-effective way they can, particularly in the current budget environment," he said.
When the Russell goes to San Diego, the San Diego-based destroyer USS Halsey would be shifted to Hawaii in what’s referred to as a "hull swap," and the Russell’s crew would operate the Halsey out of Pearl Harbor, according to Lillis.
Iain Wood, president of the Ship Repair Association of Hawaii and chief operations officer with Pacific Shipyards International, which does contract work for the Navy, sees less dire consequences should the Russell modernization be done elsewhere.
"If the Navy is swapping (the Halsey for the Russell), then, to the industry … there’s another ship here going through the normal maintenance cycle," he said.
That steady work flow "is, I guess, more what we’re looking for as an industry," Wood said. "A massive spike (in work) and a massive (destroyer and cruiser program) doesn’t help the industry, to be honest with you. It’s better to have a steady work flow than a big spike."
A "bigger concern," he said, is a possible drop in the number of ships home-ported at Pearl Harbor — currently 11.
The Pentagon recently announced it would retire seven "lower-priority cruisers that have not been upgraded with ballistic missile defense capability." More information is expected when the president’s 2013 budget is released.
Wood said two of three cruisers based in Hawaii are budgeted for decommissioning. Which two he isn’t sure.
Officials HAVE said a new cruiser could be moved to Pearl Harbor, and the new destroyer USS Michael Murphy is expected to make Hawaii its new home port in 2013. (Murphy was a Pearl Harbor SEAL who was killed in Afghanistan in 2005 and received the Medal of Honor.)
Wood also is concerned Pearl Harbor’s two frigates could be decommissioned.
"So the general concern is, just how many ships will be stationed out here in the long term?" he said.
In a statement Saturday, U.S. Sen. Daniel Inouye said transferring the USS Russell to the mainland will allow for more efficient use of the Pearl Harbor shipyard — "whose core competency is submarine repair and maintenance" — while producing significant cost savings for the Navy.
"This decision also reinforces the need to diversify the skill set of shipyard employees while bolstering Pearl Harbor’s reputation as a shipyard where all the work gets done, regardless of vessel," said Inouye, chairman of the powerful Appropriations Committee.
U.S. Rep. Mazie Hirono said she’ll be disappointed if the Pearl Harbor shipyard doesn’t get to handle the midlife modernization of the Russell.
Still, she said, "We all recognize the cost constraints faced by the Navy, and my understanding is this hull swap won’t result in a loss of jobs" for island workers, she said.
Pearl Harbor shipyard, the state’s largest industrial employer, has a combined civilian and military work force of more than 4,900 and an annual economic impact of $907 million.
