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“Can We Modernize U. S. Shipbuilding?”
(See pages 22-35, January 1966 Proceedings)
Vice Admiral John T. Hayward, U. S. Navy (President, Naval War College)— Eureka! At long last we may make sense out of our shipbuilding programs. Lieutenant Commander DiBona has written an excellent article. There have been many of us through the years who firmly believed the shipbuilding system had to be modernized and tried to “storm the walls” to change the obsolete concepts held by the people who ran the programs. Perhaps we will get some truly modern systems engineering in our new ships, which we badly lack now.
It has been my experience that to make a system successful, a minimum of 20 per cent of the engineering effort should go into systems engineering. The complexity of our modern ships certainly calls for this approach if we are to have a successful class of ships. The FDL program is a good one to start this concept. This is another example where outside influences have forced the Navy to examine critically some of its methods in constructing hardware. It is all for the best, and in the years to come may be looked on as a turning point in the construction of modern ships for the Navy.
I am impelled to make the foregoing comments because of “what I saw go wrong” under the present system while Assistant Chief of Naval Operations (Research and Development), from 1957 to 1959, and Deputy Chief of Naval Operations (Development), from 1959 to 1962.
Rear Admiral E. H. Batcheller, U. S. Navy (Commander, Charleston Naval Shipyard)—Lieutenant Commander DiBona develops the thesis that by standardizing ship designs, by building ships in blocks of large numbers, by turning over their design to competing private firms, and by using a single contractor for each block, the Navy would get more for its money and the shipbuilding industry of the United States would be revitalized and modernized. He arrives at these conclusions by citing that the U. S. aircraft industry is competitive in the world markets while the U. S. shipbuilding industry is not, and that foreign yards have increased their productivity by modernizing their facilities. Changes in U. S. ship procurement practices, he speculates, would remedy this situation and probably also lead to other benefits such as improved personnel utilization, improved morale, lower conversion costs, and better ship availability.
I find his exposition less than completely convincing. Perhaps I have been too long and too closely associated with the shipbuilding business. On the other hand, on the basis of his biographical sketch, Lieutenant Commander DiBona is unhampered by any firsthand experience in the field.
The insistent affirmativeness of tone in his article makes it a “hard sell” rather than an objective study. I think his case would have been better served, and he does have a case, had he not attempted to make the total package procurement concept a panacea to end all ills of the Navy and shipbuilding industry.
Although he is profuse in his use of numerical values, his documentation is sometimes weak and his sources frequently unclear. Nowhere did I find any serious attempt to balance pros and cons, and frequently I found myself arriving at different conclusions from the same supporting material. If he foresees any difficulties in instituting his proposal, he chooses not to discuss them.
The third paragraph of his article opens with “Naval shipbuilding today is not contributing its part to the ability of the Navy to compete and serve.” What is included in the term “naval shipbuilding” is not defined. It implies that all concerned with the design and construction of naval ships have in some manner failed to meet their responsibilities. “Naval shipbuilding” may have its faults, but I cannot agree with such an all-inclusive condemnation. Government and private ship designers and shipbuilders have provided this country with what is incontestably the most- powerful Navy the world has ever seen. As an instrument of national policy it is unexcelled in its power and flexibility, and the precision with which its power can be applied. Without intending to disparage in any way the accomplishments of our friends and allies, type for type, our ships compare more than favorably with those of any nation. We are now building guided missile destroyers for Australia and West Germany; we have assisted the design and supervised the construction of ships for other Western nations; and we have converted and loaned or sold our ships to most of our postwar allies. We are furnishing nuclear power plants and Polaris missiles to the British and surface-to-air missile systems to the French and Italians. Just where has “naval shipbuilding” failed to “compete and serve”?
Lieutenant Commander DiBona then comments on the post-World War II status of
The carbon-copy concept of shipbuilding advanced in the Proceedings by Lieutenant Commander DiBona is attacked in commentary on this and the following pages. Among Lieutenant Commander DiBona’s proposals was one to award contracts for all ships of one design to one shipyard in contrast to the system which built the ten Farragut-class guided missile frigates— two of which are shown at left—in five shipyards.
U. S. shipbuilders vis-a-vis U. S. aircraft industries. Noting that thousands of ships were produced using mass production techniques during the war, he states that now “U. S. shipbuilders are almost limited to producing naval ships or commercial ships for which the government subsidizes half the cost.” He goes on to note: “In the U. S. aircraft industry, on the other hand, wartime planning and production lessons were retained and improved upon. As a result, this country is the leading supplier of the world’s commercial aircraft, and it does not need direct subsidies to compete successfully with aircraft industries of other nations that pay much lower wages.”
The author does not examine any possible differences in circumstance or condition that faced the two industries. Can he really believe that management of the shipbuilding industry was congenitally stupid and that of the aircraft industry consistently brilliant? I doubt it, but from this point of departure he extrapolates to develop a rationale that the future welfare of the Navy lies in changing the methods of designing, contracting for, constructing, and operating naval ships to conform to aircraft industry techniques and foreign shipbuilding practices.
The most basic of his omissions is his failure to relate the state of the two industries to the markets they serve. Looking just to the commercial segment of the industries, only a few points are needed to demonstrate this relationship is of substantial significance.
The commercial aircraft industry was in its infancy when World War II broke out. The war speeded the development of transport aircraft, and during the war millions of Americans learned to accept flying as a means of travel. When the war ended there was no surplus of transport aircraft. Instead, there was a substantial demand, and because of the great distances between points in the United States, a major part of that demand was for domestic or protected internal airline service. In contrast, before World War II the American shipping and shipbuilding industries were on the ropes. The Merchant Marine Act of 1936 had stopped this downward slide, a modest start had been made toward modernizing the American Merchant Marine with ships representing the most advanced state of the art, and a part of the private shipbuilding industry was given a new lease on life. At the war’s end, as Lieutenant Commander DiBona mentions, there was a large surplus of ships. American ship operators had fast modern ships to meet most of their requirements. An offsetting factor was that those areas where they had enjoyed freedom from foreign competition began to contract. The use of pipelines for moving petroleum products and natural gas, the vast growth of the trucking industry, and the changing pattern of travel from surface to air virtually wiped out the protected coastal segment of American shipping.
In short, the American aircraft industry since World War II has enjoyed a great demand for its product and an expanding market. The American shipbuilding industry has faced a very meager demand for its product and a steadily shrinking market.
Excluding Soviet Russia, there were only two nations at the end of World War II with the know-how and industrial capacity to meet the surging demands for commercial aircraft —Great Britain and the United States. The United States, because of its wartime production build-up and freedom from war damage, had a substantial lead. With its large internal market and a benevolent government’s interest in aiding the airlines, aircraft manufacturers were soon having difficulty filling orders. They almost got trapped by their preoccupation with success. Great Britain gambled daringly on leading commercial aviation into the jet age. Had the jet-propelled airliner Britain developed and actually had in operation not proved to have disastrous structural deficiencies, that nation might well have taken the lead. Alerted in time, American aircraft industry quickly adapted basic military jet designs for commercial use and once again pre-empted the market.
ENTER THE FORUM
Regular and Associate Members are invited to write brief comments on material published in the Proceedings and also to write brief discussions on any topic of naval or maritime interest for possible publication on these pages. A primary purpose of the Proceedings is to provide a place where ideas of importance to the Navy can be exchanged.
The circumstances facing the shipbuilding industry were quite different. The United States, as noted above, had a huge surplus of ships, while most of the world’s maritime powers had lost major segments of their merchant fleets. U. S. shipping interests were given preferential treatment in the disposition of this surplus. Foreign countries were severely restricted by the Merchant Ship Sales Act of 1946 as to the types of ships they could buy from us and by the terms under which they could buy them. It is hardly surprising that they turned to their own shipbuilding industries to meet the greater part of their replacement needs. In those countries where war damage was extensive the opportunity to modernize and improve shipyard facilities was not neglected.
With knowledge of the foregoing, I cannot accept as a reason for changing the Navy’s ship design and procurement methods the fact that the American aircraft industry is enjoying a better competitive position in the world’s commercial market than is the shipbuilding industry. Yet this is the conclusion Lieutenant Commander DiBona draws and the base from which he proceeds to describe four ways of obtaining much more for the money spent on shipbuilding.
The first is to standardize and buy in quantity. There can be no argument that building standardized ships in large numbers at one shipyard can result in a substantial reduction m the cost of the individual units. If a large number of ships is required in a hurry or for a situation in which today’s break-neck advance of technology can be ignored, it is by far the preferred solution. But can we seriously consider going this route for the acquisition of a larger part of our naval ships?
Speaking at the National War College in March of 1948, Vice Admiral Earle W. Mills, L- S. Navy, then Chief of the Bureau of Ships, stated:
Our wartime fleet, ship for ship and type for Tpe, I am convinced, was the finest in the world. n this the records of the war will bear me out.
Lhat this should be so is no mere fortunate quirk of circumstance. The Navy’s pre-war
.ding program was formulated not on the Policy of building ships in quantity, but rather on Premise that we must develop ships of the highest attainable military efficiency. Under the limitations imposed by international agreement on naval tonnage and on the size of individual ships, every effort was made to reduce hull, machinery, and equipment weights in order that the maximum offensive power, defensive strength and seakeeping qualities might be built into the prescribed displacement of each vessel. Innovations in methods of hull construction and in machinery design were tried whenever they gave promise of assisting towards this end. Looking back, some of these changes appear rather trifling but at the time they were made they represented radical departures from accepted shipbuilding practice. In some cases, we went too far but the number of ships in each class was kept small and the mistakes made in one group were corrected in the succeeding groups.
Suppose the Navy had standardized the FBM submarine at the start of our Polaris missile program. It is a program of “convenient” size with 41 ships, all designed for the same mission. We might today have all the ships in commission and at a much reduced cost. We would also have a much lesser capability. Some of our guided missile frigates completed within the last five years are now slated for major conversion. It is not the ships’ hulls and machinery that create the major problem; it is their sophisticated electronic and weapon systems needed to meet the increasingly severe demands of naval warfare. Even during World War II we were unable to standardize warship design.
It is perhaps noteworthy that after World War II it was generally the standardized, simplified ships that were laid up or inactivated first, the Liberties, the Victories, and the destroyer escorts. The first shipyards to be closed down were the highly specialized ones which had built them.
Lieutenant Commander DiBona next states that another method of obtaining much more for the money spent on shipbuilding “would be the ensuring in the design process, that each specification is justified on the basis of its cost as well as the extra effectiveness provided.” This is done and has been done for many years. The Bureau of Ships has pioneered the Value Engineering Program and by incentive clauses has enlisted the aid of its contractors toward the same goal.
The specifications for the construction of warships are not arrived at capriciously or lightly. Most of them have their origin in
Aboard the USS Monitor: I tUi‘2
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combat or operational experience. They have been learned the hard way and should be relaxed only for reasons of well-established validity; remember the Thresher disaster!
The third method the author proposes for getting much more for the money spent on shipbuilding is to “carry out studies of the relationship between initial ship construction cost and lifetime operating cost very early in the design process. . . . the firms competing for the contract would submit the best designs that their staffs can devise to provide the greatest effectiveness for the cost, and would include specific guarantees of initial price performance and operating costs.’’ [Emphasis mine]
I do not believe that any enforceable guarantee of operating cost for the lifetime of a ship is possible. During the life of a combatant ship—arbitrarily given as 20 years, but often considerably longer—there is a progression of new officers, new enlisted men, overhauls, modernizations, changes in the tempo of operations, etc. The shipbuilder will have no control over these factors. The question will arise: was this costly job the result of maloperation by the ship’s company, of some failure on the part of the shipbuilder, or of the interaction of some new requirement imposed by the Navy? The Navy’s legal offices can look forward to a future of unprecedented activity if such a scheme is attempted.
The fourth method the author proposed for obtaining more for the money is to modernize production facilities. He states, “a new flowline shipyard employing automated machinery similar to that used in the latest yards abroad should be built in the United States.” He then goes on to estimate that such a yard would cost between 70 and 80 million dollars and that this cost would be recovered many times over by the savings generated by block procurement of standardized ship types.
There can be no doubt that shipbuilding costs would be reduced through the modernization of shipyard production facilities. Whether savings would be as great as estimated is less certain. I doubt that the building of new flow-line shipyards would follow automatically from the block procurement of standardized ships as Lieutenant Commander DiBona seems to believe. I suspect it will have to be written into the contracts as a requirement. If it is to be for more than a one-shot operation, some government regulation will probably be necessary to ensure the installation has adaptability for the construction of more than one type of ship.
In the remainder of his paper the author asks a series of questions and then answers them using statistics and tables to prove his points. In the following few paragraphs, I will indicate some, not all, of the areas in which I find myself in disagreement.
On page 32, he offers a comparison of design practices in the shipbuilding and the aircraft industries, citing design competition as a factor which “forces the competitors to design aircraft which will give effective performance yet can be built at the lowest cost.” Although he does not say so and in the following paragraphs speaks to the design practices of U. S. private shipowners, I assume his intent is to compare the design of naval aircraft with naval ships. By inference then, naval ships are less effective in performance and are more costly because of a lack of design competition.
I know of only one naval ship that might be said to have fallen short of expected performance. This was the Gearing-class destroyer Timmerman (DD-828), which was used as a platform for evaluating a heterogeneous conglomeration of highly advanced machinery components under service conditions. The lessons learned from the Timmerman were invaluable, but because by the nature of her machinery, her maintenance cost was excessive and as the ship was of an obsolescent type, she was inactivated after she had been milked for all possible information.
On the other hand, I suspect that the Navy’s design procedures for aircraft are not the complete answer for low cost and assured effective performance. Eliminating from consideration a number of research aircraft, I recall the following something-less-than-com- pletely-successful designs: the R3Y Trade Wind, a multi-engine flying boat transport and the similar P5Y patrol plane; the F2Y Sea Dart, a hydrofoil sea-based fighter; the P6M Seamaster jet-powered seaplane; and the F-lll (TFX) variable-sweep fighter, the carrier-based version of which has run into so many difficulties as to indicate possible cancellation, according to press reports.
The foregoing examples seem to disprove the infallibility of the approach or procedures employed in military aircraft design. The states of the art in the two industries are advancing along different lines: in the case of aircraft it is largely in the vehicle itself; in the case of naval ships it is more in the military payload they carry. There is absolutely no evidence to support the contention that present naval aircraft design procedures result in a product of greater cost-effectiveness than the present method of developing naval ship designs.
Lieutenant Commander DiBona also poses the question, “What can be learned from foreign shipbuilders?” The data he presents here has been drawn entirely from commercial shipbuilding areas. He challenges the position that high U. S. wage rates alone make us non-competitive. He then asserts that Sweden is competitive with Japan which enjoys wage rates that are 44 per cent of Sweden’s rates. He furnished no specifics other than the hourly earning of shipbuilding workers of selected countries and does not identify the source of any of this information.
He attributes Sweden’s success to high productivity in her modern, well-planned, and well-equipped yards. In what ship types, over what period, and for what customers did he find Sweden competitive with Japan? When I was naval supervisor of shipbuilding at the Bethlehem Steel Company’s Fore River Yard in Quincy, Massachusetts, from 1959 to 1961, the company was building oil tankers for Greek interests, but not because the firm’s costs were competitive.
The source of the cost breakdown for a 12 million dollar cargo ship the author furnishes is not identified. However, he uses it to prove that the U. S.-foreign cost differential cannot be explained by differences in labor cost or the other elements of ship cost. He finds inescapable the conclusion that a substantial part of the differential must be attributed to the inefficiency of our shipbuilding plant and to over-design.
This conclusion is aided by brushing aside any possible differences in the price of steel, by dismissing overhead costs as small, and by using one estimate of the Maritime Administration for the percentage relationship of foreign to U. S. material costs (this estimate is not identified back to the material figures of the tabled breakdown, although he uses it as though it were).
The author apparently is not aware of the effect of various regulatory bodies on the cost of U. S. merchant ships nor that every ship built with a construction subsidy must incorporate features determined by the Navy to be necessary for national defense. Included in this category among others may be such characteristics as additional speed, additional power generating capacity, additional evaporating capacity, and structural provision for gun installations.
The standards required in U. S. merchant ships for safety of life at sea such as compart- mentation, fire-proofing, fire-fighting, life saving equipment, and even rat-proofing, are the highest in the world. They must be met or a ship will not be licensed for operation. Perhaps this is “over-design,” but it would be difficult to convince the survivors of the cruise ship Yarmouth Castle, which burned between Nassau and Miami, Florida, this past November that some of these safety standards are not important.
Also not discussed are the standard of accommodations demanded by U. S. maritime unions. Unless there has been a recent change, these standards are the highest in the world. This too may be “over-design,” but we are stuck with it.
Nowhere in the author’s dissertation on what we might learn from foreign shipbuilders did I find any reference to foreign naval shipbuilding.
Finally, the “total package” procurement concept the author refers to is still to be proved; this is reason for some misgivings.
It is always much easier to tear down than it is to build. I take no pleasure in my role. Lieutenant Commander DiBona is to be admired for his courage in undertaking an article on such a complex and difficult subject. Those ills that do exist in the American shipping and shipbuilding industries have defied satisfactory solution for almost a century, despite the efforts of many able men and a concerned government. One could wish that the author had researched in greater depth and that his treatment of his subject had been more rigorous and scholarly. I find I cannot follow the route he has taken to the conclusions he has reached.
Edwin M. Hood (President, Shipbuilders Council of America)—Lieutenant Commander DiBona’s article presents a number of ideas for reducing shipbuilding costs in the United States which warrant consideration not only from the standpoint of naval ship construction programs, but for merchant fleet replacement programs as well.
On most points, we can agree.
The big issue in shipbuilding today is not whether a hidden treasure of cost reduction potential is there, but how best to dig it out. Being very close to the day-to-day problems of the shipbuilding industry and most active in the cause of improving its environment and oudook has convinced us that reducing the cost of ships is neither so simple as some believe nor so hopeless as others imply.
Lieutenant Commander DiBona’s article leaves an inference that we need only to build new shipyards and allot large block orders to these new facilities to reduce building costs by as much as one-half. We feel the proper approach to improvement is more complicated and that the savings potential, while significant, is not that large. Others suggest abandoning U. S. shipyards and replacing the U. S. merchant fleet with foreign-built ships. To us, and apparendy to many others, such a radical plan is neither desirable nor necessary. To an extent, the alternative of new facilities or foreign building points to the shipyard as the problem area. This is not so.
Basically, shipyards are no different from any other U. S. industry. They are capitalized to the level of opportunity foreseen available to them. They produce in the manner their customers’ purchasing practices dictate. They are economically disadvantaged in world markets, as they pay the level of wages our standard of living requires. They overcome this disadvantage when the combination of massive national consumption, superior technology and/or market protection, in some form, are granted to them.
To improve the output—in this case with lower shipbuilding costs—the input must be changed. Increased opportunities for U. S. shipyards would automatically result in significant capital expenditures in plant and equipment as these would then be justified. Moreover, if shipbuilding customers approached procurement from the standpoint of minimizing cost, substantial gains could be made, as Lieutenant Commander DiBona points out, through cost justification of specifications, taking advantage of learning curve gains via block building, simplifying design, and other means.
In the opinion of many authorities, the economic disadvantage of our superior wage rates compared with world rates will remain unchanged in the foreseeable future. It is thus a matter to be recognized for what it is. Ships are not a mass-produced item in the United States and for numerous reasons probably never will be. Therefore, it is unrealistic to expect of the shipyards that they can achieve wage and cost indemnification from foreign competition that some mass-production industries enjoy. Technologically, shipyards are also in an unfavorable position, since the ship research and development and procurement systems provide almost no role for the shipyard. The aircraft manufacturers, by contrast, have large staffs of scientists and engineers advancing technology because they are reimbursed to do so, mostly by the federal government. With their own funds, and on their own initative, U. S. shipyards have conducted much research and development, but this effort is far overshadowed by that which has taken place in the aircraft industry under governmental auspices.
The path to lower shipbuilding costs lies in recognizing precisely all of the factors which combine to form a ship cost, identifying the opportunities to improve on these, and taking appropriate actions. What is needed is a thorough, step-by-step analysis and an attention to detail, plus an approach which has generally been missing in “broad brush” solutions advanced for the shipbuilding industry. Our shipyards merely need the conditions to evolve from where they are, not a discard- and-start-over approach. And, these needed conditions reflect a long list of factors which one by one may not be material but which in the aggregate have a surprisingly significant potential to reduce costs.
Lieutenant Commander DiBona has recognized the broader problem as being that of the system and not of shipyard ineffectuality.
As an extension of his theme, the foregoing remarks are intended to shift the tone of the discussion of modernizing U. S. shipbuilding toward an attention to detail, and from this toward an evolutionary rather than revolutionary approach. In addition to this matter of perspective, there are several specific points in the article on which additional comment seems warranted.
We heartily endorse the concept of evaluating ship costs over life cycle and recognizing the interrelationship of building/operating cost trade-offs. In fact, we believe this logic should be expanded to include all facets of ship replacement economics. We have found that in a number of instances “not replacing” is the expensive alternative. Unfortunately, the replacement cost is incurred over a short time period while the inadequacies or high charges of an economically outdated ship are rationed out a bit each year. Only through life cycle analysis do these comparisons become apparent.
Another of his excellent recommendations is to initiate a program whereby each ship specification would require cost justification
based on the risk or compromise associated with a less costly alternative specification. From our research, we are confident that this approach would not only yield important cost reductions, but would reveal that one important part of the so-called U. S. versus foreign shipbuilding cost disparity is instead a specifications differential.
The author’s calculations pertaining to the FDL program appear to project cost reduction potential substantially beyond that which is attainable. The 41st ship constructed in a new yard is projected to cost 45 per cent of the first ship price, and savings are estimated accordingly. While no doubt a well-conceived procurement of such vessels could result in significant savings, we would follow several changes in the proffered concepts to evaluate this savings potential.
First, computed savings should not be based on the first ship cost. Cargo ship procurements for the merchant fleet have averaged between three and four ships. Further, the ships of an order, while of distinctive design in some respects, ordinarily bear a relationship to prior ships of the same class. This observation has a relevancy to naval vessel purchases as well. Therefore, the merit of building 40 ships of a single design all in one yard should be related to the base cost of constructing at least four ships. Estimated savings would then be nearly one-half of those indicated.
Second, the author’s calculations of cost savings are based on learning curve data of direct labor hours per ship. These curves were applied to the full cost of the vessel including shipyard overhead, steel, ship components, profits, taxes, etc. While a large scale and repetitive shipbuilding effort would undoubtedly result in economies, the amount of benefit would vary among elements of the total ship price and would be expected to be higher for direct labor than almost any other major category. Steel, for example, would not cost one-half less with such a program. The result of applying the labor learning curve data to the entire ship would be, therefore, an overstatement of savings potential. Only by assessing each major element of ship cost individually can reliable estimates be made.
Third, the estimates assume a more favorable slope for the learning curve should ships be constructed in a new shipyard. A more likely result may be a lowering of the entire curve than a change in slope. The rationale of capital expenditures for automation is to reduce the labor hours per unit of output. Similarly, a single ship procurement includes the cost of engineering design, templates, and so on, which would be totally absent, or at least significantly reduced, in constructing subsequent vessels of the same design.
Such factors should be “backed out” of the first ship cost prior to applying learning curve and economy of scale data.
Finally, the text implies that completely new shipyards are a key item. The FDL approach is described as reducing program costs for 20 to 40 ships by an amount equal to the cost of five to eight new yards. However, the author’s Table III shows a 134 million dollar savings for a 40-ship program, and 57 million dollars with a 20-ship program attributable to the new yard learning curve slope of .86 versus .9 for an existing shipyard. This amount is equivalent to the cost of from less than one to less than two new shipyards. Further, the cost calculations apparently do not include the effect on operating costs of a 70 to 80 million dollar capital investment with a new yard. These would be substantial and would necessarily be recovered in the ship cost, thus reducing the savings potential. When the three previous paragraphs are considered, the merit of constructing a network of totally new yards becomes unclear.
The purpose in making these observations is not to demonstrate that new shipyards are an unwise investment, for that may not be true, but rather to emphasize that only through thorough, detailed analysis can the most advantageous actions be identified.
Several comparisons of the shipyard industry to the aircraft industry are included in the article. The position of the U. S. aircraft industry in world markets has litde similarity to the world shipbuilding pattern. The world market factors of each are vastly different. So, too, are the circumstances in which they operate. And so, too, are the levels of opportunity available to each.
No observer of maritime affairs would deny that the condition and size of our merchant and naval fleets leave much to be desired. These fleets were mainly delivered in block and now are growing old in block. An obstacle to overcoming this situation is the cost of massive ship replacement under present conditions. Lieutenant Commander DiBona is to be congratulated for his contribution in suggesting some measures which might be taken to change these conditions so that U. S. shipbuilding costs could be decreased and thereby encouraging the purchase of more sea power from U. S. shipyards.
"Half a Career”
(See pages 70-75, February 1966 Proceedings)
Lieutenant Commander F. C. Collins, Jr., U. S. Navy—Lieutenant Commander Swarz- trauber’s interesting and well-written article discusses a subject most writers have heretofore scrupulously avoided. His figures are seductively convincing, leading the reader to accept their conclusions without inquiring into the authenticity of the postulates from whence they derive. His salient points that the eligibility for retirement at 20 years “demotivates a man” from working for “half pay” for a longer period of time, that a man is most productive physically and mentally during his 40s, and that the Navy can ill- afford to lose this well trained man’s talents after a 20-year career, all enjoy a superficial validity which the casual reader can immediately accept. However, I would submit that the 20-year career, for most people in the Navy, does not represent half a career, but is in every respect a full career.
Consider the higher level of responsibility which the Navy confers upon its officers and petty officers. Whether it be a quartermaster first class skippering a harbor tug or a lieutenant commanding an LST or fleet tug, we find executive responsibility of a scope and weight not found in comparable civilian income brackets, and not in many civilian fields. Lives and equipment of inestimable value are assigned as a matter of course to all who aspire to, and show themselves equal to, the task of command. The constant acceptance of total responsibility for a command is a psychological burden which is not laid aside at 1700; rather, it is continuous in its demand for attention. As one who has already enjoyed the pleasures of two commands, I could not say more without acceding the fact that nothing gives a line officer more pleasure than command. But the fact remains that command is a heavy and incomparable burden. Thus, 20 years in the Navy can add up to more than an “apprenticeship to life,” as the author writes.
The physical exaction in the Navy is much greater than in a comparable civilian job. At sea, the normal working day for junior officers or petty officers amounts to about 16 hours. This includes two four-hour watches in addition to a normal eight-hour work day. For the commanding officer this lengthens into a 20- to 24-hour day, depending on operations. We do not spend all our time at sea and I would be naive indeed to try to picture all our officers and petty officers put in that amount of time each day at sea. However, reports from my Washington friends indicate that the working day in that area averages a good 10 to 12 hours, and with six to seven working days a week for many of the officers in the Navy-Defense complex.
While seemingly the long hours and psychologically taxing days might not appear to be deleterious to a person’s well being, I think the number of top officers affected with heart attacks or hypertension either on active duty or shortly after retirement is significant. I personally would question the credibility of the statement that the military man is at his physical peak during his 40s.
I would suggest that our advancement pattern is too rapid to accommodate what Lieutenant Commander Swarztrauber proposes, i.e., that men be encouraged to remain on active duty for 30 or 40 years as a matter of course. A career officer reaches the rank of commander in his 16th year of commissioned service and, hopefully, captain in his 22nd year. What does he, or the chief who makes E-7 in his tenth year, have to look forward to for the next 18 to 20 years? The author accurately points out that we have created the E-8 and E-9 inducement for a longer career, but in the final analysis, aside from the extra pay, a chief is still a chief. Perhaps a system of slower promotions was implicit in the longer tenures, but I think that this change might have a formidable historical precedence to overcome which might do a great deal of “demotivating” for the first 20 or 30 years.
Finally, it appears that these longer periods in grade would tend to “demotivate” our contemporary officer and petty officer to an unacceptable degree. I wonder how much motivation officers in today’s Navy would be offered by the thought of remaining in the grade of captain for 18 years or waiting as a commander for 12 to 14 years intent on getting his 40 years in to retire. Granted that in the Navy of Porter, Farragut, and John Rodgers II, 20 years to lieutenant was not uncommon, but that was 100 years ago and the accent now is on youth.
Twenty years is a full Navy career for many of our officers and petty officers. The Navy would gain little by having their service continued for 10 or 20 more years. To others, a 30- or 40-year career is what they had in mind when they come aboard; very infrequently do they consider the matter of working for “half pay” after 20 years active service.
I would heartily endorse the proposal of Lieutenant Commander Swarztrauber concerning 90 per cent base pay for those putting in 30 years or 100 per cent for those rugged men staying in 40 years or more. However, I do not believe that we will be doing this great Navy of ours any favor by attempting to force extension—by reduced 20 year retirement pay—of the many who feel that 20 years is a full Navy career.
Commander John L. Wash, U. S. Navy— Lieutenant Commander Swarztrauber’s suggestion to inject more career incentive into the pay-retirement procedure is extremely thought-provoking. I hope that the next pay study group will take it under consideration. The Navy career has, too long, been considered but a preface to a long semi-retirement period awarded for a job well done.
The sharp reduction in a serviceman’s net worth when he reaches retirement is a matter of concern which is only realized at a time too late for correction. In particular, the sudden and unmistakable loss of allowances, even for those not receiving hazardous duty pay, gives the serviceman’s retirement bank account a rude shock. For the career officer who, following the Officer Fact Book schedule of selection, finds himself a rear admiral in his 29th year of service, the rental and subsistence allowances constitute about 15 per cent of his total pay and allowances. If he should retire at the end of his 30th year of service his retirement pay is a somewhat startling 62 per cent of his active duty total.
On the other hand, a newly commissioned ensign now exists on a pay schedule only marginally higher than that granted to recipients of the recently established Poverty Program. As an unmarried leader of enlisted men, he earns just over two dollars an hour after taking into account holidays, Sundays, Saturdays (half), and the authorized but unusual 30 days of leave a year. This figure also presumes the fantasy of an eight-hour day for our underpaid and overworked hero.
A possible solution to these problems is a change in the several non-taxed allowances— the Basic Allowance for Quarters and the Basic Allowance for Subsistence. I have never believed that these were even nominally related to the cost of housing and food. If this had been the intent, they would have reflected the very real differences in these costs which exist between the many different duty stations and across the long time periods between their changes. If we gave a more honest name to this quantity of money—say “fringe allowance”—we would be calling the payment by a more realistic name and, at the same time, endowing it with an anonymity which would allow it to be pegged at a figure related to nothing but the level of gratitude of “a grateful nation.” By establishing the ensign’s “fringe allowance” at 100 per cent of his pay and reducing the allowance while increasing his base pay every two years, at the 30-year mark the admiral’s pay would be made up of 100 per cent base pay with no allowance.
The ensign would now have an enviable pay (tax) advantage over his civilian contemporaries and the admiral would be subjected to a smaller reduction in pay (100 to 90 per cent under Lieutenant Commander Swarztrauber’s plan) upon retirement and the Internal Revenue Service, by judicious curving of the “fringe allowance” curve, could realize the same number of dollars as are received under the present system.
Since the effects of this plan would be immediately apparent to the newly commissioned officer during his first service year, it might even serve to show him that there are real benefits to be had in a service career as well as the many which can only be realized after a number of years of service.