Members of Congress press Navy to end opposition to diesel-sub exports

THE BALTIMORE SUN

WASHINGTON -- Members of Congress are engaged in an election-year effort to "save American jobs" by trying to reverse the Navy's long-standing opposition to diesel submarine exports -- even though U.S. shipbuilders seem reluctant to dive into the market and haven't built a conventionally powered sub for more than 30 years.

The idea of expanding the customer base for U.S.-made submarines won a qualified endorsement early last month from the House, which passed a fiscal 1993 defense authorization bill with language ordering a reappraisal of Navy policy. The Navy has opposed sales of diesel subs, arguing that modern U.S. technology and construction techniques would end up in foreign hands.

Other moves are being contemplated on Capitol Hill, including the drafting of a Senate appropriations bill in September -- only weeks before the 1992 election -- with a provision that would strip the Navy ofmuch of its veto power in the export licensing process.

But in coming months, the battle over submarine exports is more likely to help legislators curry favor from shipbuilding interests, shipyard workers and labor unions than to drum up new business for the struggling industry. A senior shipbuilding executive, who declined to be identified, said the legislative maneuvering would only raise false hopes for thousands of workers who may eventually find themselves out of work.

U.S. entry into the export market is "not very realistic because there are a lot of suppliers of diesel subs in the world, and the market's not that good," the executive said. "None of us has a product to sell, but in an election year, it's easy for a congressman to say, 'By God, we have to sell because the Germans, British and French are doing it.'

"It's all smoke. It's good political rhetoric," he said. "You stir up interesting political chatter when you have folks around the neighborhood all revved up about exports, but by the time they figure it all out, the election's over."

The U.S. intelligence community has concluded that international sales of diesel submarines are nearing a saturation point. Many prospective buyers are finding they no longer can afford the $300 million-plus price tag for a small boat that has more prestige value than actual application in projecting a credible defense of local coastlines, one analyst said.

"Foreign submarine builders are not exactly dancing in the streets for the amount of business they're getting," the analyst said.

Navy officials have already dug in their heels on the issue, with the Secretary of the Navy's office warning last week in a special report to Congress that the United States would risk losing its "margin of technological superiority" in underseas warfare by selling diesel subs to foreign navies, no matter what the economic benefits to U.S. workers and their employers. A copy of the report, which has not been publicly released, was obtained by The Sun.

While recognizing the need to keep domestic production lines busy, the report said that "to the extent that a potential diesel submarine construction project would draw on U.S. resources, it has the potential to tap into the state-of-the-art technology used in U.S. nuclear-powered submarines."

Advocates of submarine exports, such as John J. Stocker, president of the Shipbuilders Council of America, have heard the Navy's objections before and regard its warnings of technology losses as grossly exaggerated. The shipbuilding industry, which totally dependent on one customer -- the Navy -- finds itself in "a truly awful situation" because it has few remedies to offset declining Navy business, he said.

On Capitol Hill, several legislators have been trying to chip away TC at the wall of Navy opposition for months, each of them for strong political and economic reasons. They include:

* Rep. Owen B. Pickett, a member of the House Armed Services Committee whose district in Norfolk and Virginia Beach is suffering from a shrinking Navy budget. The region's largest defense contractor is one of the nation's two submarine manufacturers, Tenneco's Newport News Shipbuilding & Dry Dock Co.

The House committee adopted the Virginia Democrat's language ordering the Navy to examine the feasibility of submarine exports, declaring in a report accompanying the 1993 defense authorization bill that foreign sales "may provide a means to maintain critical shipbuilding capabilities."

With no new submarine orders from the Navy expected before 1998, there will be "a further contraction of the American shipbuilding industry unless new sources of orders become available," the committee said.

* Rep. Sam Gejdenson, a Democrat whose southeastern Connecticut district is home to the nation's other submarine builder, General Dynamics' Electric Boat division.

As early as April 1990, Mr. Gejdenson sponsored a bill that would have allowed shipyards and suppliers to build vessels and components for U.S. allies -- mainly, he explained at the time, "to maintain our manufacturing base."

Last November, during a fruitless attempt to keep alive the entire $36 billion Seawolf submarine program, Mr. Gejdenson urged then-Navy Secretary H. Lawrence Garrett III to allow Electric Boat to export diesel subs, suggesting the company was considering an export deal with Taiwan, aides said. But a spokesman for Electric Boat said recently that the company had never entertained a potential export deal with any foreign buyer.

* Sen. Christopher J. Dodd, a Democrat who preceded Mr. Gejdenson in the House and who has been a passionate supporter of Electric Boat.

At a Senate Budget Committee hearing in February, Mr. Dodd urged Defense Secretary Dick Cheney to consider allowing diesel submarine exports to "bridge" an anticipated production gap at Electric Boat until 1998 or later in the decade. "It's becoming a rather competitive marketplace out there," Mr. Dodd said.

* Sen. Trent Lott and Sen. Thad Cochran, the Mississippi Republicans who are members of the Senate Armed Services Committee and Senate Defense Appropriations Subcommittee, respectively.

Both men have been working to clear the way for an export bid by Litton Corp.'s Ingalls Shipbuilding division in Pascagoula, Miss., a campaign that has been joined by Egyptian Defense Minister Mohammed Hussein Tantawy, who met with Pentagon officials last fall.

Ingalls, which builds cruisers and other surface ships for the Navy, has been waiting about a year for U.S. export licenses to assemble and outfit two German Type 209 diesel subs for Egypt.

Mr. Lott failed to sway Adm. Frank B. Kelso II, chief of naval operations, in a meeting last August, but he added language to a 1992 defense bill requiring the Navy to devise criteria for evaluating export license applications for diesel submarines sales.

The Navy continues to oppose the deal.

* Alaska Sen. Ted Stevens, ranking Republican on the Senate Defense Appropriations Subcommittee, who is widely regarded as one of the defense industry's biggest boosters.

After meeting Ingalls officials, Mr. Stevens added a provision to a 1992 appropriations bill that bars the Navy and Defense Department from blocking the construction of diesel subs by private U.S. shipyards for sale to U.S. allies or military aid recipients.

Although the provision expires in October, "the intent was to send the Navy a message," a Senate aide said.

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