US Navy alters course, to buy 3rd DDG-1000 ship

WASHINGTON (Reuters) - Bowing to congressional pressure, the U.S. Navy said it will buy a third DDG-1000 destroyer in fiscal year 2009, as initially planned, instead of canceling the $29 billion program after just two ships.

Navy spokesman Lt. Clay Doss said on Tuesday the Navy still planned to truncate the DDG-1000 program and buy eight older-model DDG-51 warships instead, but details were still being worked out with top Pentagon leaders.

But it was clear the Navy would at least proceed with its initial budget request of $2.55 billion for a third DDG-1000 destroyer, to be numbered DDG-1002, in the 2009 fiscal year that begins Oct. 1, Doss said.

The Navy’s plans are being finalized as part of a six-year spending plan beginning fiscal 2010 that must still be approved by top Pentagon leaders before it is submitted to Congress as part of the president’s budget plan in February 2009.

General Dynamics Corp GD.N, which has a large shipyard in Maine, and Northrop Grumman Corp NOC.N, with its Mississippi facility, are building the first two DDG-1000 destroyers, DDG-1000 and DDG-1001.

The two companies also build the DDG-51 warship.

“While we explored reopening the DDG-51 line in 2009, we are prepared to conform with our FY09 budget request as submitted to provide industrial base stability and continue development of advanced surface ship technologies,” Doss said.

“Our plan is still to truncate the DDG-1000 program, as we testified to Congress,” Doss said. “However ... it’s a little too early to say definitely whether we’re going to halt the 1000 line at DDG-1002.”

The Navy's move comes after considerable pressure by lawmakers, including Sen. Susan Collins, a Maine Republican, concerned about the impact on General Dynamics, and Sen. Edward Kennedy, a Massachusetts Democrat, who was worried about the effect on Massachusetts-based Raytheon Co RTN.N, which is building the combat system for the new ships.

Kennedy and a group of other lawmakers from Rhode Island and Massachusetts, had urged Defense Secretary Robert Gates to reconsider the Navy’s plans to buy only two new DDG-1000 Zumwalt destroyers, instead of the seven planned.

They threatened to block funds for all surface warships unless military officials could better justify the move to end the DDG-1000 program after years of touting its benefits.

Doss said Navy officials briefed lawmakers on Monday after the change in their plans.

Deputy Defense Secretary Gordon England also sent a letter to lawmakers saying that the Navy had been directed to continue with plans for a third DDG-1000.

He said future Navy budget plans would be determined by the Pentagon’s assessment of existing and evolving threats, including the need to defend against missile threats and operate close to shore.

Once the fiscal 2009 budget was finalized, Doss said the Navy would request a reprogramming of some funds to buy long-lead items for the eight additional DDG-51 warships.

He said the Navy had not finalized its acquisition plan for the third ship, but Collins said Navy Secretary Donald Winter had told her the ship would be built by General Dynamics.

Collins said the Navy’s plan to halt the DDG-1000 program after two ships would have been devastating to the skilled workforce at General Dynamics’ Bath Iron Works shipyard in Maine. The decision to build a third ship would ensure a more stable workload for the shipyard, and keep work moving on DDG-1000 technologies that will be used on future ships.

Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn