Navy to spend $37B on 'marginally useful' ship
Despite the price, critics say it lacks firepower, survivability and usability.
Let's set the stage. You and your significant other decide to devote a weekend to repainting the family room. It's not an easy task, because the room is large with high ceilings, expensive flooring and a lot of heavy furniture. Not only are you going to paint it, but it's going to have one of those "faux" effects that take twice as long and more money in supplies.
You spend all the money, you invest all the time, and in the end, it looks nothing more than OK.
On a much larger scale, that's exactly what the Navy did with its Littoral Combat Ships, if a recent report from Bloomberg is correct. It seems like a great idea. Make a ship that's able to take on missions near the shore while also being able to operate in open waters.
Equipment could be swapped out, and, thanks to technology, it's manned by a relatively small crew of 40. Even better, the Navy doesn't have to wait years for a new ship. They're designed to be built rapidly.
The problem, according to the report, is that the ships are too thinly manned, there isn't enough firepower, and they are likely too wide to fit into their intended ports. And to paraphrase, the fact that there are two versions of the vessel makes for one big logistical and maintenance nightmare.
Adding to the problems, the Pentagon acknowledges that the vessels are being built with the lowest level of survivability to cut costs. Michael Gilmore, the Pentagon's chief weapons tester, said the vessel "is not expected to be survivable in that it is not expected to maintain mission capability after taking a significant hit in a hostile combat environment."
All this led to Rep. James Moran, D-Va., to refer to the ships as "marginally useful." The report, written in 2012, highlights what the Navy has heard for quite a while, but it isn’t admitting defeat.
Bloomberg reports that Navy Secretary Ray Mabus said the ship started out as a "mess" but has become "one of our best-performing programs."
The Navy has contracts for 20 of the vessels at a cost of $440 million each. Lockheed Martin (LMT) will produce one of the variants, while an Australian company, Austal, will produce the other design. General Electric's (GE) marine unit will supply the engines.
More from Benzinga
- A Closer Look at Disney Earnings
- Trading Apple? You Need to Watch These Two Events This Week
- Performance of the Dow Theory May Prove the Rally Has Legs
Disclosure: At the time of this writing, Tim Parker had no position in any of the securities mentioned and would probably prefer to go to battle on a tuna boat rather than on one of these ships.
We are going to pay Australian workers to build a ship while our own ship builders are laid off??
End borrow and spend tactics now.
Government waste comes at us from all angles. Always!
...and it wears multiple hats!!!
We can see the effects of the Public Option in Defense and Education... Wait till you Healthcare is under that....
Oh come on now...this is just a drop in the bucket. A bucket full of crap that the taxpayers would not buy if they were to decide. What is not seen is even more costly. The wasted material, manpower and talent, that if left in the private sector could have been used to produce goods and services that people need and want. In short wealth.
Oh wait I almost forgot building wealth in the U.S. is punished with taxation at a higher rate than anywhere else on earth. It is also punished by onerous regulation.
Adam Smith wrote of the power of the unseen hand in the market. He wrote of how this helped to create the wealth of nations. Today in America we're being impoverished by the unseen hand of government regulation, waste, and taxation. The chinese will eclipse us within three years as their government seeks way to allow the free market to have a free hand. Here our government seeks to find ever more ways to intervene.
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.