Huntington Ingalls cutting costs of U.S. aircraft carriers

By Andrea Shalal-Esa

WASHINGTON (Reuters) - Huntington Ingalls Industries Inc (HII) has left "no stone unturned" in trying to lower the cost of the USS Gerald R. Ford, the first of a new class of aircraft carriers to be christened Saturday, a top company official said.

The company is also working hard to apply lessons learned from that first ship to the next one, the USS John F. Kennedy, which is under construction now at Newport News Shipbuilding, said Matt Mulherin, president of the shipyard and corporate vice president of Huntington Ingalls.

"You've got to go and take the lessons that you need to learn from the Ford and ... we're doing that extremely well," Mulherin told Reuters in a telephone interview.

The Navy has pledged to cut the cost of the Kennedy by $1.2 billion - excluding non-recurring engineering costs and inflation - from the projected $12.9 billion price tag of the Ford, which is 25 percent more than initially expected. Congress has imposed a cost cap of $11.4 billion on the next ship, the Kennedy.

Susan Ford Bales, the late president's daughter, is scheduled to smash a bottle of American sparkling wine across the hull of the city-sized ship on Saturday at a christening ceremony to be attended by hundreds of dignitaries, including Chief of Naval Operations Admiral Jonathan Greenert and former Defense Secretary Donald Rumsfeld.

Mulherin said his company was carefully tracking labor costs and overtime, and setting strict criteria for performance on every job in the shipyard as work was completed on the Ford. The ship is about 70 percent complete, and has about 27 more months of testing and work ahead before delivery to the Navy.

"We have left no stone unturned," Mulherin said. "We are monitoring the data on a daily and weekly basis to make sure we understand where we are."

He said the company was working closely with the Navy to ensure that work on the Kennedy was even more efficient, with a larger percentage of the ship's equipment being assembled in shops and on the dock before being installed on the ship.

Doing more of the work indoors meant more sensitive electrical components and other materials could be installed without fear of weather damage, he said.

Mulherin said the company is in talks with the Navy about building a new manufacturing hall at the yard, a project that would cost tens of millions of dollars up front but could generate big savings on the Kennedy and subsequent ships.

The two sides were discussing ways to share the cost of building the hall, but no agreements had been reached, he said. The Navy has helped fund similar facilities for its submarine programs to help double the production rate, Mulherin said.

Navy spokeswoman Commander Thurraya Kent declined comment specifically on the new manufacturing hall, but said the Navy was working closely with the shipyard on "new build strategies" to reduce the cost of the Kennedy and future carriers.

Mulherin said costs for new components were also coming down since suppliers had already developed them for the Ford.

Newport News was also investing heavily in its apprentice school to train new employees, as well as new three-dimensional simulators and other technologies aimed at making the production process more efficient, Mulherin said.

(Reporting by Andrea Shalal-Esa; Editing by Phil Berlowitz)