Congress considering national shipbuilding mobilization modeled on the “Chips Act”

U.S. House and Senate leaders are discussing a proposed ‘Ships Act’ to dramatically upgrade U.S. naval and commercial shipbuilding along the lines of the $52 billion CHIPS Act supporting U.S. semiconductor manufacturing, according to Luke Lorenz, Director of Legislative Affairs, Navy League of the United States.

Lorenz was the keynote speaker at the Propeller Club of Northern California Maritime Day webinar on May 23rd.

Lorenz outlined the Ships Act concept to the Propeller Club audience: “The potential for something ... would be called the Ships Act. Again, I say ‘potential’ because this is still very much … in the brainstorming phase, but this discussion is happening among a number of important offices that we've been speaking with in the Senate and the House … that carry a lot of weight … a bill that would somewhat mirror the CHIPS Act, which of course was intended to bring back production of microchip manufacturing to the United States … that had a number of provisions to bolster that industrial base and produce at … various facilities … microchips. There's an interest in doing something similar for the shipbuilding industrial base with a significant investment in our public shipyards …a number of different incentive programs for private and smaller shipyards (with) emphasis on workforce development.”

Lorenz explained that shipbuilding is now a top national security priority as China ramps up its naval and commercial shipbuilding: “Expanding shipbuilding has impacts far beyond just our shipyards. It also impacts a number of other … tangential industries as well … We don't necessarily need to be on a one-for-one basis with China. China has expansive shipbuilding capacity, but let's bear in mind that we still make a more capable, more advanced ship. So, we don't need to necessarily be on that one-for-one basis with China. However, we do need a certain number of ships in our fleet to be able to counter a larger maritime force coming from the Chinese if such a conflict were to occur. And so, this type of shipbuilding program … is absolutely imperative”

Ships Act Endorsement

An endorsement for the Ships Act appeared in the conservative National Review entitled “Follow Up the Chips Act with the ‘Ships Act’” The article was written by retired Navy Captain Jerry Hendrix a senior fellow at the Sagamore Institute who argued: “… the United States must come to grips with the fact that it is going into this competition from a position of weakness due to the atrophying of its defense industrial base over the past four decades, especially the shipbuilding and ship-repair industrial base. During World War II, the United States had over 50 shipyards, public and private, that could either build or repair ships in excess of 500 feet in length. Today it has fewer than 20. This is largely because when the United States chose to withdraw subsidy support from its shipyards, nations in Europe and Asia did not. Recognizing the vacuum that the U.S. created, Asian and European nations chose to increase national subsidies to gain market share. Today the world’s top three shipbuilding nations in terms of gross tonnage are China, South Korea, and Japan. China has 19 modern shipbuilding yards pumping out commercial and naval ships at an incredible rate. One of China’s shipyards is so large that its capacity surpasses that of all U.S. shipbuilders combined.

If the United States is to compete and win the current great-power competition, it must, for the same reasons argued by proponents of the Chips Act, “onshore” its shipbuilding and ship-repair capacity at scale once again. This will require a Ships Act that would direct government funds to modernize the nation’s existing shipyards while also directing the building of more construction and repair yards. Care should be taken to ensure that shipyards are revitalized and built where the nation needs them. These efforts should focus on the regions of competition, the Pacific, and the Arctic, as well as provide strategic industrial depth away from our vulnerable coasts, along the great river systems, and in the Great Lakes, as was the case during World War II. As a nation, we cannot be dependent on foreign-built ships to carry commercial cargo both to and from U.S. ports …”

Outlining a Possible Ships Act

Lorenz said the outline of a possible Ships Act is still a work in progress in the House and Senate, but it might involve reactivating older or shuttered shipyards and would have implications for California because of the need to focus shipbuilding assets on the Pacific Ocean. Aside from building or rebuilding shipyards, an almost equal challenge will be finding and training American workers who can be deployed to perform the welding, painting, engineering, and other steel fabrication required to build ships: “So, this is still being cobbled together. It's still happening kind of behind the scenes. Nobody has stepped forward yet to really say we are going (to) put forward a Ships Act. … The Navy League is consulting with various relevant offices to see if something like that could be beneficial and could potentially become a reality … Now, this would have, significant implications for California. Obviously, we want to have that presence in the Pacific. So, some of the shipyards and docks that have fallen into disrepair or ... lack of use, in recent years … might come back online…

Lorenz told the Propeller Club audience that the focus of U.S. shipbuilding workforce development is getting high priority with leaders in the House and Senate for the next National Defense Authorization Act: “The second priority is workforce development. This is an enormous issue across every sector of the American economy, but it's certainly very, very ... clear in the shipbuilding industrial base as well … I've been told that … in this National Defense Authorization Act, there will be authorized a working group … made up of industry, government, and academia at the highest levels to deal with this issue of workforce development for the shipbuilding industrial base. Now, I know what you're thinking. Sometimes when Congress puts together a working group or committee to study something or commission, it might be a way of looking like we're doing something even if we're not doing something or a delaying tactic. ... I don't think that's the case for this one because, with all the offices I've spoken with, they realize this is a very significant issue and it's a national security issue. If we cannot produce these vessels, my goodness, what a tremendous vulnerability that is! And that comes down to the workers themselves.”

In 2020, U.S. Senator Roger Wicker, (R-Miss.), a senior member of the Senate Armed Services Committee, announced the Securing the Homeland by Increasing our Power on the Seas (SHIPS) Implementation Act, S.3258. which made it the policy of the United States to reach a 355-ship Navy. The SHIPS Implementation Act would authorize the use of multiple cost-saving measures and direct the Navy to procure 39 new ships …, according to a press release.