Thursday, March 28, 2013

The Business of the Navy

An anonymous reader made a great comment and posed a question in the Naval Guns post that warrants a post of its own to answer.  The relevant portion of the comment was,

“Given that there will be very limited quantities of 155mm LRLAP ammunition actually procured, you have to wonder what advantage the full size AGS has over AGS Lite, other than a higher ROF [ed.: rate of fire].”
The comment correctly points out that the AGS has only a single, very limited use ammunition (for shore fire) and that the AGS Lite (AGS-L) is just a marketing proposal, at this point.  Nevertheless, the question as to what the advantage is of the AGS over the AGS-L has an illuminating answer.  It has nothing to do with ROF or tactical employment.  The answer is that the AGS has the overwhelming advantage, from the Navy’s perspective, of being fully automated from the strike down of ammo to operation of the mount.  The AGS-L would require a good deal more manning.

Reduced manning is the new Holy Grail of the Navy.  Why?  Because the Navy is no longer in the business of warfighting.  The Navy is now in the business of being a business that builds ships as its product and reason for existence.  The obsessive desire to build ships even to the detriment of warfighting capability, as we've previously discussed, means that construction budgets must be constantly increased and Navy leadership has identified manning, specifically reductions in manning, as one of the more obvious and easy sources of freeing up additional funds for construction.

AGS - Good Weapon or Good Business?

Over the last few decades we’ve seen a host of business-based initiatives and programs spew forth from the minds of Navy leadership.  These programs have been about efficiency, synergy, re-organization, cost effectiveness, six-sigma, diversity, etc.  You all know the litany.  The Navy bought into the flawed idea that a warfighting organization can be run like a commercial business.

I’m not going to further delve into the pitfalls of running a combat organization like a business because, frankly, I think the problems are obvious to everyone except Navy leadership.

The key point to take away from this post is that the Navy’s procurement, weapons programs, and planning is being driven by business concepts instead of warfighting considerations.  Which is better: the AGS or the AGS-L?  I don’t know but I do know that the decision should not be based on accounting.  Select one or the other because of combat effectiveness.

Before we turn this into strictly an AGS discussion, remember that this type of flawed business-based decision making is being applied to all aspects of the Navy.  The Navy exists to fight not to make a profit.  Warfighting decisions will often be incompatible with business practices.  So be it.  We’ve got close to 400 Admirals.  You’d think a few of them would realize this.


  1. AGS? Nothing good. Its a idea which turned out to be stupid.

    Lets look at the original Idea.

    AGS was supposed to,

    1) Be able to fire dumb rounds and advanced long range rounds.
    2) Fire shells......not rockets..these are gun assisted rockets.
    3) Fire a good rate and be easy to reload.

    It cant do any of that.

    But hey how could we cancel some admirals pet project?

    Screw the Military-Industrial complex. Thats nothing.
    The problem isn't the military or the Industry. The problem are stupid politicans and corrupt Admirals and Generals.

  2. Reduced manning is more of a big deal at present due to the relatively high cost of navy personnel. This isn't something that is unique to the navy though. Personnel costs and budgets have risen substantially over the last 20 years for all the branches. Now it is debatable if the cost benefit for the AGS being manless is worth it but across 3 ships with 2 guns for a 30 year life, the manning costs are somewhere between 150-200 million. If we assume they were originally planning on 20 DDG(x) ships, the costs saving is 1-1.3 billion over the lifetime which isn't insignificant.

    Now cutting out the ammo flexibility to get there probably isn't the best idea in the world.

    1. ats, you point out that the manning costs for the three Zumwalts would run $200M or so if the guns had to be manned. I get the sense that you aren't really arguing for minimal manning but I'm not sure. Regardless, look at what happens if we lose one Zumwalt due to insufficient manning for damage control. We'll have lost a $4B ship due to a desire to save $200M. If the ships were commercial vessels and would never see combat then the accounting is overwhelmingly in favor of minimal manning - but that's not the case.

  3. The original concept for 155mm AGS was part of a flawed naval fire support model; which was in turn part of a flawed operational model for the Zumwalt Class; which was in turn part of a flawed model for managing the USN's overall fleet composition; which was in turn part of a flawed shipbuilding business process model; and which -- last but not least -- was in turn part of a flawed technology management concept we know today as Transformationalism.

    With those kinds of odds stacked against it -- five out of five serious barriers the developmental program has to get across -- it is a wonder that a working version of AGS even exists at all.

    But the ammunition for AGS is another story. The fire support requirements for a large-scale amphibious assault call for the capability to fire tens of thousands of 155mm equivalent projectiles over a relatively short timeframe. And yet people who have worked the AGS program have indicated that there has never been a requirement to procure 155mm LRLAP in numbers beyond a few thousand rounds.

    Does there not seem to be some kind of major disconnect here?

    1. You're right, there is a disconnect. Remember, though, that the Navy didn't want any Zumwalts. It simply turned out to be cheaper to build three than to accept the cancellation penalties (contracts were already in place). On top of that, the Navy has never been serious about naval gun support since WWII. With those two factors in mind, the lack of versatility in the AGS or limitations in quantity or type of ammunition available shoud not be surprising. Neither the AGS nor its mission is a Navy priority.

  4. A Global Force For Good™.

    1. Well, that pretty well sums things up!

  5. OK, Lets face the true, the Navy is in the bussiness of designing and building ships. It alway has been resposible for these to some extent, as it been the major consumer in the US for decades, And today, given the life and death power the USN holds overs the remaining shipbuilders, it has become the defacto trust controlling all shipbuilding in the US.

  6. The day that we let the concept of "managment" preside over "command" was the beginning of all this misery we are in..we don't fight a war, we manage it. So, industrial concerns take over the military needs. There is absolutely no need what so ever for these ships but industry development blablabala runs the day.Since US naval industry only produces for the US it is a viciaous circle. Manning levels are allways a tenancious problem..If manning costs money, well, produce ships such a way for maximum bang out a buck, but no, this is not managing...alas, misery is ours.

  7. All this reminds me of a lecture I went to years ago (John Lehman was SecNav at the time) I wish I could remember the lecturer's name but I do remember he was from the War College.
    His premise was that the Navy's mission, it's reason for being, was simply to put Ordnance On Target (OOT) and every decision we make as leaders in the Navy should be informed by that rationale. "Does this decision/project help put OOT? If yes, do it. If no, don't. It's that simple, he said. As a mental exercise, he had us think about the last dozen or so decisions we had made and to decide whether or not they stood up to that rationale. He went on to point out that in order to perform the mission of OOT, the Navy needed ships that could fight, and survive to fight some more, or, to fight and then sacrifice so that a more capable ship could fight and survive. It sounds too simple but I think he was on to something. Does less manning increase the ability of the Navy to put OOT? Does the LCS increase the ability of the Navy to put OOT? Does having a single 5" gun on major platforms increase their ability to put OOT? Does having 2 admirals per single ship increase the Navy's ability to put OOT? You get the idea.
    Running a war-fighting organization is NOT the same as running a business. The sooner we get leaders that return to that conclusion, the better off we will be. Can you imagine someone like Halsey, Spruance, or Nimitz surviving in today's Pentagon?

    1. William James, you have summed it up well! Running every decision through the filter of the core mission is how every organization, not just the Navy or military, should operate. Sadly, that's not the case in either the military or industry.

  8. The Navy has made itself vulnerable to this technological snake oil sales pitch. Admirals look at the budget and cringe at personnel costs. Their dream is a platform(s) that requires as few sailors as possible. It's what in large part drove the LCS and has been one justification for the Ford class. And yes, reduced manning would save a pile of money.

    Merchant ships have made tremendous strides in reducing costs and manning. They are often single-screw, single engined vessels that are highly automated. The E-class Maersk container ship has half the crew of a WWII Liberty ship that's 1/10th her displacement. Navy leadership wants that kind of change, badly.

    But we know warships do more than just go from point A to B. They must have redundancy in many things like propulsion and sensors. Both for better resistance to battle damage and sometimes layered systems like SAM/CIWS. If too much of that is sacrificed then you end up with fragile and weak LCS.

    1. A look at what is done in Europe might be interesting. The new French-Italian Horizon destroyer is very well equipped with reasonable crew. Of course, missionsets are different from what is done in the US Navy that seems to require the fleet to be able to attack very far inland. This is of course driven by the ongoing competition between the forces. The fleet has to cover the seas and get the landforces were they are needed, not to attack Afghanistan from the Red Sea! What possible situation would require the fleet to open fire with guns at targets 50miles inland?All this is overcooked and costs US taxpayer an enourmous amount of betterspend money!

    2. Its not just the damage control aspect that is different between merchant ships and warships but a difference in cruising speed/top speed. Merchant ships have their top speed and cruising speed close to each other since they don’t want to waste money on engineering plant that they don’t use. Warships have a wide difference between top speed and cruising speed, for example 30 knots top and 15 knots cruising and will operate at a wide range of speed depending on conditions. Such a propulsion plant is going to be very different and more complex then the merchant ship which for example goes up to 20 knots and stays that way until they get to the next port.

      A place where the Navy could learn from merchant service is to stop the large turnover in personnel which causes the Navy ships to be overmanned since many of the personnel are under instruction for their positions. The merchant ships don’t care if someone has been a electrician for 30 years and has not advanced as long as they are a good electrician. The Navy thinks that its “Up or Out’., if you don’t get promoted your no good and will get kicked out. So they have huge costs of recruiting, training, qualifying, but then as soon as the person has been in the job for a few years at most they get promoted or kicked out and the Navy has to have someone else in the pipeline to replace them.

      Most Navy personnel are fairly inexperienced in their job, both officers and enlisted. That is why they so often have to depend on shipyard or contractor personnel for the more difficult work. Shipyard and contractor personnel who themselves often have 10, 20, 30 years in the same job. If you told the merchant ship, shipyard or contractor owners that their electrician who does a good job must get promoted to shop foreman or get kicked out they would call you crazy

    3. The easiest way to quickly reduce the Navy's ship manning costs is to quickly reduce the number of ships which have to be manned.

      This is the Navy's preferred approach, as evidenced by 30 Spruances quickly decommissioned in the last decade, 31 Perrys now in the process of being decommissioned, and some number X Ticonderogas likely to become near-term targets for decommissioning within the next several years.

    4. william the belgian, you make a good point about possible overlap between the Army, Air Force, and Navy (at least, I think that's the point you're making). Perhaps the Navy should leave inland strike to the Air Force or Army. If so, though, two points come to mind. First, that doesn't result in a savings, it only shifts the cost from one branch to the other. If the Navy doesn't make a deep inland strike weapon then the Army or Air Force will have to. Second, the Navy is looking at attacking targets that are not within reach of Army or Air Force assets. For instance, targets in northern NKorea or, more obviously, China where the Army has no strike capability at all and the Air Force has only minimal capability. So, I think that's the answer to why the Navy needs to strike 50 miles inland or whatever. Does that make sense?

    5. Anon, I think your comment about reducing ship numbers to solve the manning problem was intended as sarcasm, am I right?

    6. No, it is not sarcasm. I suspect there is an agenda afoot in DOD's senior leadership, with support from some elements in Congress and in the Obama Administration, to use sequestration as a means of permanently reducing USN force structure. It has yet to be seen just how that agenda might play itself out, if it is indeed being pursued as myself and others suspect.

    7. Anon, Ah, OK, I think I'm understanding you now. You're postulating a political agenda aimed at reducing the force level. Without agreeing or disagreeing, let me just ask what motive or objective you see behind this?

      You're undoubtedly aware that the Navy's 30 shipbuilding plan is not even remotely realistic. Thus, the fleet will shrink significantly just due to the convergence of static budgets and increasing shipbuilding costs for the foreseeable future. That said, do you still believe there's additional politics being played out or do you think we're just seeing the natural result of runaway construction costs?

    8. Anon, if you'd like to leave a username just so I can recognize your posts and reply specifically, it would be helpful. You don't have to register, just add a name at the bottom of your comment for recognition purposes. Of course, if you'd rather not, that's OK.

  9. The impetus for effecting a relatively quick reduction in the USN's force structure -- using the near-term impacts of budget sequestration as a means for greatly accelerating the gradual reduction in fleet numbers which would normally be expected to occur over a decade (or so) as a result of the Navy's unrealistic shipbuilding plan -- arises from a historic confluence of interests which is now emerging among a variety of political factions in and out of DOD, factions that in the past would not normally have been allied with each other.

    These allied political factions include far right-wing and far left-wing politicians who would rather the US not take an interventionist role in world affairs; budget hawks who see defense spending as being money wasted on weapons systems that do not work; other politicians who want spending redirected into social programs; and officials inside the Obama Administration who see military action in general as not being a useful tool in managing US foreign policy.

    The US Navy is particularly vulnerable to this ad-hoc alliance of political interests. The USN is the key military component in maintaining America's power projection capabilities, and it is also very expensive to equip, to man, and to maintain.

    If you are generally opposed to American military intervention, except in cases of the most extreme national emergencies, then you would prefer to see the USN's power projection forces reduced. If you think the USN is wasting money on weapons systems that don't work; or if you think social programs are more important than military programs, you would prefer to give the US Navy less money.

    In the face of budget sequestration, two major factors make the USN relatively more vulnerable to agenda-driven force structure cutbacks than the other armed services might be.

    One factor is that the USN is at the point of the spear for power projection capabilities which are thought by some military critics to be inappropriate or ineffective tools for implementing US foreign policy. A second factor is that the Navy has failed to deliver on its major commitments in the area of shipbuilding cost & schedule and in the area of manpower efficiency improvements.

    The carrier battlegroups are the most likely targets for a near-term USN force structure reduction, one driven by an alliance of agendized military spending critics. The CVBGs comprise the greatest single concentration of American power projection capability, and they also embody the greatest visible concentration of USN manpower, equipment, and operational costs.

    I would remark that in pushing their own viewpoints, those in the USN and in the DOD who are vocal critics of the CVNs, and who would spend the Navy's money building other kinds of warships and other kinds of weapons systems, had better tread very carefully here, lest their own more narrowly-focused agendas be hijacked for some larger purpose they themselves would not necessarily buy into; i.e., a quick and permanent reduction in America's power projection forces.

    1. Anon, that is a very well reasoned and well written comment.

      I agree with some or many of the elements of your argument but disagree about the extent and, therefore, effectiveness of the movement. Certainly, there has always been a Democrat/Left faction that has viewed the military as a harmful and unnecessary organization and continually try to reduce it. Further, I agree that there are budget hawks who, while not anti-military, see budget reduction as more important than military size, in the current fiscal environment.

      To be fair, Obama has not been shy about using the military and the administration's budget wishes have been relatively neutral regarding military force size.

      Note that Congress has, on multiple occasions, restored funding for some proposed cuts. For example, Congress is attempting to restore funding for three or four of the proposed Tico/Aegis cruiser retirements. This is where I look at the overall effect and decide that the magnitude of the movement you describe is relatively lacking. Congress, the ultimate arbiter of military force size, is decidedly pro-military.

      The coming reductions in force size are much more a function of escalating costs and budget/debt limitations than any concerted movement to reduce the military. Still, in the end the net result will be reductions, regardless of the reason/cause.

      Finally, as you allude, the military is not helping themselves with a litany of programs that are seen as out of control cost-wise and/or short on capability. These include the JSF, LCS, LPD, EFV, and so on.

      In short, you make some very good points and argue your premise persuasively but possibly overestimate the impact. A great comment and contribution to the discussion!! Thanks.