Opinion: New Naval Mission Demands Creativity from US Manufacturers

By: Kevin Ruelas, CEO, Channel Technologies Group

Money and budgets will always be a topic of conversation and a prime target in Washington. The method, size and timing of the cut may not yet be known as there are many moving parts. However, if or when the cuts do happen, our businesses must be prepared to respond to protect the lives and livelihoods at stake for our workers and our sailors. Companies with longstanding industry expertise must quickly reorient their manufacturing capabilities to produce better capabilities to meet new demands for defense solutions that are affordable, reliable and suited to meet today’s threats.

Every day we see new stories about the looming threat of the automatic sequester. Even if sequestration does not happen, there are many other indications that defense spending will be cut first. Historically, defense budgets have always decreased following the end of war-time efforts. Following the end of the Vietnam War the budget dropped by 33 percent and it dropped by 36 percent after the Cold War. In addition, we are seeing budget constraints across the federal government. We should not assume the defense budget will be any different.

So while there is the very real chance that military budgets will decrease, at the same time the military will transition from combat to peace keeping. Therefore, the tactics will need to change. This means demands for technology and solutions will also change.

This poses a challenge for us in the industry; how will we face decreased budgets, likely resulting in less revenue, yet reconcile growing pressure to deliver new products to meet a changing global mission?

In order to succeed we must continue to innovate our products and our companies. In our industry of marine technology, we will see Navy assets switch from combat missions to missions in counter-terrorism, peacekeeping and political stability operations. These missions require substantial navy presence in littoral water. We must identify technologies needed to support those missions and then determine how to produce them in the most efficient manner.

A good example of this can be seen in today’s US Navy Light Weight torpedoes. Legacy weapons of the 1970's like the MK 46 & 50 torpedoes are still being used as primary ASW weapons. Meanwhile, the Navy has initiated a new production effort of the MK 54 Lightweight Hybrid Torpedo. This weapon will surpass the capabilities of its forebearers in homing and seeking as well as deployment, while at the same time being more versatile in multiple environments such as littoral waters. Yet, the expected cost of this torpedo should be less than its predecessors.

This is exactly the kind of effort the Navy and Industry need to focus on to assure the future success of the nation. A better solution that delivers more capabilities at a price that is reasonable.

The imperative upon all of us as innovators of defense technologies is to find opportunities within our own companies to save budget on our existing products and allocate those savings towards research and development. Here at Channel Technologies Group, we are investing in next generation technologies and systems while, at the same time, focusing on driving cost out of the solution in the design and production phases. Our vertical integration helps us bring the right people on board to help us anticipate future needs of the Navy and provide strategic direction on how to get there. In this way we are doing our part to prepare ourselves and our industry for the coming changes on the horizon.

While we firmly believe that it is in our nation’s best interest to maintain sensible funding levels for the Pentagon and are opposed to the automatic sequestration of funds, we need to take action today to place our industry in a position to respond to a new defense landscape which includes new budgets and mission realities.