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CNO: Cutting costs key to fleet’s future

“Tough choices and appetite suppression” are two keys to the Navy reaching its goal of a 313-ship fleet, Chief of Naval Operations Adm. Gary Roughead said Wednesday, because the service needs to keep around its existing fleet for as long as possible and simultaneously control costs for the new ships it wants.

“We cannot afford any gold plating,” Roughead said, and he reiterated the need to manage ships’ life-cycle costs, “maintain restraint when designing manning models,” and field the most efficient fleet as possible to get ahead of another potential spike in fuel costs.

Roughead told a packed auditorium at the Surface Navy Association’s annual symposium that he has been studying the operating costs of the Navy’s latest ships, and the prospect of high fuel and operating costs decades from now “scares the heck out of me.”

The world is running out of oil, he said. “If we don’t get serious about energy, we’re delivering a terrible future to our children.”

To stave that off, the Navy needs to put its maximum effort toward making its ships as efficient as possible, Roughead said. “It’s not just going to be trailing another shaft or turning off lights in more spaces.”

Another problem is the financial crisis, which threatens to impose drastic cuts on the funding the Navy can get from Congress. Roughead said he thought the full effects of the downturn “are still to be felt,” but he ticked off a few dynamics he’s been watching:

• The service’s fuel costs have gone down as oil has retreated from its record peaks last summer.

• Roughead said he is “very interested” in what the national economic situation does to U.S. shipbuilders, many of whom depend on Navy contracts for survival. Earlier in his presentation, he said the Navy must maintain the U.S. industrial base, even though he joked Navy shipbuilding has gone “digital” – a series of ones and zeroes, referring to the numbers of ships the Navy plans to buy.

• The Navy is watching the effects of the economic downturn on individual sailors – for example, the leaner times could change many of the arrangements for a sailor when moving from Naval Station San Diego to Naval Station Norfolk, Va., he said.

• Roughead said Navy budgets must account for increased retention as more sailors stay in to keep the job security and benefits of being members of the armed forces.

Overall, even though the service hasn’t yet been fully hit by the U.S. economic downturn, Roughead said he expected the Navy will have to continue to deal with it for the next several years.