Defense cuts to affect Austal?

MOBILE, Ala. (WALA) - Analysts said if defense budget cuts do happen, they could mean bad news for Austal USA, a major employer here in Mobile.

Austal builds Littoral Combat Ships, or LCS, and Joint High Speed Vessels for the Navy.

DEFENSE ANALYST ON POSSIBLE CUTS

Stuart Slade is a Navy analyst for Forecast International, a Connecticut company that provides defense analysis and intelligence.

Slade said, "They're dependent on two programs, and two programs only, both of which are vulnerable to cuts.  If they lose both programs, there's no reason for Austal to be operating in the United States, not in military operations anyway."

FOCUS ON LCS

Slade said the LCS program is especially vulnerable to cuts because it's so big.

There are two classes of LCS ship designs:  Class One built by a group formed by Lockheed, and Class Two built by Austal.

Slade said, "It could mean one of the two designs will be scrapped completely.  As I said, they're complementary, so, I'm going to go out on a limb and suggest that, probably, we'll see an equal 'pain for all' cut, with cuts spread equally throughout both classes.  That's not too bad from Austal's point of view."

A "BETTER" CLASS?

There’s another encouraging note for Austal, according to Slade.

He said, "I suspect if one of the LCS was going to be cut completely, it will be the LCS One rather than the LCS Two.  The Austal design has a lot of very valuable features to it. It has a large mission bay, and it has a lovely large flight desk that helicopter pilots absolutely adore."

LOOKING AHEAD

Senator Jeff Sessions talked about the possibility of cuts back in July of last year.

He said, at that time, "We are in a tough time financially. If the sequester that's in place now is not altered, I think we'll be cutting the Defense Department way too much and could damage programs like this."

  BY THE NUMBERS

Austal has a workforce of about 3200 people right now.

WHAT'S AHEAD?

The Chief of Naval Operations is scheduled to visit Austal Friday to tour the facility