Two military contractors, General Dynamics and Northrop Grumman, agreed on Wednesday to a Pentagon deal that would clear the way for all three of the Navy's multibillion-dollar stealth destroyers to be built at General Dynamics' shipyard in Maine, Pentagon officials said.
Northrop Grumman, which had expected to build one of the DDG-1000 destroyers at its shipyard in Mississippi, will contribute major components for each ship. It will also receive contracts for two other destroyers as the Navy restarts production of an earlier model.
Stock analysts said the deal, pushed by Defense Secretary Robert M. Gates, appeared to be to the benefit of both contractors.
"Mr. Gates delivered a gift to the shipbuilders," said Loren B. Thompson, a military consultant and the chief operating officer of the Lexington Institute, a research group.
Military officials said the precise financial arrangements still needed to be worked out.
Pentagon officials had estimated that the first of the new destroyers, also known as the Zumwalt class, would cost $3.3 billion, with additional ships costing at least $2.5 billion each if the Navy had built the 10 that were originally planned.
But if only the three are built, independent analysts said, various economies of scale would be lost, and the average cost could rise to $5 billion or more.
Still, in proposing a range of cuts in arms programs on Monday, Mr. Gates said he would build only one of the destroyers if General Dynamics and Northrop Grumman did not agree to have all three built at Bath Iron Works in Maine.
Mr. Gates said it would have been far too costly and inefficient to have both shipyards gear up to be the lead contractor.
Representative Gene Taylor, a Democrat from Mississippi and the chairman of a House seapower subcommittee, said the deal was also good for Northrop Grumman because it ensured that the company was "aligned with where the Navy sees its future."
Under the plan, Northrop Grumman will restart production of the DDG-51, also known as the Arleigh Burke-class destroyers, at its Ingalls shipyard in Pascagoula, Miss., and build the first two vessels. General Dynamics will build the third once it completes work on the DDG-1000s at the Bath Iron Works. Officials said it is like that the companies would split any subsequent orders through some type of competitive bidding.
Military analysts have estimated that the DDG-51s could cost an average of $1.5 billion to $2 billion each, depending on how many are eventually built.
Navy officials had originally embraced the shift to the DDG-1000, in part because it will have new types of radars, designed by Raytheon, that allow it to make precise scans in relatively cluttered areas near coastlines as well as at sea. That capability was designed to fit the Navy's increasing emphasis on operating in shallower, coastal waters.
But as the cost estimates rose, Navy officials began backing away from the new ship last year, saying they could no longer afford it.
Still, the DDG-1000 had substantial political support from Senator Edward M. Kennedy, Democrat from Massachusetts, where Raytheon is based, and other legislators from New England who were concerned about losing jobs at the Maine shipyard.
Mr. Gates also said on Monday that the Navy would gradually slow the production of aircraft carriers, with the number dropping to 10, from 11, after 2040. His proposals included advance money for expanding construction of the Virginia-class submarines to two each year, starting in fiscal 2011, from one now.
Somali Pirates Get Ransom and Leave Arms Freighter
Jason R. Zalasky/U.S. Navy, via Reuters
The crew of the hijacked Ukrainian merchant vessel MV Faina on the deck of the ship, anchored off the coast of Somalia in October.
NAIROBI, Kenya The saga over the Ukrainian arms freighter hijacked off Somalia's coast more than four months ago drew to a close on Thursday almost exactly the way the pirates had predicted: with the booty.
According to the pirates and maritime officials in Kenya, the ship's owners paid $3.2 million in cash, dropped by parachute and on Thursday evening the last of the heavily armed pirates made their way off the ship.
"The fact that this took so long, that's not good," said one of the pirates, Isse Mohammed, in a telephone interview. "But we got the cash in hand, and that's good. That's what we're interested in."
Mr. Isse added that his gang would continue "hunting ships" because "that's our business."
But first, Mr. Isse said, he had to escape. Ever since the Ukrainian ship was hijacked by Somali pirates in dinghies, it had been ringed by American warships determined to keep the pirates from unloading the weapons.
Mr. Isse said that the pirate leaders were divvying up the money in Xarardheere, a notorious pirate den near the ship's anchorage, and that he and his colleagues had deputized young gunmen to stay aboard until all the pirate leaders had gotten away. Only then, he said, would the ship be released.
Late Thursday, Viktor Nikolsky, the acting captain of the ship, called the Faina, said it was finally under the protection of the United States Navy and would head to Mombasa, Kenya, the Associated Press reported.
More than 100 ships have been attacked in Somalia's pirate-infested seas in the past year, but no hijacking has attracted as much attention as this one. It stirred fears of a new epoch of piracy and precipitated an unprecedented naval response. Warships from China, India, Italy, Russia, France, the United States, Denmark, Saudi Arabia, Malaysia, Greece, Turkey, Britain and Germany have all joined the antipiracy campaign.
The Ukrainians' doomed voyage began in late August, when the Faina departed the Ukrainian port of Oktyabrsk, near the Black Sea, bound for Mombasa. It was a tall, lumbering freighter. Its captain was Russian and its 21 crew members were mostly Ukrainian. Its cargo was secret.
On Sept. 25, the Faina broadcast an S O S. Three small speedboats were heading straight at it fast the typical pirate swarm.
On Sept. 26, the news broke: The Faina had been hijacked 200 miles off Somalia's coast, and its cargo, revealed reluctantly by the Kenyan government, included 33 T-72 Soviet-era tanks, 150 grenade launchers, 6 antiaircraft guns and heaps of ammunition.
American officials worried that Islamist insurgents ashore could get the weapons and drastically change the dynamic in Somalia, where a weak transitional government has been trying to resist militant Islamist groups.
By early Thursday night, United States Navy officials said no weapons had been unloaded. But witnesses ashore reported pirates removing grenade launchers. Mr. Isse said the pirates had tossed some antiaircraft guns overboard "so we can get them later." He seemed unaware of saltwater's corrosive effects.
The pirates always said they were in it for the money initially they had demanded $35 million. There were mixed reports about their treatment of hostages. The captain died mysteriously after a few days, which the pirates attributed to illness. They kept his body in a refrigerator.
The destination of the weapons remains unclear. The Kenyan government says that it owns them, but the pirates and Western officials have said that the arms are destined for former rebels in southern Sudan and that Kenya was the transit point.
Piracy is a huge business in Somalia, which has limped along since 1991 without a functioning central government. Many maritime officials have criticized ship owners who pay ransoms, saying that only leads to more attacks.