General Dynamics yesterday threatened to halt construction of the newest nuclear attack submarines unless the Navy pays what the company considers back bills.
"Contracts for these ships have been materially breached by Navy actions," said General Dynamics, which claims the Navy owes it $544 million for "more than 35,000" changes in the 688 class of attack subs under construction by the company's Electric Boat Division at Groton, Conn.
The company's statement marked the first time a nuclear submarine program has been threatened with such a stoppage, although two similar threats were made on Navy surface ships by other shipbuilders in the past.
The Navy is expected to ask a federal court to order Electric Boat to continue work on the subs. The company has threatened to "stop all work" on April 12.
"The Navy will take such steps in the courts or otherwise as may be necessary and advisable to protect the public's interest and the national defense," the Navy said in a formal statement issued yesterday.
Navy Secretary W. Graham Claytor, after meeting yesterday with Sen. Abraham A. Ribicoff (D-Conn.) and other lawmakers whose constituents would be affected by a shutdown, said: "We will do whatever we have to see that these submarines are finished."
Besides going to court for an injunction, Clayor said, the Navy could exercise the contract option to take over the work on the subs "and finish it ourselves."
Another option - one opposed by the governors of Connecticut and Rhode Island - would be for the Navy to consider the contract terminated and let another shipbuilder build the subs.
The threatened work stoppage is the latest round in the long fight between the Navy and its shipbuilders over who owes whom for unanticipated costs. The shipbuilders, principally Electric Boat, Litton and Newport News - claim the Navy owes them a total of $2.7 billion.
Electric Boat not only is building the 688 class of attack subs but is the only builder of the Trident missile submarine, which is supposed to replace the aging fleet of Polaris and Poseidon subs now providing the nation's sea-based nuclear deterrent.
General Dynamics, which already has delivered two of the 688 fast attack subs, has a contract to build 14 more. It said stopping work on the 688 class subs, which provide about 14,000 jobs, mostly for residents of Connecticut and Rhode Island, would not affect the Trident program.
But Rep. Christopher J. Dodd (D-Conn.), whose district includes the yard, disagreed. He said last night that if the work stoppage takes place it will "clearly" drive up the price on Trident.
Already Trident is experienced a 50 percent cost overrun and is a year behind schedule.
Gov. Ella T. Grasso of Connecticut, a Democrat, came to Washington yesterday to help mobilize the state's congressional delegation to save the 14,000 jobs linked to the attack sub contract.
Sen. Cllaiborne Pell (D-R.I.) said Electric Boat "is blackjacking the Navy into succumbing to its demands."
Dodd predicted the Navy will go to court to stave off the threatened shutdown. He added that then Electric Boat must scale down its $544 million claim because "Congress will not support such an inordinate amount. This is not going to fly."
"The company," said General Dynamics in a statement from corporate headquarters in St. Louis, "is taking this action reluctantly and only as a last resort after making strenuous efforts over the past three years to negotiate a fair and equitable finaancial settlement to cover the enormous impact of the Navy's unilaterally directed engineering and design changes" which made "it impossible" to build the subs efficiently.