Four destroyers of very advanced design are currently under construction, in a Mississippi shipyard, for the shah of Iran. But the shah won't be needing them. He's gone out of the arms business, and his successors have canceled the order. What happens to the ships? They are about half completed; the first two of them are scheduled to be launched later this year. The Department of Defense says that the U.S. Navy needs them. This suggestion is currently drawing a chorus of boos and hisses from people in Congress, who retort that the American taxpayer has no obligation to bail out the shah.
Unfortunately, it's not quite as simple as that. Foreign governments are not permitted to buy directly from American arms manufacturers. The shah ordered the ships from the U.S. government, which in turn signed a contract with Litton Industries to build them. Litton is working for the U.S. Navy. The Iranian government's past deposits in its arms fund here are large enough to cover the work already done on the ships. There would be no financial loss to Litton or to the Navy if work were suddenly stopped. But what does one do with four half-finished destroyers? They are too large to plant philodendron in.
If the United States stopped contruction and charged all the costs so far-something over half a billion dollars-to Iran, it would certainly sour relations with the new revolutionary government. It needs the money-just as, conversely, the United States needs Iranian oil. But there's another consideration. The Iranians would have a right to seek an alternate buyer for the ships. When the Iranians canceled their order for the F16 fighter planes, an alternate buyer was easy to find. Israel was standing in line right behind Iran, and when Iran dropped out the result was only to make it possible to fill the Israeli order sooner. But finding a customer for the ships is harder.
All of the world's navel powers have more than enough capacity to build whatever ships they need, and it is a political impossibility for any of them to buy foreign hulls. Any buyer would have to be a government that does not now have a substantial navy. But these destroyers are dangerous weapons, and countries that do not have advanced warships now under no circumstances should be encouraged to acquire them.
These destroyers were the extreme example of all that was wrong with the uncontrolled and uncontrollable sales of American arms to Iran. The Iranians did not begin to have the depth of technical capacities to man them. The American government was supposed to train the crews, but that part of the bargain was lagging badly. These ships in the shah's hands would have been a genuine menace.
The ships are going to be completed, and the only place for them is in the U.S. Navy. Two of them can be substituted for similar ships already on the Navy's future program. To keep them under the U.S. flag will cost $1.3 billion over the next couple of years. That's a lot of money, but it's not a bad price for getting out of the Iranian arms deal. You could say that the money is going, not for amrs, but rather for arms control.