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Caller-Times June 26, 2005

Unraveling the price of freedom

With a modernization plan mirroring that of many large corporations, the Navy's aggressive strategy could spell trouble for the Coastal Bend

By Brad Olson

Since 1999, the Navy has slashed 3,500 of its Coastal Bend forces in a corporate-style, service-wide austerity program.

Years before the 2005 Base Realignment and Closure proceedings, the Navy's personnel presence in the Coastal Bend declined from more than 9,500 in 1999 to about 6,000 in 2004, a decrease of almost 40 percent unconnected to BRAC.

Several reasons led to the cuts - decommissioning older ships, permanently deploying vessels to other areas, eliminating Navy positions for contracting purposes, a surplus of Navy pilots and major budgetary constraints. But the cuts also signal a sea change in the Navy's style of management, led by Adm. Vern Clark, chief of naval operations.

Clark has touted an aggressive modernization plan based on a major reduction in personnel that theoretically will allow the Navy to afford expensive weapons systems and vessels it deems essential to its future. Beyond the need to reduce personnel, Clark has proposed payment and benefits systems that sound much more like corporate civilian human resources packages than any government payroll system, let alone a military program.

Simply put, the Navy is looking a lot more like a business.

While such moves are lauded by government watchdogs and taxpayers, they may spell trouble for the South Texas economy. Local boosters say the same cost-cutting logic drove the Navy to consider closing Naval Station Ingleside. One defense analyst says Navy communities such as Corpus Christi and Ingleside can expect similar cutbacks in the future because the Navy's modernization movement includes consolidating most of its resources to the east and west coasts at bases near Norfolk, Va., and San Diego, Calif.

'Power to choose'

The Navy has drawn attention locally for privatization and efficiency programs, but many changes also have been made at a regional level, including consolidating some offices at bases, contracting services and cutting budgets by sometimes 4 or 5 percent each year.

Dick Messbarger, executive director of the Greater Kingsville Economic Development Council, said many of the changes mirror the private sector.

"Those are cost-cutting measures, just like corporate America's doing," Messbarger said. "There's always a danger in cutting positions and losing that close contact with your areas of responsibility. At the same time, the Department of Defense has become more streamlined in the way it does business."

Clark has drawn the most attention for his plans to revolutionize the Navy's personnel system. He has proposed to allow sailors to go in and out of civilian jobs during their military careers, incentive pay for less-attractive duty stations, benefits packages tailored specifically to individual needs and career choice and placement opportunities that could mirror jobs in the civilian marketplace. When presenting these ideas publicly, Clark has often used phrases such as "win the marketplace" and "power to choose."

Task Force Lean

W. Scott Sherman, assistant professor of management at Texas A&M University-Corpus Christi, said the Navy, like private industry, is trying to establish a leaner organization.

"The Navy has a Task Force Lean, which is a lot like a think tank, which takes from business this idea of lean manufacturing and applies that to 'Sea Enterprise' - if the Navy were a company, an enterprise, how do we transform the Navy into a business," he said.

John Pike, director of globalsecurity.org, a Washington, D.C.-based defense think tank, said the changes could spell trouble for the future of the Navy in communities such as the Coastal Bend. Naval Station Ingleside resulted from a Navy strategy that has changed, he said.

"Looking at the strategic homeport initiative 20 years ago, any harbor that was big enough for the Navy to get in was big enough to be a homeport," he said, "whereas now, they are very rapidly on a path to put everything at Norfolk and San Diego.

"In terms of people, it's going to keep getting smaller because people keep getting more expensive."

Sea Swap

One program that exemplifies the Navy's business modernization is "Sea Swap," a plan developed to keep ships operational continuously. Because of Navy regulations allowing sailors six months at port for every six months at sea, many ships in the fleet are not always operational. This model, dubbed "crew swap" on a local level, has been used for several of Ingleside's mine warfare vessels deployed to Bahrain. Because crews rotate every six months, ships can remain operational continuously.

Another such program is a military-wide housing privatization initiative, launched in Kingsville. Through private-sector partnerships, the Navy has been able to procure more than 1,200 housing units in the past seven years, an unprecedented pace considering that some local facilities are decades old.

Another example: Clark visited Naval Air Station Corpus Christi in 2004 and encouraged commanders to constantly evaluate how they spend money and reduce spending by 3 to 5 percent annually, said Capt. Ken Ireland, deputy commander of Navy Region South, which oversees bases in Texas, Arkansas, New Mexico, Oklahoma and Louisiana.

"As a theoretical case, let's say I have $100 million a year to spend in Navy Region South," Ireland said. "Next year I'm going to get $97 million or $96 million. So the question is: How can I provide the level of support that my operational customers - the training wings, HM-15, Coast Guard, U.S. Customs and others - they need, still provide the quality-of-life things that sailors need, keep the air-condition running and still save $4 million a year?"

Reducing personnel

One way he discovered was to regionalize certain offices at local bases. For example, each base had a "Morale, Welfare and Recreation" staff that included a director, ticket manager, several accounts managers, an auditor, fitness director and assistant director.

"I had to ask why I need all of those organizations at each base," he said. "Why can't I have one South Texas MWR (Morale, Welfare and Recreation) director and one back office? That doesn't mean I don't have staff at the fitness center at Ingleside. At the storefront level, there are still going to be people. There will still be a lifeguard at the pool in Kingsville."

Such moves have prompted the Navy to offer "voluntary separation and incentive pay" to its civilian workers, what in the business world would be called buyouts. In fiscal 2004 in Navy Region South, 91 chose such options, compared with nine in 2000.

Other ways to reduce personnel have come with technology, such as using pre-cooked food to eliminate the need for sailors in the chow line, or designing ships with no-wax floors so they don't require constant buffing, he said.

Positive result

Messbarger said one positive result of Navy cutbacks has been more contracting opportunities for local businesses.

"I can remember a day when you drove onto the base in Kingsville and had sailors mowing the grass, Seabees doing plumbing repairs, maintenance on the base and most of the other responsibilities. Today, so much of that is contracted out and small businesses can do some of those things.

"They've reduced the number of personnel, so the community loses those jobs, but small businesses gain business opportunities."

As chairman of the South Texas Military Facilities Task Force, Loyd Neal is fighting to save Navy jobs and get Naval Station Ingleside off the base closure list.

"It's a lose-lose situation for us as they continue to draw down the number of vessels, the number of personnel, naval air training and mine warfare," he said. "The Chief of Naval Operations (Clark) is looking at this whole thing and saying, 'I have to have this much money to run the Navy, how am I going to get it?' It's a tough call."


Copyright 2005, Texas Scripps Newspapers, L.P.