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programs. Mese commercial practices, combined with quantity

production would drive down the cost of naval ships.

The case paymentes tem S. operators would be deposited into

storleve Fun of DOD to defray the up-front

is y vitet Naisess. I'r contractual terms and conditions

Kur'N' POPLU TILLITRUE. Sadement of DOD would still apply

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Weerst VSP, wer its existing construct or MSP

MARY PU changes wouicpiace the Department of Defense at

they have I ren pou eers o cale whatever ship types those

I think the able to 20 - ruaries of their military utility.

da the case weathe HSP program was enacted in 1996,

Vitonnees have dem urcared that they plan to bring 5,000

Interns into a rathorze program. While TRANSCOM

aplication the mila e of such large containerships, they

will have no sal in the muner,

DOD has tenu metu saps that can enter a majority of the

sports, vather than use few that can handle extra large

ships. DOD has also wanted increased flexibility by having ships that

can transit the Panama Canal. Maybe TRANSCOM will determine that

it requires some very large ships, but TRANSCOM should at least have

a say in the decision.

DOD also requires car carriers, or Ro/Ro's. However, neither

Maersk nor Neptune Orient Lines, for example, own any Ro/Ro's

participating in the MSP program today.

TRANSCOM has a requirement for tankers. Yet, there are no

tankers in the MSP program.

The mix of ships that TRANSCOM needs, while still ensuring a

competitive commercial market for these ships, will be achieved under

the program we propose.

I recognize that there needs to be a balance between military

usefulness and commercial viability, because these ships will have to

compete in the international commercial shipping business in peacetime.

I am confident that this balance can be struck.

In closing, let me emphasize that our industry supports an

enhanced Maritime Security Program. We support a 20-year annual per

ship operating subsidy to offset the higher costs associated with U.S.

merchant mariners and doing business under the laws of the United

States. But a program that does not provide for a fleet of American-built

ships with military utility, under the ownership and control of America,

fails to meet the sovereign security requirements of the United States. A

program that lacks these critical elements cannot be called a Maritime

Security Program.

Will the program we propose increase the price? Yes. However,

95 percent of all military cargo and supplies for our forward deployed

troops will continue to have to go by sea. Given this indisputable fact,

this is a small price, which America can no longer ignore if the U.S.

needs a merchant marine and supporting shipbuilding industry.

Thank you.

The American Shipbuilding Association has received no grants

from nor contracts with the Federal Government during the past three

years, nor has it ever.

Mr. Vortmann's curriculum vitae is attached.

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Richard H. Vortmann
Vice President, General Dynamics and President,
National Steel and Shipbuilding Company (NASSCO)

Bad H Vortuan became a va prendent of Gexeral Dynanacs in Noversber: 993 te e copat 2ped liestal Str ad Shepherdanig Caspasy PNASSCO, based in San Diego, Cabfoma

Vanam, for the prva ten years, had been chairman, prendent and cháef executive officer of NASSCO, which was a tapaper met braneus prior to the acquisition

Vortman beyan bus career m 1969, serving in various financial managemeat and strategic plannag positons with Kasser Industrves Corporation, then part omer of NASSCO He joined NASSCO in 1976 as vice president of finance and information systems. He later served as the shipyard's vice president of production before becoming executive vice prendera of operation in 1980 He became president of NASSCO in 1984. From 1986 to 1988, he also served as Chairman of the Board of Emkey Development, a real estate development subsidiary of Morrison Knudsen Corporation, which was then NASSCO's parent company. From 1987 to 1988, he was a member of the board of Momson Knudsen. In 1988, he led the management-ESOP purchase of NASSCO.

Vortmann is currently Chairman of the American Shipbuilding Association, a council member of the American Bureau of Shipping, and the Chairman of the American delegation to the annual Japanese, European, Korean, United States Shipbuilding Conference. He currently is serving on the Mayor's Blue Ribbon Commit on City Finances. He previously served as chairman of the Shipbuilders Council of America and as a director of the Greater San Diego Chamber of Commerce.

Vortmann was born in San Francisco, California on April 11, 1944. He earned a bachelor's degree in finance in 1966 and a master's degree in business administration in 1967 from the University of California, Berkeley. He taught on the Business School faculty of his alma mater from 1967 to 1969.

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