[...] fast (50-plus knots) aluminum-hulled, wave-piercing catamarans, [the Joint High Speed Vehicle has] already proved its utility [...] [Equipped with] a certified flight deck for landing manned helicopters and a state-of-the-art C4I suite [...] the JHSV will be the critical logistics link that will tie together the riverine, green-water, and littoral elements of the Influence Squadron.
In his seminal 2010 paper "More Henderson, Less Bonds," then-Commander Henry Hendrix (later Captain Hendrix, Director of Naval History) argued that the U.S. Navy needed to spend less money on Barry Bonds-like supercarriers such as the new USS Gerald R. Ford.
Why? While inarguably a powerful weapons platform, one single aircraft carrier simply can't be in two places at once, limiting its utility in quelling the kinds of low-intensity conflicts that are breaking out around the globe.
Instead of spending $14 billion a pop on individual supercarriers, argued Hendrix, the Navy in the 21st Century should spend its money buying cheaper, multi-role Joint High Speed Vehicles -- and buy them in bulk. Now, it appears, the Navy may be coming around to that point of view.
According to Hendrix, the same money that can buy the U.S. Navy one single supercarrier could buy approximately 100 Joint High Speed Vehicles at roughly $140 million apiece. (Prices have begun dropping below $160 million per ship -- so Hendrix's estimate appears to be in the ballpark.) The counterargument, of course, is that a 306-ship Navy may not want to devote one-third of its fleet to fast transport vessels.
But what about one-sixth?
As reported last week by DoDBuzz, the U.S. Navy is currently weighing plans to establish a fleet of anywhere from 33 to 50 "amphibious assault ships," a category of warship that, broadly defined, would include the JHSV, as well as landing platform docks (LPDs)...
...and also landing helicopter assault ships -- "mini-aircraft carriers" like the USS America:
Initially envisioned as a high-speed transport vessel, DoDBuzz notes:
the JHSV is showing a broader range of applications such as logistical support, counter-trafficking and medical operations in support of larger platforms such as amphibious assault ships.
Not coincidentally, these are many of the same missions Hendrix advocated using the Joint High Speed Vessel for in his 2010 paper. What's more, the JHSV's ability to carry Seahawk medium helicopters, and even Sikorsky's new CH-53K King Stallion heavy lift carrier, suggests the vessel could fulfill the role of amphibious assault ship, as well as fast cargo carriers.
Add in the fact that the Navy has chosen the JHSV to serve as test bed in firings of its new "Mach 7 cannon" -- the experimental electromagnetic railgun -- and JHSVs might even take on a combat role in future conflicts.
All of this suggests the potential for JHSVs to grow in size from a planned fleet of 10, to 20 -- or even 33 or 50 -- is real.
What it means to investors
Already, the Navy has placed orders for Australian shipbuilder Austal (NASDAQOTH:AUTLY) and its U.S. subcontractor General Dynamics (NYSE:GD) to supply it with at least 10 Joint High Speed Vessels. Austal says the contract is "potentially worth over US$1.6 billion."
Further expansion of the fleet up to a maximum of 50 ships would therefore imply an $8 billion market opportunity if prices remain at the $160 million-level -- $7 billion if Hendrix's prediction of a price drop to $140 million happens.
Granted, a five-fold expansion of the Navy's current buying plans sounds... "optimistic" to say the least. But with 10 shipbuilding contracts in the bag already, and the Navy at least talking about growing that number, the potential for multiple billions of additional defense dollars going to Austal and General Dynamics should not be discounted.
Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 327 out of more than 75,000 rated members.
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