business has way too much power...imho ALL private businesses should be nationalized and the profits turned over the national treasury

You realize that public shipyard workers are not contractors right? And only the repair yards are exempt. All navy oversight personal at construction yards are getting furloughed.

All navy oversight personal at construction yards are getting furloughed. It's a bit reminiscent of "Military Daycare" mentioned in the OP; with too little oversight.

(Naval Inventory Control Point), who then sells them to different activities to replace broken or worn out parts. The money transferred from one Gov activity to another is then is used to order and stock more parts.

For new construction of ships, the shipbuilder orders the parts to military specifications and assembles the ship, which is then delivered to the Navy whole. As for oversight, that's a major problem with sequestration. The Navy spent a lot of effort to restaff it's Supervisors of Shipbuilding (SUPSHIPs) to keep cost down and stop quality problems. It has been successful recently, but sequestration may ruin that.

You appear to know a great deal more about these military production issues than me.

With China's recent escalation in military personnel and equipment - especially orbiting defense satellites - I wonder which super-power they intend to go to war against. Most electronic equipment sold in the U.S.A. these days is made in China?

Do U.S. Defense Contractors farm out production of electronic components they sell to the military and other DoD agencies to manufacturers in China?

The military is required to buy most items from domestic suppliers. A foreign company sometimes supplies components if they have skills or processes that domestic suppliers lack. Usually this is because we want a specific patented product.

same person the same question when they are employed in the private sector.

It's already started to a very small extent. It will grow in size over time. Canceling a contract outright can be expensive, most contracts have cancellation costs as part of them. So the government has a tendency to just let them expire instead (unless they have a very long time to go). So existing contracts are expiring and new ones are not being started, or they are for fractions of the previous value. That will result in lay offs of existing workers.

That is unless the budgets are adjusted, something the government hasn't done yet. The reason that the government is furloughing people instead of laying them off is they expect in the long run for the budget cuts to be replaced in some sense. So they don't want to cut staffs to only have to hire them back later. The contractors though are anticipating that even if the money is replaced, it won't be for exactly the same contracts, or industries, so they are cutting people now. If these cuts are sustained, you'll ultimately see the government employees cut, mostly through attrition.

Building five destroyers is a little bit different than other procurement items, like services or ammo.