BWX Technologies [BWXT] is now about halfway through repairing 12 submarine missile tubes it welded incorrectly in 2018, Rex Geveden, president and chief executive officer of the Lynchburg, Va., nuclear-hardware and fuel provider told investors Tuesday.

Under multiple subcontract to

Columbia– and Virginia-class submarine prime General Dynamics [GD] Electric Boat, BWXT is on the hook to deliver tubes through 2021. In the wake of last years’ gaffe, disclosed in the 2018 second quarter and costing BWXT’s $30 million, the contract is no longer profitable.

Geveden, on Tuesday’s 2019 second-quarter conference call, said BWXT has not gotten new orders for missile tubes since last year’s bad welds. He also repeated the company’s stance that BWXT will exit the tubes business if future contracts do not include “favorable terms so that we could be profitable.”

Geveden said the company is having “discussions” with its customers about future tubes work, and that “the ultimate client,” Naval Sea Systems Command, “would like to have more than one domestic supplier, at least on the Common Missile Compartment Tubes.”

Geveden has attributed the bad tube welds to the difficulty of the work rather than BWXT’s workforce. The company’s Nuclear Operations Group, the largest of its three operating segments, makes tubes at a factory in Mount Vernon, Ind.

If its customers won’t let BWXT stay in the tubes business on its own terms, the company will cease using Building 219 at Mount Vernon for tube work and instead manufacture naval nuclear reactor components there, Geveden said.

BWXT is already working near capacity on Navy programs at its Mount Vernon and Barberton, Ohio, factories. The company is running mandatory overtime at the factories to finish work on reactors for the Virginia and Columbia submarines, plus Ford-class aircraft carriers, Geveden said Tuesday. The company plans to expand its manufacturing footprint, and letting Building 219 take over reactors work — rather than acquiring new factory space — would save about $10 million Geveden said.

The Navy is ordering 12 Columbia-class submarines, which under the service’s current plan will start replacing 14 aging Ohio-class ballistic missile submarines by 2031. Both vessels will carry Trident II-D5 missiles tipped with W76-2 and W88 warheads supplied by the Department of Energy’s National Nuclear Security Administration.

The sub-launched, high-yield missiles can destroy entire cities and military installations and are virtually undetectable until launched. The Pentagon relies on that stealth and destructive potential to make nuclear-armed adversaries think twice about a nuclear first-strike on U.S. territory.

BWXT has a virtual monopoly on naval nuclear reactor construction and this year expects the Navy and the NNSA — which is responsible for the civilian-run work of the Naval Nuclear Laboratory — to award it some $2 billion in reactor-component and fuel-processing contracts.