The Secretary of the Navy this week described some of the specific problems , like turbine generator deliveries, causing delays to Virginia-class (SSN) submarine production, but added that production is inching closer to 1.4 boats per year.
Whereas the Navy seeks to generally buy two SSNs per year, shipbuilders
General Dynamics Electric Boat [GD] and HII Newport News Shipbuilding [HII], have only been able to deliver between 1.2-1.3 vessels recently. Testifying before the Senate Armed Services Committee on Thursday, Navy Secretary Carlos Del Toro reiterated the reduction in shipbuilding in the U.S. since the 1980s was exacerbated by the COVID-19 pandemic as well as “enormous challenges that we have with regards to blue collar labor in this workforce.” The workforce issues become “the base denominator of it all.”
Within that context, Del Toro specifically said for the SSNs a prime delay issue is “the turbine generators that are being delivered by Northrop Grumman [NOC], that are significantly behind in addition to the quality assurance challenges that have been presented down in Norfolk Naval Shipyard, associated with the nose cones of those submarines…as well, that has led to significant delays.”
He said the nose cone and other issues particularly impacted the timeline of one of the newest submarines, with the USS New Jersey (SSN-796) delivered weeks ago “was delivered three years late.”
Del Toro also updated the senators that Virginia-class production has now reached “just slightly less than 1.4 now. So the investments that we have made in the shipbuilding industry, in the submarine industrial base, for example, are starting to finally pay off.”
However, he noted the six-month gap in Congress approving the FY ’24 government funding means many of the Navy’s industry investments only started to be allocated recently.
Notably, Del Toro said that given government investments in industry, he is “hopeful” that by 2028 to 2029 the Navy can deliver two SSNs per year and 2.33 when accounting for three to five sales to Australia under the AUKUS agreement.
The secretary also said beyond problems in construction, maintenance and workforce recruitment are also just less experience in the workforce, known as “greening of the workforce.”
“You could argue that years ago…we had 50-year-old supervisors working with 50-year-old naval engineers in the Navy. Today, it’s 35-year-olds working with each other, right? That has led to significant challenges with regards to quality assurance,” Del Toro said.
Relatedly, Del Toro reiterated the delays to the Constellation-class frigate is primarily a recruiting and retention problem for labor in Wisconsin.
He noted the Navy has already allocated $100 million to help the shipyard provide $5,000 bonuses if workers stay through the first year and another $5,000 if they stay throughout ship construction.
“So we’re doing everything that we possibly can to actually help industry and work with industry to get there.”
However, Del Toro repeated his criticism that too many defense contractors are sending funds on stock buybacks rather than directing that funding into internal investment.
“We have too many stock buyback plans that, as we’re investing $14 billion into industry, we’ve got billions of dollars going out the other side of the door to stockholders, so they got to focus more on the customer than just the stockholders as well, too.”