WASHINGTON — The Virginia-class submarine production line at Newport News Shipbuilding is now fully staffed, after taking a back seat to the preeminent Columbia-class submarine program for years.
A larger workforce is one of several factors that give the company confidence the remaining Block IV Virginia boats will be delivered on their new schedule. The vessels were bought at a pace of two a year and were meant to deliver at the same rate. However, they are only arriving at a rate of about 1.2 boats annually, several U.S. Navy officials recently said.
In fact, Newport News Shipbuilding and General Dynamics Electric Boat, which co-build all the submarines, did not deliver a single sub to the Navy from April 2020 to February 2022.
The boats were already behind schedule when the COVID-19 pandemic exacerbated the issue. As the two submarine construction yards — Newport News Shipbuilding in Virginia and Electric Boat in Connecticut — ramped up the size of their workforce in anticipation of a greater workload, they had to ensure the Columbia production line was fully staffed and remained on schedule.
Any shortfalls, then, fell on the Virginia program.
“We’re fully staffed on Block IV and Columbia, and we’re working very hard on execution there,” the CEO of HII, Chris Kastner, said Feb. 9 on an earnings call. He also acknowledged that Block IV experienced schedule and cost overruns, but said the company looks forward to delivering the remaining seven of 10 total Block IV boats, then moving onto the Block V contract.
The Block V deal, he added, will provide better profits for the company.
Since the two-year gap in deliveries, the Virginia-class submarine Oregon delivered in February 2022 and the Montana delivered in March. Newport News anticipates delivering the New Jersey sometime in 2023 and the Massachusetts in 2024.
Electric Boat, which conducts the final assembly and delivery of every other boat, missed an expected 2022 delivery of the Hyman G. Rickover, but is expected to finalize that boat this year.
During a Jan. 25 earnings call, General Dynamics CEO Phebe Novakovic said she has seen stabilization in the workforce at Electric Boat, after a significant number of highly experienced shipbuilders retired early in the pandemic and the company struggled to attract and retain younger workers.
Kastner said repeatedly during his call that he is optimistic about the future of the Virginia program. He referenced “stability showing up in the shipbuilding organizations, not only from a labor standpoint but also supply chain and inflation. It’s not back to pre-pandemic levels, but it’s definitely stabilized, and that’s what we need to execute.”
The supply chain is becoming more predictable, he added, and Newport News Shipbuilding is working with its vendors and the Navy to achieve the best possible schedules.
On inflation, he said the yard is happy to see it abating. The company has some insulation from inflation thanks to clauses in its contracts, but he explained that the firm has grappled with inflation in overhead costs, including rising insurance premiums, health care costs and other cross-program costs that the company did not anticipate in its budget projections.
On labor, Kastner said that “after hiring over 4,900 craft personnel in 2022, we expect a similar hiring rate in 2023 while at the same time improving our productivity, attendance and overtime together to drive performance.”
The company will add about 5,000 personnel this year across both Newport News Shipbuilding and Ingalls Shipbuilding in Mississippi, he said, and the hiring and attrition numbers have been looking increasingly healthy throughout 2022 and into January 2023.
This has and will continue to translate to better cost and schedule performance on the ships and submarines the yards build, Kastner added.
“I’m proud to say we met all the shipbuilding milestones that we highlighted back in the second quarter of last year for 2022, and we are maintaining all of the 2023 milestones. This demonstrates growing confidence in our ship schedules and provides a solid platform to continue to improve our cost performance,” he said.
Megan Eckstein is the naval warfare reporter at Defense News. She has covered military news since 2009, with a focus on U.S. Navy and Marine Corps operations, acquisition programs and budgets. She has reported from four geographic fleets and is happiest when she’s filing stories from a ship. Megan is a University of Maryland alumna.
