A top US Navy shipbuilder says the problem isn't that the industry doesn't know how to build warships

• A top shipbuilding executive said industry can build warships but isn’t getting clear signals.

• Many big US Navy shipbuilding programs are delayed and over budget.

• Navy officials and shipbuilders have attributed the US’ shipbuilding issues to both long-term and short-term problems.

A senior Huntington Ingalls Industries executive said the US Navy’s mounting shipbuilding problems aren’t because shipbuilders don’t know what they’re doing.

Instead, he pointed toward inconsistent demand and workforce issues that have drastically affected industry’s capacity. Navy officials and analysts have raised some of these concerns as well.

Earlier this week, Tom Moore, senior vice president of government relations for major shipbuilder HII, addressed the widespread challenges facing the US Navy’s top warship programs. HII builds Arleigh Burke-class destroyers, amphibious warships, and Ford-class aircraft carriers, among other vessels. Moore outlined how, historically, shipbuilders had delivered high numbers of vessels to the Navy and why that capability has decreased.

“Industry knows how to build ships at scale,” he said, but when the demand went down after the Cold War, “we turned the spigot off, and we stopped demanding ships.” The workforce shrank, and US industrial capacity dropped as the industry was hollowed out.

Experienced shipbuilders left for other work, backfilled by newer employees. Moore pointed to data showing that in the mid-1990s, the average electrical supervisor at Newport News and Ingalls Shipbuilding had been in the job for over 20 years. “Today, the average electronic supervisor has been there four-and-a-half years,” he said. That’s a lot of lost experience.

When looking into US shipbuilding challenges, industry insiders and analysts have also pointed to the Navy’s inconsistent demand signals, which can involve ordering ships and then changing the order or scrapping planned programs altogether.

This is seen as a major problem for contractors, leaving industry partners in uncertain positions.

Broader economic issues, such as inflation, the lingering effects of the COVID-19 pandemic, and competition for talent have exacerbated the problems affecting the industry.

The US Navy spends roughly $40 billion annually on shipbuilding projects, yet these projects are regularly behind schedule and battling rising costs.

Last year, a Department of the Navy review found that top programs, such as Block IV Virginia-class attack submarines, the Pentagon’s priority Columbia-class ballistic missile submarine, the Constellation-class guided-missile frigate, and the next Ford-class carrier, were all severely delayed and over budget due to COVID’s impact on the workforce and supply chain, “with industry reticent to invest.”

The US Government Accountability Office said previously it had observed consistent issues, too, with the Navy’s cost estimates, which “are often lacking and the assumptions unrealistic.”

The Navy did not have new comments to share on shipbuilding problems at the time of publishing, pointing Business Insider instead to past remarks by service leaders. Previously, the Navy has often put the burden on industry, but it’s a complex process.

Coming budget shifts within the Department of Defense amid changing priorities for a new administration may further impact the industry, though the plans remain unclear for the time being.

At a Hudson Institute event on Tuesday, HII’s Moore highlighted potential solutions to the US shipbuilding problems, including a near-term reconditioning of the wide-ranging technical expertise and capabilities across the US military’s industrial partners, recruiting employees with competitive pay, a long-term and consistent demand signal from the Navy about the warships it needs, and greater cost realism in contracting.

These ideas are not necessarily new when it comes to how to start addressing the US Navy’s shipbuilding woes. Shipbuilders have noted the challenges of adjusting schedules to the Navy’s demands.

The Navy has previously caused delays by overloading new projects with increasingly advanced technologies, putting strains on shipbuilding, such as when a host of new technologies bogged down the delivery and raised the cost of the first-in-class aircraft carrier USS Gerald R. Ford. President Donald Trump recently criticized this aircraft carrier in a discussion of government waste.

Many of the concerns surrounding the building of more vessels and maintaining and repairing the existing fleet have been aggravated by the rise of China’s shipbuilding empire. With a clear national investment in its naval forces and blurred lines between its commercial and military shipbuilding, China has become the largest navy in the world and the largest shipbuilder by capacity.

The possibility of a conflict with China, such as a possible Taiwan contingency, has increased anxiety that the US Navy doesn’t have enough ships or ways to repair them after battle damage. The US has a more capable fighting force, but these issues are critical in naval warfare.

Although the shipbuilding process faces deep-seated issues, “the Navy builds the most powerful and capable warships on the planet in the US with American workers,” a GAO official said last fall.

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