Navy shipbuilder plans expansion to boost submarine production

Correction: An earlier version of this report mischaracterized HII's efforts to expand production.  

The nation’s largest shipbuilder wants to expand its manufacturing facilities this year to speed up and streamline production of nuclear submarines amid ongoing delays, ballooning costs, and labor woes. 

“We're expanding into Texas, Louisiana. We've expanded in Norfolk, Virginia. You see this expansion in South Carolina. We're going to where the labor is,” Christopher Kastner, Huntington Ingalls Industries’ CEO, told reporters ahead of the Surface Navy Association’s annual meeting. For shipbuilders, “When there's not enough work, they pull everything in-house. When there's too much work, they start to outsource. So it's kind of a natural thing to do, to go where the labor is. Because shipyards, to some extent, there's a space constraint when you start to maximize the labor footprint, so you have to move it outside.”

Last year, Virginia-based HII announced it was buying a South Carolina-based W International manufacturing facility to build modules for submarines and aircraft carriers. The move is part of a larger expansion plan to increase capacity, which will likely be expensive but should increase production, Kastner said.

“We need to go where the labor is in order to increase throughput,” Kastner said. “I do believe we will increase throughput in 2025 and 2024 significantly. We need to do that while controlling costs. Because my focus in 2025 is to improve our cost and schedule performance on our shipbuilding programs very clearly, and we're doing that through increasing throughput and maintaining cost control across all of our programs.”

Submarine production has lagged in recent years, putting the Navy’s two major programs—the Virginia-class and Columbia-class—years behind schedule. One reason for that, Kastner said, is an “arthritic” supply chain that creates a backlog of extra work, resulting in longer timelines and higher costs to build and move parts. 

And the Navy’s shipbuilding production demands and costs overall are expected to increase significantly in the coming decades—about $40 billion a year, according to a Congressional Budget Office analysis. The Navy’s 2025 plan includes adding 94 ships to the existing 296 battle ships by 2054, including submarines, aircraft carriers, surface combatants, amphibious ships, combat logistics ships, and other support ships. Moreover, President-elect Donald Trump has vowed to increase ship production. 

HII wants all of its shipyards and facilities to adopt enterprise data and AI tools to keep programs on schedule and budget. 

“Your engineering, your planning, your supply chain, and your people all have to show up at exactly the right place at the right time in order to execute. And, when something changes, rerunning that to make sure that you are making or delivering ships as efficiently as you can,” Kastner said. Running all of that data through AI tools instead of sending it out for analysis will save time and improve decision making, he said. 

“If you have AI tools, you will have the visibility to make the correct decision, versus sending it to a group of people [for analysis], and then by the time you do the analysis and come back, the situation has changed again. So the speed of decision making across all of ship building will be improved, and I believe the quality of the decisions we make will be better.”