CEO: Electric Boat Could Double in Size in 6 Years
The Norwalk Hour
By: Alexander Soule
October 29, 2020
As Groton’s Electric Boat began construction of the first submarine in the U.S. Navy’s new Columbia ballistic-missile class, the CEO of parent company General Dynamics said Wednesday she anticipates the subsidiary doubling in size over the next half decade, a faster expansion than previous projections.
Electric Boat operates Connecticut’s single largest employment site in Groton where about 9,000 people work at the shipyard, with another 3,000 at an engineering center across the Thames River in New London.
Entering October, Electric Boat workers began construction of the first of two initial Columbia-class ballistic missile submarines, which the U.S. Navy has ordered to replace Ohio-class subs as they are retired from service. Electric Boat is the prime contractor for the program, with its Virginia rival Newport News Shipbuilding producing several sections of each sub to include bow, stern and sail superstructure assemblies. The Pentagon is paying $9.5 billion for the first two vessels in a fleet of a dozen.
During a Wednesday conference call, General Dynamics CEO Phebe Novakovic addressed the magnitude of the Columbia program, without providing a jobs context for her growth projections.
“The fact that 50 percent of our growth this year has been in Columbia I think is a nice indicator of what this is going to mean to us in the future,” Novakovic said. “Electric Boat’s ... size will double in the next five-to-six years. It’s already quite a large business and it will continue to grow. This is —as we’ve been talking about for some time — an enormous program of critical national importance.”
A General Dynamics spokesperson did not respond immediately Wednesday to a query on projected employment levels and timelines in Connecticut and Electric Boat facilities in Rhode Island, where another 4,000 employees work. As of Wednesday, Electric Boat listed nearly 150 open jobs in Groton excluding internships and another 25 in New London, with 425 openings in Kingstown, R.I.
The Groton shipyard is one of three operated by Reston, Va.-based General Dynamics, along with Bath Iron Works in Maine which builds destroyers, including the new Zumwalt class with a closer resemblance to a sub in profile; and NASSCO in San Diego, which focuses on cargo ships and tankers for the Military Sealift Command.
The Marine Systems division the three shipyards comprise has been the top performer for General Dynamics this year. In the third quarter, with revenue up 8 percent in the third quarter to $2.4 billion, amid disruptions caused by the COVID-19 pandemic.
Operating profits gained 7 percent to $223 million, despite Bath Iron Works’ production schedule stalling this summer after some 4,300 workers went on strike for two months.
In response to an analyst’s question Wednesday morning on “whispers” in the industry on Navy interest in a new raft of Virginia-class submarine orders, Novakovic did not dismiss the possibility while remaining vague on the implications for Electric Boat.
Only last December, the Department of Defense announced a $22 billion order for nine new Virginia-class subs, with the possibility for a tenth that could tack on nearly $2 billion more. This month, the Navy announced an additional $328 million contract to modernize Virginia-class subs that are the Navy’s workhorse for a wide range of missions.
“We’ve been talking to our Navy customer about the ability ... of the supply chain and the facility to ramp up production,” Novakovic said Wednesday. “As you can imagine we are developing plans to do that. ... At the moment we are not planning for that increase — but if the nation needs it, we’ll accommodate it.”
At $41 billion, the Marine Systems unit’s backlog of orders exceeds that for General Dynamics’ four other major units combined, which focus on information technology and security; mission systems for the military; armored vehicles; and Gulfstream business jets.
During the quarter, General Dynamics reported receiving $155 million from the Navy for studies on advanced nuclear reactors for the submarine fleet; and $115 million to refit the USS Hartford attack submarine.
With construction continuing this year on a new riverside submarine assembly facility and yard in Groton, General Dynamics has placed an order for an adjacent dry dock that will serve as a floating cradle for Columbia subs during construction and later maintenance. Bollinger will build the dry dock in Louisiana for delivery to Groton in 2024, with the structure measuring 618 feet long and 140 feet wide.
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