Pandemic Isn’t Slowing Down Columbia-Class Submarine Construction
By: Ben Werner
April 29, 2020
General Dynamics Electric Boat remains ready to start construction of the first Columbia-class ballistic missile submarine in October, company officials announced Wednesday.
To date, Electric Boat’s preparations to start building the first of 12 planned Columbia-class boomers, along with work at the yard building the Virginia-class fast attack submarines, has not experienced significant delays due to COVID-19, Phebe Novakovic, the chief executive of General Dynamics, told analysts during a Wednesday conference discussing the company’s first-quarter financial results.
“The performance was good and particularly solid at Electric Boat,” Novakovic said. “We’ve also increased our advanced construction on the first Columbia as we approach the planned construction date in October of this year.”
During the first three months of 2020, General Dynamics posted earnings of $706 million and sales of $8.75 billion, decreases from the $1 billion earnings and $9.26 billion in sales reported a year ago. Problems with General Dynamics’ Gulfstream business was the primary cause for earnings and sales to decrease from a year ago, Novakovic said. Gulfstream has completed building jets popular with corporate travelers but hasn’t been able to deliver the aircraft because of COVID-19-related travel restrictions. Customers haven’t paid for the jets that are currently parked outside the Savannah, Ga., production facility.
Meanwhile, work building the Virginia-class Block V attack submarines continues ramping up and now represents a third of Electric Boat’s Virginia-class revenues, Novakovic said. In December, after months of negotiations, the Navy awarded a $22.2-billion contract to Electric Boat and Huntington Ingalls Industries’ Newport News Shipbuilding for nine Block V submarines.
The Columbia-class program is considered a critical leg of the nation’s nuclear triad and component of the National Defense Strategy. Navy and Pentagon leadership had worried Electric Boat would have trouble starting Columbia-class work while continuing to build Virginia-class submarines. Workflow concerns at Electric Boat were among the sticking points during the protracted Block V negotiations between Navy and Electric Boat.
The Navy plans to buy 12 Columbia-class submarines for an estimated $109 billion, according to a November Congressional Research Service report. The program will replace the Navy’s current force of 14 Ohio-class boomers, which are nearing the end of their expected lifespans.
To accommodate the increased work, General Dynamics spent $987 million company-wide upgrading its operations and expanding its workforce last year. A focus of this spending was ensuring Electric Boat could simultaneously build Columbia-class and Virginia-class submarines.
Now, as companies take measures to protect their workforces from catching and spreading COVID-19, Novakovic said the company is working to limit supply chain disruptions and work slowdowns. General Dynamics has pushed roughly $300 million to prop up its suppliers while they deal with business disruptions caused by COVID-19.
“Since the onset of the COVID-19 crisis, we have supported our government customers and implemented multiple safety measures to keep our people as safe as possible,” Novakovic said in a statement released before markets opened Wednesday. “We are responding to the COVID travel restrictions’ impact on Gulfstream and are managing our costs throughout our business.”
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