Amid delays, new Electric Boat subs set pace for General Dynamics

On the heels of a government audit that illuminated early delays in the construction of a new submarine class at its Electric Boat shipyard in Groton, the CEO of General Dynamics said that she expects the program to be left unscathed by any military budget revisions the Biden administration might seek.

Electric Boat is Connecticut’s largest private-sector employer with more than 12,000 workers at last report at its Groton shipyard and a New London facility, and about 4,000 more at two plants in Rhode Island.

The Rhode Island facilities saw a burst of hiring of late after the award last November of a $9.5 billion contract to build the Columbia ballistic missile submarine and a second vessel in the Columbia class that will include a dozen in all if Congress delivers on the Department of Defense’s wishes. The new submarines will replace the U.S. Navy’s existing fleet of 14 Ohio-class ballistic missile boats built over two decades beginning in 1976.

During the campaign, President Biden pledged to maintain U.S. military superiority with an emphasis on drones and artificial intelligence, with the Pentagon not expected to release its next budget request before March. New Secretary of Defense Lloyd Austin is a former U.S. Army general.

General Dynamics recorded profits of $3.2 billion last year on revenue of $37.9 billion. The company has an order backlog of nearly $135 billion it expects to deliver over several years.

On Wednesday, CEO Phebe Novakovic highlighted the Columbia contract amid the continuing impact of the pandemic. The Marine Systems division that includes Electric Boat led all General Dynamics units for growth last year, with revenue up 9 percent to just short of $10 billion.

The two Columbia subs were more than double the size of the next biggest order booked by General Dynamics in the final three months of the year, a $4.4 billion contract to move Department of Defense applications and data to the cloud for remote access using the Microsoft 365 platform.

“If you look at the U.S. Navy, submarines are its top priority — and the Columbia in particular,” Novakovic said Wednesday. “I am quite confident, … given my belief that the defense budget is driven by the threat, that key elements of our marine group growth will be nicely supported.

“It’s the height of hubris to assume that any organization is immune from constraints in budget,” she added. “But performance matters. … When I look across our portfolio, I’m pretty comfortable that we are in very good stead.”

In mid-January, the Government Accountability Office published a public version of a report it issued in November faulting what GAO auditors described as “persistent problems” with new software Electric Boat is using to design the Columbia-class subs, leading to delays in delivering missile tubes and other components.

The same report noted the relative inexperience of some managers and workers on the Columbia program on the heels of a hiring boom, after visits to Electric Boat’s facility in Quonset Point, R.I. and the Newport News Shipbuilding plant in Virginia operated by Huntington Ingalls Industries, which will ship several sections of the Columbia subs to Groton on barges for final assembly.

GAO predicted that Congress will likely have to approve additional funding to complete the first two subs, with DOD targeting 2030 for Columbia’s first patrol.

In a statement forwarded by a General Dynamics spokesperson, the company indicated that the report was based on a “snapshot” from an investigation more than a year ago.

“While we faced early challenges with our design tool, those have been resolved over the past year,” the statement reads. “Our progress in design products has allowed us to aggressively procure materials needed to support the construction schedule. The submarine enterprise, recognizing the generational material demand challenges associated with submarine construction in the coming decades, has been actively engaged in supplier development and readiness throughout the last several years.”; 203-842-2545; @casoulman

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