By Troy Turner
Navy officials say 3,000 new jobs could be created in the Mobile region over the next four years as the U.S. Navy looks to nearly double submarine production by 2028, and major changes are in store for Austal USA and Alabama Shipyard, both located inside the Port of Mobile.
Meanwhile, General Dynamics Electric Boat awarded Austal USA a $450 million contract for the expansion of production capacity in support of the U.S. Navy submarine industrial base.
The contract will enable Austal USA to expand infrastructure in its Mobile shipyard to support the U.S. Navy goal of annually delivering one Columbia-class and two Virginia-class submarines.
DOD announcement
The Department of Defense and other defense officials announced Friday (Sept. 20) that Austal USA has earned a $152 million contract to develop and help produce the submarine modules that will be used in expanding the fleet.
The contract work will include a cooperative effort that involves the DOD, U.S. Navy and private enterprise such as the United Submarine Alliance Qualified Opportunity Fund, meaning the Navy and private capital will finance the work, which will result in significant changes to the property now occupied by Austal USA and portions of Alabama Shipyard, the latter of which is being acquired in the new investment. Austal is playing a leadership role in the deal (details below).
New buildings will be constructed, and groundbreakings for new buildings are being planned for 2025, which will show footprints for what’s to come, officials said, and construction will be well under way by 2026.
Alabama Shipyard will continue its work of serving and maintenance of Navy ships as it does now, staying on site as a tenant, officials explained in a hastily called Friday afternoon press call with invited reporters.
Matthew Sermon, executive director, Program Executive Office/Strategic Submarines for the Naval Sea Systems Command, told AlaDefense.com that the 3,000 newly created direct and indirect jobs expected include a range of needs from construction workers to additional shipbuilders.
Making the rounds
The announcement comes on the heels of a Sept. 6 visit to Mobile by Secretary of the Navy Carlos Del Toro and Michigan Gov. Gretchen Whitmer who, along with Alabama Congressman Jerry Carl, were among the speakers on stage to help Austal USA celebrate the beginning of construction on the Expeditionary Fast Transport series-finale vessel, the future USNS Lansing.
“This ship highlights the success and importance of our Maritime Statecraft initiative, encompassing a national, whole-of-government effort to restore the comprehensive maritime power of our nation,” said Del Toro, who praised the Alabama shipyard workers at Austal.
Sermon and other officials in making Friday’s announcement said they already have been meeting with education and administration officials at local community colleges, along with others in labor-skills training, to evaluate and plan for the future expansion of the workforce expected.
Terms of the contract call for Austal USA LLC to be awarded “a $151,999,986 contract to support continued expansion of Submarine Industrial Base capability and capacity. Work will be performed in Mobile, Alabama, and is expected to be completed by September 2026.”
Fiscal 2024 National Sea Base Deterrence funds in the amount of almost $152 million were obligated at time of award and will not expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting agency.
“The Navy is proud to announce a groundbreaking co-investment collaboration to bolster U.S. maritime dominance and national security,” the DOD said in a press statement released soon after Friday’s call.
The DOD statement in full:
In order to meet submarine production requirements, and in support of Navy Secretary Carlos Del Toro’s Maritime Statecraft initiative, the Navy and its submarine industrial base partners are committed to rebuilding a manufacturing base that has shrunk to just one-third of its capacity from 30 years ago.
As part of this challenge, submarine production must nearly double, requiring an additional 3.5 to 4.5 million submarine module production and outfitting hours annually. This partnership will play a key role in ensuring submarine shipbuilders can meet the Navy’s required sustained submarine construction cadence for the Columbia Class and Virginia Class submarine programs.
A key element of this initiative is to incentivize private investment in the expansion of domestic shipyard capacity for submarine module manufacturing, including through an investment by Austal USA, LLC (Austal USA) in the qualified opportunity fund acquiring and developing Alabama Shipyard in Mobile, Alabama.
This Gulf Coast site, with its deep-water port, advanced facilities, and proximity to significant infrastructure and a skilled workforce, is ideally suited for expanding industrial base capacity. Positioned next to Austal USA, an existing U.S. Navy shipbuilding contractor, the Alabama Shipyard will support the production of Columbia Class and Virginia Class submarine modules, as well as additive manufacturing and training.
“Today’s announcement underscores our commitment to finding innovative and creative solutions to accelerate submarine production and is emblematic of my Maritime Statecraft initiative that seeks to incentivize expansion of our national shipbuilding capacity by engaging new, forward-leaning stakeholders and leveraging the power of public and private investment,” said Secretary of the Navy Carlos Del Toro. “This announcement answers my call for investment into small-to-medium size shipyards, both active and dormant, that were previously the backbone of our Nation’s maritime power, and I look forward to continuing to work with industry on future initiatives to strengthen our maritime industrial base.”
To finance this ambitious development, the United Submarine Alliance (USA), Qualified Opportunity Fund LP (the USA Fund) has acquired the assets of the 355-acre Alabama Shipyard, where it will prioritize U.S. Navy maritime infrastructure investments and sustainment activities with the goal of developing an additional 75 percent of the site to support submarine production, workforce training, and industrial capacity, including facilities aimed at serving unemployed and underserved communities.
These efforts will significantly boost the capacity of the submarine industrial base while enhancing workforce training, recruitment, and retention across the entire Gulf Coast.
The agreement includes contractual mechanisms that support Navy oversight and authorities to safeguard Navy and national security interests. The project is expected to create approximately 3,000 new, sustainable jobs while preserving all current employment at the shipyard.
By revitalizing infrastructure supporting the maritime industrial base to enable increased production capacity, the Alabama Shipyard investment supports the U.S. Navy’s continued maritime dominance, enhances strategic deterrence, and protects the nation’s interests well into the future.
UPDATE:
The following is a related press statement released Monday, Sept. 23, by Austal USA:
Austal USA has been awarded a $450 million contract by General Dynamics Electric Boat for the expansion of production capacity in support of the U.S. Navy submarine industrial base (SIB). This award will enable Austal USA to expand infrastructure in its Mobile, Ala. shipyard to support the U.S. Navy goal of delivering one Columbia-class and two Virginia-class submarines annually.
The award provides funding for Austal USA to design, build, and outfit a new module fabrication and outfitting facility in its Mobile shipyard. Construction of the new building will start this fall and be complete in 2026. When fully operational, the building will support approximately 1,000 new jobs at Austal USA and provide capability to fabricate, outfit, and transport submarine components.
This award follows the July 2024 groundbreaking for a 192,000-square-foot final new assembly bay designed to support construction of large steel ships for the U.S. Navy and U.S. Coast Guard. Together, these projects represent over $700 million in facility expansion in the Mobile shipyard. When both projects are operational they will bring 2,000 new jobs to the region.
“This contract award further solidifies Austal USA’s strong industrial partnership with General Dynamics Electric Boat to increase capacity in the submarine industrial base,” stated Austal USA President Michelle Kruger. “I’m proud of how the Austal USA team has responded to the call to accelerate production of Columbia and Virginia-class submarines, which is critical to our Nation’s defense.”
The construction of these two buildings continues Austal USA’s transformation into a shipyard with a diverse and sustainable portfolio. The projects increase capacity and capability enabling Austal USA to support a wider range of customer requirements.
“This award represents another significant milestone in the transformation of our Mobile facility to meet the diverse needs of our Navy and Coast Guard customers,” commented Larry Ryder, Austal USA Vice President of Business Development and External Affairs. “Since we broke ground for our steel panel line in 2021 we have continuously worked to grow the capacity and capability of our Mobile shipyard leveraging our highly skilled workforce.”
The new submarine manufacturing building will provide 369,600 square feet of production capacity on 8.5 acres, significantly expanding the current submarine module manufacturing capacity in the Mobile facility. The building will be designed and built to leverage Industry 4.0 technologies, including extended reality, cloud computing, horizontal and vertical integration, big data analysis, autonomous robots, and simulation with a digital twin. The project will include a material storage area, machine shop, and assembly area and waterfront improvements to support the transport of complete modules by barge.
Troy Turner is the editor and senior consultant for AlaDefense.com. He can be contacted at [email protected].
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