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Austal’s shipyard in Mobile, Alabama. (Photo courtesy of Austal USA.)
MOBILE, Ala. — Three years ago, one of the warehouse-like buildings where ships are constructed on Austal USA’s Alabama campus was so barren “you could play a soccer match” inside it, according to a company executive. The threat of having to lay off hundreds of workers was real, and the atmosphere was “depressing.”
Today, the shipbuilder, known largely for its history with the Littoral Combat Ship program, is dealing with a very different problem: Playing an oversized game of Tetris in that warehouse with a massive rescue and salvage ship and several smaller landing craft utility vessels. Meanwhile, executives are organizing a hiring spree for up to 1,200 new workers.
It’s a dramatic change of course and reflects the significant transition Austal USA has taken on stemming from its 2020 play to invest in a steel shipbuilding line, a sharp departure from the aluminum ships that have been the foundation of its reputation.
Having racked up several big Pentagon contracts since then, the firm is faced with the growing pains of re-organizing its facilities that were optimized for producing just two ship classes to being suitable for managing projects across five different shipbuilding offices from both the Navy and Coast Guard.
Inside the shipyard, Austal is working simultaneously “to build parts of aircraft carriers, to build submarines, to build [surface] combatants, to build auxiliary [ships], to build unmanned ships,” Larry Ryder, vice president of business development, told Breaking Defense during a tour of the shipyard earlier this month. “There’s no other yard that has that portfolio, especially within one yard, so it’s a unique evolution.”
To the untrained, the cacophony of construction sounds and numerous workstations scattered about the floor could seem chaotic. But the chaos is at least the short-term price to pay for a shipyard grappling with its expanding role in the Navy’s industrial base.
“We have to reorganize the company,” he added. “The company that manages two very mature programs is a different structure than [one] managing the number of customers” Austal will handle moving forward.
Submersed In The Sub Industrial Base
Nowhere was the contrast between past and future clearer than the building that right now rather awkwardly houses Austal’s submarine component construction before a brand new facility dedicated to sub construction can be built.
During the tour of the current cavernous space, walls were lined with makeshift office spaces stacked vertically that can be used for administrative tasks or as rest areas for the crews. When a larger ship is under construction here, the verticality allows for walkways to be erected on either side so that no matter where a shipbuilder is working on the vessel, they can walk straight from the office out to that work location. But the initial structures of a much more compact submarine fail to fill the space in the same way an LCS might, making it seem much more out of place.
What sat in Austal’s facilities also hardly resembled a completed submarine — numerous pieces of steel welded together to form the outlines of a hallway and rooms, with electrical wires hanging out in odd places — but nevertheless, a shift supervisor easily points out the space where the commanding officer’s quarters will be once the boat is complete, among other nooks and crannies.
Working with the Navy and submarine prime contractor General Dynamics Electric Boat, Austal in late 2022 became a subcontractor for both the Virginia- and Columbia-class submarines. Their share of the program is limited to less sensitive areas of the boat — they don’t deal with nuclear reactors or any parts of the hull that are subjected to the ocean’s immense atmospheric pressure — but the deal has provided Austal with a new avenue of work and given Electric Boat extra capacity as it tries to meet the Navy’s demands to support the AUKUS trilateral security pact.
RELATED: Known for LCS, Alabama-based Austal USA Starts Submarine Work
Most of the work crew here are Austal employees, but interspersed with them are supervisors from Electric Boat. The supervisor leading the tour said (and Ryder later agreed) the process of training craftsmen, accustomed to building aluminum surface ships, to work on submarines has been more challenging than either company anticipated.
Submarine construction in many ways is a different beast than surface ships. The rules for construction processes, the sensitivity of information and even screening the people who do the work are all unique. Those differences, as well as physical capacity limitations, are driving Austal to invest $300 million to build a new facility that will be devoted strictly to submarine construction.
Ryder said the team from GDEB is only in Alabama temporarily while Austal cuts its teeth on its first submarines, but the company’s commitment to being part of the submarine industrial base and working with GDEB is a “very long-term, very strategic partnership.”
“That’s just part of our change in strategy as a company,” he said. By that, he’s referring to the fact Austal wasn’t always interested in work supporting other shipyards. Ryder was reluctant to elaborate on what drove that line of thinking but acknowledged that reversing course was “good for business.”
A Premium on Space
Prior to 2020, the shipbuilder relied primarily upon the Independence-class Littoral Combat Ship and the Spearhead-class Expeditionary Fast Transport (EPF) ships to sustain operations.
Earlier this month, the final two LCS could be seen in the water, both nearing completion and their inevitable crew sail-away dates. During the tour, an EPF towered inside one of the module construction buildings as it was preparing for the moment it too would launch into the Mobile River. This ship, the USNS Point Loma, was christened, the ceremonial milestone where the Navy and contractor gather to officially grant the ship its name, just days after Breaking Defense visited Austal USA.
But elsewhere in the yard, a building once packed with panels destined for LCS was being filled with materials for a new floating dry dock. And on just the other side of an adjacent wall, Saildrone unmanned surface vessels, developed by the eponymous company, were being built. Not far from those USVs, workers were focused on the aluminum elevators that will one day move aircraft onboard the Navy’s future Gerald Ford aircraft carriers.
Ryder said in addition to the new facility for submarine construction, Austal is also planning a second module construction facility, to accommodate construction for the Coast Guard’s Offshore Patrol Cutter and the Navy’s ocean surveillance vessel.
And much like the other Navy shipbuilders who missed out on the Constellation-class frigate the first time around, Austal isn’t shy about talking up its interest in the prospects of becoming the second yard building new frigates. The idea of a second shipyard building frigates is something both Navy officials and members of Congress have publicly mused for years since first tapping Fincantieri Marinette Marine in 2020. But the Pentagon remains coy on when that selection process will move forward — if at all.
When asked about Austal’s capacity to build a frigate, given everything else happening in the shipyard today, Ryder acknowledged the shipyard, at least in its current state, would be faced with the unpleasant idea of letting that contract go.
“I hate saying ‘no’ because we don’t have capacity, but I think once we get [the new facilities] built and these programs up and running, I think we’ll be in a good place,” he said. “And we’ll be ready to… do some more expansion if we have to.”
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