The U.S. military’s largest shipbuilder reported increased production in 2025, but said submarine-building schedules could slip if the Navy doesn’t award new contracts by midyear.
“One thing I know for sure, the Navy is going to buy submarines. So we need to get it done before the first half of the year, so we can maintain the production schedules and make sure that is not a risk that we have to deal with,” HII CEO Christopher Kastner said Thursday during the company’s earnings call.
The company has been negotiating with the Navy and General Dynamics Electric Boat on multiyear deals for 10 Virginia-class Block VI attack boats and for the next five Columbia-class submarines, but timing is uncertain.
“We need it before the end of the first half of the year in order to maintain our production schedules, but it’s just hard to say,” Kastner said. “And I think we will get it done. And as I said previously, the ’26 budget getting done and then clarity around what’s going to happen in ’27 and the [Future Years Defense Program], I think, really helps. And after that falls into place, we can get those contracts behind us.”
In 2025, HII improved shipyard productivity by 14 percent; this year, it is aiming for a 15-percent increase, Kastner said.
It also hopes to hire even more workers than the 6,600 it brought on last year, he said.
Kastner’s comments come as U.S. shipbuilding demands—and budgets—rise with existing and new programs and the Trump administration pressures builders to move quickly.
Electric Boat also reported a productivity increase: 13 percent more submarine tonnage, Danny Deep, General Dynamics president, said during the company’s Jan. 28 earnings call.
“At Bath Iron Works, we are seeing consistent ship-over-ship learning. And at NASSCO, we are seeing a very positive trend in terms of schedule variances against plan for each successive ship we build,” Deep said. “Our priority in the Marine Group is to remain laser-focused on execution and continue to accelerate production, and we are seeing good progress on that front.”
But there are still supply-chain concerns, General Dynamics CEO Phebe Novakovic said on the call.
“We are continuing to improve efficiency, retention at Electric Boat. Our throughput, as you know, is up and proficiency is really key, as is retention. The supply chain remains the gating item. And we have seen significant improvement in some areas, but we still have some suppliers and parts of the supply chain that are at risk,” Novakovic said. “The government has been heavily investing in the supply chain, which is why we’ve seen some improvement, but we need to focus and do more, particularly with respect to sole-source suppliers where there are bottlenecks.”
Read the full article here
