Austal focuses on ship repair, supplying components while it awaits construction contracts – DefenseNews.com

NATIONAL HARBOR, Md. — Shipbuilder Austal USA is growing its ship-repair business and is serving as a component builder for other shipyards while trying to secure more contracts for its Alabama production line.

Last year, as Austal planned the April 2022 opening of its steel production line, it eyed several programs that could fill the line: new contracts for the U.S. Navy’s light amphibious warship, next-generation logistics ship and T-AGOS ocean surveillance ship; for the U.S. Coast Guard’s offshore patrol cutter undergoing a recompete; and for the Navy’s frigate program that was expected to involve a second shipyard to supplement Fincantieri’s work.

The light amphibious warship, or LAW, competition was pushed back to 2025, and the frigate opportunity is delayed indefinitely.

Austal in October won a $144 million contract to design and build two towing, salvage, and rescue ships, which its vice president of business development and external affairs, Larry Ryder, told Defense News in an April 6 interview would “prime the pump” as the first work on the steel production line. But Austal needed a way to bring stability to its nascent steel construction line and its aluminum production line, where work on the littoral combat ship is winding down and efforts for the Expeditionary Fast Transport program has been extended one or two ships at a time thanks to congressional additions to the budget.

“It’s not ideal that the programs may be shifting to the right,” Ryder said at the Navy League’s annual Sea-Air-Space conference. But he’s optimistic Austal will prove competitive in the contract-selection process, whenever the Navy is ready to launch a competition for them.

“We are working a design contract for the LAW program; I think we’ve got a great solution there. I think that ship lends itself to serial production — the Navy and Marine Corps, when they move down the path, they’re going to want to get ships out of there quickly to get that first regiment afloat. And I think the way we build ships, we’ll be able to do that faster than any other yard,” he said. “The frigate is obviously something we’re focused on. The steel line that we built is capable in design of building the frigate efficiently, so we’re ready for that. The Congress and the Navy need to come through when they’re going to start.”

Keeping busy

To keep the workforce busy while Austal awaits a more long-term and stable portfolio of work, the company is now a supplier on three nuclear shipbuilding programs, where the Navy and industry have recently struggled with an industrial base that’s strained to keep up with the growing workload.

Ryder said Austal will build aircraft elevators on its aluminum production line for the Ford-class carrier program at HII’s Newport News Shipbuilding yard in Virginia. The yard will also build components for the Columbia-class and Virginia-class submarines — for General Dynamics Electric Boat as the prime contractor and Newport News Shipbuilding as the secondary production yard. He could not disclose which submarine components the Mobile yard would build.

“Both of those programs are challenged from an industrial base perspective, so I think it’s a positive for those programs that we’re addressing a need, and it certainly helps us and helps stabilize the workforce,” Ryder said of working as a nuclear shipbuilding supplier. “There’s parts of the shipbuilding-industrial base that are at capacity and have labor shortages. We’re kind of the opposite right now: We have capacity and we have a high-quality workforce. So I think we’ve been working with the Navy and some of the other shipyards to say, ‘We can help here, especially in the near term.’ ”

The company is trying to sustain current workforce levels but also wants to grow its workforce in Mobile, Ryder explained. And the firm plans to build up its workforce in San Diego, California, now in order to support a new ship-repair facility undergoing construction just south of Naval Base San Diego.

The Navy has a growing number of ships on the San Diego waterfront and has lacked the ship-repair capacity to maintain them — specifically the dry docks for more intrusive work. The Navy began sending ships to ship-repair company Vigor’s dry docks in Oregon and Washington as one way of handling the growth in West Coast repair needs. But Austal saw an opportunity to add another dry dock to the San Diego waterfront when no one else had been able to figure out how to do so.

Ryder said the company bought the lease for land that abuts the south end of the naval station. Capital improvements will allow some topside ship maintenance to start within a few months, and a new 9,000-ton dry dock will arrive in 2023 to begin dry dock work next summer. The entire venture cost the company about $100 million.

“It was challenging. We spent over two years trying to complete the deal and looked at several sites — so this site is somewhat unique in that it uses some Navy land to fit the dry dock in there. We’re not putting a dock capable of docking the [destroyers], so we don’t have to go as deep, we don’t need as much draft and as much dredging, so that was part of it. But I think it was just the willingness of the Navy to work with an innovative solution and partnership on the use of the land and the waterborne area down on the south end,” Ryder said.

The yard will be able to work on both classes of LCS, the Constellation-class frigate and the Coast Guard’s national security cutter, leaving other repair yards like NASSCO and BAE Systems to work on larger cruisers, destroyers and amphibious ships.

Austal hopes to have one ship in the dry dock and two more pier-side at any given time, meaning the yard could accomplish about two and a half “dry-docking selected restricted availabilities” each year.

“What we’d like to see is just that dock filled with LCSs. You launch one, you bring the next one in,” he said, noting that the company already has “the expertise on how to dock and repair that specific ship class” due to its work building the Independence-variant hulls and conducting maintenance support forward in the Western Pacific.

Austal has a workforce of about 35 people in Singapore, where the LCSs are formally located — though the ships spent a great deal of time in Guam during the COVID-19 pandemic, and Austal sent repair personnel there. Ryder said the company is eyeing a Pacific laydown that could include Singapore, Guam and Japan in the coming years and is prepared to go where the Navy needs it most for supporting Independence-variant hulls.

“Between that [growth in the repair business] and steel, we’re still the core company that’s focused on lean manufacturing and process improvement, but other than that, we’re a very different animal than we were a couple years ago,” Ryder said.

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