General Dynamics on teaming with Huntington Ingalls Industries for sub production: ‘We don’t like it.’
If you ask the Navy, the teaming arrangement established between General Dynamics Corp. and Huntington Ingalls Industries to build Virginia-class submarines is a big success. If you ask General Dynamics CEO Phebe Novakovic, she’ll tell you this: ‘We don’t like it.’
Novakovic’s comments on the arrangement, designed to keep both its Electric Boat and Huntington Ingalls’ Newport News shipyards in the submarine-building business, were made in the context of another program — the Ohio Replacement Submarine program, still in the development stage. The structure of that program, which sets out to replace the Navy’s Ohio-class ballistic missile submarines, is still being decided by the Navy.
“What I can tell you is this won’t look like a Virginia-class teaming arrangement,” Novakovic said during the Sandford Bernstein Strategic Decisions conference May 27. “That won’t happen. We don’t like it, and it’s too much risk.”
Under the Virginia-class program, Huntington Ingalls (NYSE: HII) builds the sub’s stern, habitability and machinery spaces, torpedo room, sail and bow, while General Dynamics builds the pressure hull, engine room and control room. The two companies alternate work on the reactor plant as well as the final assembly, testtest is test, outfit and delivery.
“The Virginia class is an extremely successful program and we’d like to keep it that way, and we’re confident in our performance,” Novakovic added. “But the Ohio replacement is a significantly larger ship.”