00:00Submarines are a vital asset for any country's navy and for decades the U.S. has maintained its undersea superiority.
00:08But with production delays and a labor shortage plaguing the industrial base, it may be in danger of losing its edge.
00:15That's as China is rapidly building up its submarine fleet, opening up a new front in the superpower rivalry.
00:22Well, Bloomberg senior producer Ryan Chua joins us now for more on today's Big Take.
00:26And Ryan, just how severe are the problems facing the U.S. submarine industrial base today?
00:33Well, Hass, it's quite a massive issue and U.S. officials are becoming increasingly concerned.
00:38We're talking here about two billion dollar next generation submarine programs that are both facing significant production delays.
00:46So on the one hand, you have the Columbia class ballistic missile submarine, one of the most powerful in the fleet and will be the largest U.S. submarine ever built.
00:53The first of 12 boats in that class will be delayed by 12 to 17 months.
00:59And then you have the Virginia class attack submarines, which will form the majority of the U.S. fleet.
01:04Now, the latest boats in that class are facing delays of 24 to 36 months.
01:09So the worry here is that the U.S. won't be able to produce enough submarines, not only to replace the existing ones in their fleet that are aging and are due for decommissioning in a few years, but also to be able to maintain its undersea advantage.
01:24So the Navy's goal has always been to be able to build one Columbia class and more than two Virginia class submarines a year.
01:31But it hasn't met that target yet so far.
01:36What's causing these delays, Ryan?
01:39Well, it's a confluence of factors, Haas.
01:42But according to the experts we spoke to, one of the biggest is really a shortage of skilled labor.
01:47There's just not enough people right now working or skilled workers rather working for the industrial base.
01:53Now, we do know, it's hard to put an exact figure as to how wide the gap currently is in the workforce, but we do know from congressional reports that the shipyards, for example, several of them are facing attrition rates of as much as 30 percent for some skilled trades.
02:11And the problem is there's not enough new people to replace them.
02:14So the Navy has really been ramping up recruitment and really boosting efforts to get to attract more people to work in shipyards and other companies involved in submarine construction and their suppliers.
02:27And we do know from the Navy that the need is quite pressing right now.
02:31They need to hire or be able to hire some 140,000 workers over the next decade to meet this growing need for not only submarine construction, but submarine maintenance.
02:42When it comes to China, though, Ryan, how close is China to catching up?
02:46And why are U.S. officials and experts so worried about it?
02:51Well, we have to know that China doesn't publish official figures regarding its naval capabilities.
02:57So what we have are independent assessments and intelligence reports.
03:01And what we've seen from the numbers out there is that China is rapidly building up its undersea fleet.
03:07We're talking here, according to one study, about a rate of building four to six nuclear-powered submarines a year.
03:15And the U.S. Defense Department's own assessment says that China will be able to have about 80 submarines in its fleet come 2035.
03:23So it's really causing worries in Washington, aside from the fact that China has been investing a lot in R&D and upgrading its shipyards.
03:30Ryan, in about 30 seconds, we know you visited a U.S. Navy-funded training facility in Virginia.
03:38As part of your reporting, I mean, what did you see?
03:41What part does it play in revitalizing U.S. submarine building?
03:46Yes, Hass, this is a 100,000-square-foot facility in southern Virginia called the Accelerated Training and Defense Manufacturing.
03:53Quite a long name.
03:53But basically a part of efforts to boost submarine workers' development and hiring.
03:59So students there get trained for about 16 weeks, and eventually they get hired in this vast network of suppliers and companies involved in the submarine industrial chain and the industrial base as a whole.
04:11And the hope is that they will be able to address this massive workforce shortages that are plaguing the industry has.
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