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00:00This is a story about staying the course.
00:03As America marks 250 years of independence,
00:06President Trump has plans for a much bigger navy,
00:09what he calls a golden fleet.
00:11But to get from planning to doing requires more than just money.
00:15It requires workers, suppliers, shipyards, design discipline,
00:19and executing on the plan over the course of years,
00:22even as the very nature of naval combat faces disruption.
00:26Bloomberg's Scarlet Fu has the story.
00:30This is an America-class amphibious assault ship
00:33currently under construction for the U.S. Navy
00:35by Huntington Ingalls Industries, also known as HII.
00:39It's where the flight deck of LHA-8,
00:42which is really the ship that takes Marines into the fight.
00:44This deck will have between 12 and 20 F-35s,
00:49based on the configuration.
00:50They park here?
00:50Yeah, so it's a very capable ship.
00:52It's going to go to trials at the end of this year
00:55and deliver next year.
00:57It's just one of several complex naval ships
00:59being built at the Ingalls shipyard
01:01in Pascagoula, Mississippi,
01:03where we got a tour from HII CEO Christopher Kastner.
01:08Shipbuilding gets in your blood.
01:09There's just something so rewarding
01:10about building a ship you know is going to go into service.
01:14Turning this steel into American naval power
01:16takes thousands of workers, millions of parts,
01:19and years of labor.
01:21Under President Donald Trump,
01:22Washington wants more ships fast.
01:25I have approved a plan for the Navy
01:28to begin the construction of two brand new,
01:30very large, largest we've ever built battleships.
01:35They'll be the fastest, the biggest,
01:36and by far 100 times more powerful
01:39than any battleship ever built.
01:44His administration's plan calls for new combatants,
01:47auxiliaries, unmanned vessels,
01:49and a nuclear-powered battleship.
01:51Currently, the U.S. Navy operates
01:53roughly 290 Battle Force ships,
01:56well below the mandated 355 ships.
01:59The Navy is requesting $65.8 billion
02:02for their 2027 fiscal year.
02:04That's about $18 billion,
02:06or almost 40% more,
02:08than it requested for 2026.
02:10For shipbuilders,
02:12that translates into years of expected revenue.
02:14The administration is investing in the right places.
02:18There's a lot of momentum behind shipbuilding.
02:21We see improvements across both of our shipyards,
02:23and we need to continue to improve
02:25to support their requirements.
02:27Momentum aside,
02:28can the industry build a fleet
02:29at the speed and scale
02:31that this White House wants,
02:32especially when construction
02:34of the most complex Navy vessels
02:35is split between two big players,
02:38General Dynamics and HII.
02:41HII provides 50% of the ships
02:44of the United States fleet.
02:45We build nuclear vessels,
02:46aircraft carriers, and submarines
02:48in Newport News, Virginia,
02:49and then we build four classes
02:51of surface combatants here.
02:54One of the biggest limitations is labor.
02:57Shipbuilding depends on skilled workers,
02:59like welders, electricians, and pipe fitters.
03:02Today, more than a quarter
03:03of these maritime workers
03:04are approaching retirement age,
03:06which is a problem,
03:07according to Seamus Daniels
03:08of the Center for Strategic
03:10and International Studies.
03:12A major constraint
03:13is definitely the workforce challenge.
03:15As shipyards are losing
03:17some of their more experienced workers,
03:19and they're being replaced
03:20by workers who have less experience.
03:23So ultimately, that may contribute
03:25to some of the delays
03:26that the Navy is seeing
03:28in producing ships
03:29as you're trying to train this workforce
03:31and really get them up to speed.
03:33Again, I'm missing my 45 here.
03:36What's the takeout for that?
03:37Fruit net.
03:37To fill that gap,
03:39the Navy helps fund workforce initiatives
03:41while shipbuilders develop
03:42their own pipelines.
03:44Both General Dynamics and HII
03:46have apprenticeship programs.
03:48HII's yard in Mississippi
03:49employs more than 11,000 people,
03:52making it one of the state's
03:53largest manufacturing employers.
03:56In this building at the MTA,
03:57we also teach sheet metal,
03:59joiners, pipe and hull insulators,
04:02and also a lot of electrician training.
04:05Being able to give some knowledge to them
04:07so that way they can take it with them
04:08out into the yard
04:09and better their career
04:11and also the company as well.
04:13The selling point for trainees
04:14are paid training,
04:16a path to higher wages,
04:18and a career that does not always require
04:20a four-year college degree.
04:23Solving for a steady stream of skilled laborers
04:25is not the only challenge.
04:27The industry also needs to address
04:28supply chain issues,
04:30on-time contracts,
04:31design changes,
04:32and overall bureaucracy.
04:34And that is after the money has come through.
04:37We need to get funding on time
04:38to get the suppliers started.
04:40What we're doing is working through a backlog
04:42that was put in place
04:45under really difficult conditions
04:47and under a different economic environment.
04:49Our two largest contracts were executed in 2019.
04:53And you think about what was going on in 2019,
04:55no inflation,
04:56a more stable supply base,
04:58and those were put under contract
05:00than COVID hit.
05:01And so we had the supply chain impacted,
05:03labor impacted,
05:04made it very challenging.
05:05So we're working through those.
05:07But the ships that are being put under contract now
05:09are putting under contract
05:10and scheduled performance
05:12and scheduled predictability,
05:14assuming what the supply chain can do right now,
05:16assuming the constraints we have in our shipyard.
05:18If you were advising policy makers,
05:21lawmakers, the Navy,
05:22what would be one policy recommendation
05:24that would increase U.S. ship output?
05:27Yeah, be on time,
05:29make sure the funding arrives on time,
05:30make sure the supply chain is safe
05:32and can meet the requirements,
05:35and we don't get behind before we start.
05:37That happens from time to time in shipbuilding
05:39where you get late orders,
05:40they hold the schedule consistent
05:42with what the initial contract said,
05:44and you have no chance to meet it.
05:46Securing funding is just the beginning.
05:48There's also the sequence
05:50of how the money, contracts,
05:51and ship designs move through the system.
05:53Government shutdowns are a major hindrance
05:56to actual effective shipbuilding
05:58and making sure that contracts
06:00and programs themselves are getting started.
06:03But I think there's a broader issue
06:05beyond the appropriations and funding process
06:08that comes down to the way
06:09that the Navy designs its ships as well.
06:12And this is about the requirements process
06:15that the Navy goes through.
06:16The U.S. naval vessels are incredibly complex
06:19with combat systems, radar, and other technology.
06:23And so that means that the ships themselves
06:26and their designs are incredibly complex.
06:28But given the timelines it takes
06:31to design and build these,
06:32the requirements may evolve
06:34as the threat environment evolves over time.
06:36What that ultimately means
06:38is that the Navy may start constructing ships
06:42before the design is finalized.
06:44And that can be a major issue,
06:46especially when you're changing the design
06:48as you're building the ship.
06:50Every time we change a requirement,
06:52change a design, it costs us a lot,
06:54both in dollars as well as in schedule.
06:57So that's got to stop.
06:59There isn't a day that I go to work
07:02that I'm not thinking about what's going on here
07:05and in other places around the world
07:06where you're serving.
07:08Retired Navy Admiral Mike Mullen
07:10served as Chief of Naval Operations
07:12under President George W. Bush
07:14and Chairman of the Joint Chiefs of Staff
07:16in the first few years of the Obama administration.
07:18I think the biggest challenge
07:21that the Trump administration is going to have
07:23is execution and staying, you know,
07:27within budget and staying on schedule
07:29and holding people accountable.
07:32So I think all the pieces are there.
07:34Now the question is, can we execute?
07:37One solution? Farm out the work.
07:40Today, only a tenth of Navy shipbuilding
07:42is done at distributed sites.
07:44The Navy wants to increase that to half
07:46by using qualified suppliers
07:48and smaller yards across the country
07:50to add capacity.
07:51We doubled our outsource capacity last year,
07:55another 30% this year,
07:57and we'll continue to increase that
07:58as the partners get qualified.
08:00We're very careful to do it correctly
08:01because if you don't do it correctly,
08:03there's significant challenges
08:05with quality and schedule performance.
08:07So you have to be mindful with how you do it,
08:09but we will continue to outsource.
08:10That plan also relies on building ships differently,
08:14using more modular digital designs
08:16that can be spread out across multiple yards.
08:19So this is thinking through how to design ships
08:22and submarines in a way that different parts,
08:25different major segments of the ship
08:27can be constructed in different parts of the country,
08:30and then they can be combined in one major shipyard.
08:32But what that'll ultimately allow the U.S. to do
08:36is to leverage areas in smaller,
08:38potentially commercial shipyards or repair yards
08:41that can focus on these modules,
08:43so then they can be combined.
08:45And what that would ultimately mean
08:47is being able to distribute shipbuilding need
08:50and capacity across other areas of the country.
08:53Then there's the contrast
08:55with how our global peers are building ships.
08:57China is achieving scale
08:58through a vast commercial and naval shipbuilding base,
09:01while South Korea and Japan are setting standards
09:04for their speed, process discipline,
09:05and production capacity of commercial ships.
09:08I think it's good to always compare yourself
09:10against the competition.
09:11There are different shipbuilding processes.
09:13Commercial ships are completely different
09:15from building a defense ship.
09:16If you were to go into a Korean shipyard
09:18for commercial,
09:19it looks very different than the shipyard here.
09:21If you go into the defense shipyard,
09:23it looks very similar to this.
09:25Actually, their defense shipyards
09:26look more alike than ours
09:28than their commercial shipyard.
09:29So I think it's a good comparison.
09:31You always need to know
09:31what the competition is doing.
09:33China's shipbuilding surge
09:34is a big reason U.S. yards expect demand
09:37to stay elevated for years.
09:39I think the growth in China
09:40and the growth in their shipbuilding programs
09:42means that we're going to be building ships
09:43for a while here,
09:44and we need to continue to build.
09:46We need to concentrate on that
09:47because China's building a big fleet.
09:50And while China's fleet
09:51is significant in numbers,
09:53they've got ways to go
09:54from a quality standpoint,
09:55and we need to pay attention
09:57to that as well.
09:59Even if America can build more ships,
10:02another question hangs over the fleet.
10:03What kinds of ships should be built?
10:05The ongoing conflicts in Ukraine
10:07and the Middle East
10:08make clear how relatively cheap drones
10:11and missiles
10:11can threaten expensive traditional vessels.
10:14I think what the Navy needs to pursue
10:16is what is generally referred to
10:19as a high-low mix of capabilities.
10:21So having your larger vessels
10:24that can perform exquisite tasks
10:26that are large
10:27and may be expensive in some cases,
10:29and combining those
10:30with cheaper, more affordable forces
10:32that provide a different sort of effects,
10:34but you can actually buy them in mass.
10:37In the Red Sea,
10:39for literally months on end,
10:42we were shooting down cheap drones
10:44with very expensive missiles,
10:46which is a losing game in the long run.
10:48But we were able to protect the ships.
10:50We know this is coming out there
10:52in terms of the drones.
10:54There's also the risk
10:55to the Marines on board these ships.
10:57To reduce that danger
10:59and extend the fleet's reach,
11:00the Navy is investing
11:01in autonomous, uncrewed vessels.
11:04We have a Romulus family of systems
11:05for surface vehicles.
11:07So we saw it coming.
11:08It's really a force multiplier.
11:10It leads into their strategy,
11:11their hedge strategy,
11:12where they have manned
11:13and unmanned ships working together.
11:15And they've had that strategy for a while.
11:17The technology just hasn't been there
11:18to support it.
11:19Now the technology has.
11:21The autonomy technology
11:22has come into the place
11:23where the ships are more reliable
11:25and the integration between manned-unmanned
11:27is more reliable.
11:28But can the Navy learn from past mistakes
11:31and implement real changes
11:32to improve future fleets and sea warfare?
11:35What do companies like HII need
11:37from the government
11:38to be the premier shipbuilder?
11:40We just need predictable orders.
11:41We need a chance to be successful.
11:43We need to limit change
11:44and we need the orders on time.
11:46I'm going to build
11:47whatever they want me to build.
11:49Trump's golden fleet
11:50may signal a shift
11:51to a larger Navy.
11:52But the real test
11:53will be whether America
11:54can build a fleet
11:55that's responsive
11:56and flexible enough
11:57for warfare
11:58that is constantly changing.
12:00All while staying
12:01the multi-year course
12:02that it takes
12:03for ships to go
12:04from blueprint
12:04to naval battlefield.
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