Friday, February 20, 2015

Navy's largest ship builder to bid on multi-billion-dollar contracts for new carriers, submariines

Doug Cameron, Wall Street Journal, Feb 19

The U.S. Navy’s largest shipbuilder announced plans Thursday to boost investment and take on more program risk as it prepares to bid on billions of dollars of work for new aircraft carriers, submarines and nuclear energy work over the next several years.
The head of Huntington Ingalls Industries   said the company would change the way it designs and builds vessels in an effort to adjust to a tougher budget environment and myriad proposals to change the way the Pentagon buys weapons and services.
The Pentagon’s efforts to push defense contractors to boost investment on innovation and use more off-the-shelf technology to cut costs have received a mixed response from industry, which is seeking clearer goals on priorities before committing more funds. “The reality is the fiscal environment is going to push more risk on to us,” Huntington Ingalls Chief Executive Mike Petters said in an interview. “There is an opportunity for us to reset the business.”
Huntington Ingalls, based in Newport News, Va., is the sole builder of aircraft carriers for the Navy, and alongside General Dynamics Corp., builds Virginia-class nuclear submarines, destroyers and support vessels in what has become a virtual duopoly.
Mr. Petters said there was about $100 billion in sole-source and competitive opportunities for Huntington Ingalls over the next 20 years, including the planned replacement for the Ohio-class submarines that carry nuclear missiles, the Ford-class aircraft carriers, and new destroyers and amphibious ships.

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