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Monday, May 20, 2024
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From Steel to Seaworthy

DEFENSE: General Dynamics NASSCO Builds $750M Ship

SAN DIEGO – General Dynamics NASSCO (NYSE: GD) paused heavy construction work on one of the U.S. Navy’s newest ships on a recent Saturday to bring dignitaries to its shipyard and put a name on its handiwork.

A 784-foot-long auxiliary ship known as an expeditionary sea base (ESB) was christened USNS Robert E. Simanek. Like other ships in the class, the Robert E. Simanek was named after a U.S. Marine and a Medal of Honor recipient.

The ship going together at the corporation’s Barrio Logan shipyard carries a price tag of $750 million. Its construction helps to support NASSCO’s local full-time workforce of 3,400, as well as a group of subcontractors. NASSCO splits its business between building auxiliary ships for the Navy and repairing Navy ships. It occasionally builds and repairs ships for private companies.

The expeditionary sea base has a 52,000-square-foot flight deck accommodating a wide range of U.S. military aircraft. It is built to support a range of Navy operations, including Air Mine Counter Measures (AMCM), counter-piracy operations, maritime security operations, humanitarian aid and disaster relief missions and U.S. Marine Corps crisis response.

Proceedings, the journal of the U.S. Naval Institute, said that in the opinion of many, the ship looks like a parking garage, with its flight deck perched above a lower deck. The ship’s design is a variation of an Alaska-class crude oil carrier previously built by GD NASSCO.

Ceremonies Steeped in Tradition

Ann Simanek Clark, ship sponsor and daughter of the ship’s namesake, christened the ship by breaking a bottle of sparkling wine along the hull. Higher up, at deck level, the ship was draped with red, white and blue bunting.

In separate ceremonies in late April, NASSCO marked the start of construction of one more ESB ship, to be named after Hector A. Cafferata Jr. The ship – the last of the ESBs – is scheduled to be christened in 2025.

Cafferata’s daughter and granddaughter, Heather A. Cafferata and Jessica L. Cafferata, donned specialized work clothes, gold hardhats and helmets and proceeded to weld their initials on a steel plate. The plate will be affixed to the ship’s keel and stay with the ship throughout its service life.

The christening of the USNS Robert E. Simanek, at left, brought a group of dignitaries to the General Dynamics NASSCO shipyard in Barrio Logan on May 4. At right is the fleet replenishment oiler USNS Earl Warren, which was delivered to the Navy on Tuesday (May 7). Photo courtesy General Dynamics NASSCO

Oiler Ships in the Production Pipeline

The Barrio Logan shipyard also produces fleet replenishment oilers, which meet up with fighting ships on the open ocean to replenish fuel and other supplies. The third of the John Lewis-class oilers, the USNS Earl Warren, was delivered to the Navy on Tuesday (May 7).

So far NASSCO has received contracts to build nine oilers. A NASSCO representative said the company is in discussions with the Navy on ships 10-17 as authorized in the National Defense Authorization Act.

“The oiler program translates to over a decade of future work on NASSCO’s order book,” the representative said.

The Navy plans to buy 20 oilers, which are 746 feet long and named for leaders in the U.S. civil rights movement.

Four oilers are in various states of construction at the shipyard. The Robert F. Kennedy is awaiting sea trials. The Lucy Stone is set to be christened in the fall. The Sojourner Truth is under construction on the shipyard’s inclined ways.

NASSCO has embarked on early construction of the Thurgood Marshall.

The Navy has two more ships, to be named after Ruth Bader Ginsburg and Harriet Tubman, under contract.

Jessica L. Cafferata, left, gets an assist from a General Dynamics NASSCO employee in welding her initials onto a piece of steel that will become part of the expeditionary sea base ship to be named for her grandfather, Hector A. Cafferata Jr., during ceremonies April 25. Photo courtesy General Dynamics NASSCO

Pursuing Repair Business, Other Opportunities

NASSCO’s current repair work consists of the destroyer USS Chung-Hoon, which is in the shipyard’s floating dry dock. At Naval Base San Diego, NASSCO is at work on the amphibious ships USS Makin Island and USS Anchorage.

Overall repair workload has dropped for three years in a row, down one-third compared to three years ago, the NASSCO representative said.

Looking ahead, the NASSCO representative said the company continues to pursue both government and commercial new construction work, including the Navy’s future submarine tender program, and is in ongoing discussions with a variety of potential future customers.

The representative added that “maintaining a full order book is the path to a sustained workforce and highest economic impact to the San Diego region.”

Backlog for Local Projects Exceeds $2.5B

In a securities filing, General Dynamics reported that as of Dec. 31, the company a backlog of $500 million related to the two ESB ships. The delivery date for the last ship is listed as 2026.

The same report said that as of Dec. 31, the company had a $2 billion backlog related to seven John Lewis-class fleet replenishment oilers. The delivery date for the last ship is listed as 2028.

General Dynamics reported it received $2.7 billion in revenue from the construction of surface ships in 2023. The company also builds Arleigh Burke-class destroyers at Bath Iron Works on the East Coast. That will occupy GD until at least 2032.

The corporation has an even larger business building nuclear-powered submarines, one that brought it $8.6 billion in 2023. GD builds submarines at its Electric Boat business in Connecticut. That part of the business has backlogs to 2032.

In San Diego, shipbuilding and repair is part of the wider scope of defense contracting. Defense contracting of all types brought an estimated $19 billion to the San Diego County economy in fiscal 2023, according to the annual economic impact report of the San Diego Military Advisory Council. Defense contracts funded nearly 206,000 civilian jobs.

General Dynamics
FOUNDED: 1952
CEO: Phebe N. Novakovic; David J. Carver is president of subsidiary NASSCO
HEADQUARTERS: Reston, Virginia
BUSINESS: Aerospace and defense contractor
REVENUE: $42.27 billion (2023)
EMPLOYEES: 111,600 total as of December 2023; approximately 3,400 at NASSCO San Diego, excluding subcontractors
STOCK: GD (NYSE)
WEBSITE: gd.com; nassco.com
CONTACT: 619-544-3400
SOCIAL IMPACT: Members of NASSCO’s fire department raised $3,538 for the Burn Institute as part of a “fill up the boot” drive in March
NOTABLE: NASSCO’s shipbuilding facilities include seven indoor cells for painting and prep. The cells can accommodate steel blocks of a ship’s hull that measure 52 feet by 52 feet by 30 feet

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