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Monday, Feb 26, 2024

Austal to Spend $100M on National City Site

Austal USA, which builds small surface ships for the U.S. Navy, has big growth plans for National City.

The defense contractor expects to make approximately $100 million worth of improvements to a newly leased bayfront site south of the 32nd Street naval station. In addition, it plans to expand its local headcount of 60 employees to more than 300 by the summer of 2023, according to Larry Ryder, Austal USA’s vice president of business development and external affairs.

Its new lease runs through 2050.

The business announced plans to bring in a 531-foot dry dock, suitable for substantial repair jobs, which will augment work on the 15-acre site that it just leased from the Port of San Diego. Austal plans to maintain and repair small Navy surface combatants — including the Austal-built Littoral Combat Ship and the Navy’s new class of frigates — as well as ships from the Military Sealift Command and U.S. Coast Guard.

On Dec. 20, Austal USA announced that it placed an order for a floating dry dock with a capacity of more than 9,000 light tons. The structure will become the new centerpiece of the shipyard. The builder is Sedef, a Turkish company. The dock is expected to be fully operational by August 2023.

Austal is investing approximately $100 million on the dry dock, lease acquisition and other capital expenditures, Ryder said.

Port District Signs Off

Commissioners of the San Diego Unified Port District agreed on Nov. 9 to transfer the shipyard lease at 1313 Bay Marine Drive in National City to Austal, whose U.S. headquarters are in Mobile, Alabama. Austal’s parent company is in Australia.

The outgoing tenant is Marine Group Boat Works. Family-owned Marine Group Boat Works, which has another facility in Chula Vista, said it will now focus on serving superyachts and commercial vessels such as high-speed ferries, tugs and barges.

Austal took possession of the National City property on Dec. 15.


In a statement, Austal USA President Rusty Murdaugh said the company is ready to meet a growing demand for shipyard services and ready to work closely with National City as Austal expands its presence locally.

The company has been introducing itself to community leaders, a process that will continue in 2022, and plans to support San Diego County organizations, Ryder said.

Pacific Focus

The U.S. Navy has been transferring more assets to Pacific ports in recent years. As a result it has increased the number of ships homeported in San Diego. This year the ship count is expected to grow from 72 to 77. San Diego is expected to gain an additional Littoral Combat Ship this year, bringing the total number to 16, according to the recent report from the San Diego Military Advisory Council, or SDMAC. The number of Mine Countermeasure ships is expected to grow from two to eight.

Austal builds the Independence class of Littoral Combat Ships, which are 422 feet long, displace 3,200 metric tons and have trimaran hulls. The ships are designed to be fast and agile, operate in shallow waters, and carry small crews. Currently the Navy bases all of its Independence-class ships in San Diego. Austal builds the ships in Alabama and has so far delivered 15 to the Navy, most recently on Dec. 21.

The defense contractor’s order book includes four more Littoral Combat Ships.


In November, the Navy awarded Austal a $72.5 million contract for emergent repair and continuous maintenance for Littoral Combat Ships deployed in the Western Pacific and Indian Ocean. The contract has options that would increase its duration to five years and its possible value to $215.8 million.

Green Initiatives

During lease negotiations with the Port of San Diego, Austal agreed to implement several green initiatives, including the use of electric power forklifts. The company also plans to install solar arrays and provide charging stations for electric cars.

Austal’s dry dock will join other similar facilities in San Diego. Most are south of the San Diego-Coronado Bridge and most are larger than the 9,000-ton capacity dock that Austal has on order.

BAE Systems San Diego Ship Repair has the largest of the dry docks in port. The 950-foot Pride of California can lift 55,000 tons. BAE Systems bought it from a manufacturer in Qingdao, China. It arrived after a transpacific journey in late 2016. The big dock joined Pride of San Diego, which is 568 feet long and has a capacity of 26,000 tons.

Just south of the BAE shipyard, General Dynamics NASSCO operates an 820-foot dry dock with a 44,000 ton capacity.

The Navy’s floating dry dock, named Arco, is 492 feet long and has the capacity to lift 1,800 tons. The Navy uses it to maintain and service the nuclear submarines in San Diego.

A floating dry dock is essentially a barge built to hold another ship. Crews lower the dock into the bay by admitting seawater to tanks within its structure. Crews then move the ship into position over a submerged floor-like surface called the pontoon deck. Once the ship is in place over strategically placed blocks, the operator expels water from the flooded tanks of the dry dock. The dock slowly rises, carrying the ship with it and giving crews access to the bottom of the hull.

Austal’s dry dock will be 531 feet long and 154 feet wide, with a maximum draft of 36 feet.

According to the port district, Austal’s lease on the National City property calls for the payment of $91,994 of rent monthly in 2022, with a 3% raise to $94,754 in 2023, and annual rent increases after that. Rent will reach the $100,000 mark in 2025 and the $200,000 mark in 2041. In 2050, the final year of the lease, Austal will be expected to pay a monthly rent of $278,313.

Austal USA

FOUNDED:  1999

PRESIDENT: Rusty Murdaugh

HEADQUARTERS: Mobile, Alabama; the parent company is based in Australia

BUSINESS: Shipbuilder and defense contractor

STOCK: AUTLY on the over the counter bulletin board

EMPLOYEES: 60 in San Diego

WEBSITE: https://usa.austal.com/

NOTABLE: Austal has built more than 340 ships contracted to 121 operators in 59 countries

CONTACT: (251) 434-8000


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