On the surface, Austal USA’s announcement last week that it plans to hire 1,200 people in the near future, expanding its workforce by more than 40%, seems like a story of things to come. But in many ways, it is a story of what has already happened.
“Austal has gone from one customer to six,” said Rusty Murdaugh, president of Austal USA, at a Monday press conference announcing a major job fair that will take place on Saturday. “We went from building two types of ships to 13.”
He might undersell it.
Not so long ago the Mobile shipyard was struggling to find a future for itself. It grew rapidly on the strength of two aluminum ships built for the US Navy: The Independence-class Littoral Combat Ship (LCS), an angular aluminum trimaran, and the Expeditionary Fast Transport (EPF), a universal aluminum catamaran. Its workforce peaked at around 4,300.
But as the end of the LCS program approached, the need for work to follow it became more pressing. The most coveted prize offered was the contract to build a new generation of naval frigates, a program that would have occupied Austal’s yard for a decade. But in early 2020, the Navy chose another shipyard.
There was a silver lining. Austal’s exclusive focus on aluminum shipbuilding was a limitation. The federal government gave Austal $50 million to offset the effects of the pandemic, and Austal matched that with another $50 million or more. The combined investment allowed Austal to diversify into steel shipbuilding and engage in a much wider range of work.
Craig Perciavalle, then president of Austal USA, said in 2019 that the frigate contract was at the top of his wish list, but Austal was targeting a growing list of alternatives. Austal presented a medical version of the EPF, he said, and showed concepts for autonomous ships that looked like robotic cousins to the EPF and LCS. Austal has also expanded its post-delivery work, including a San Diego office that opened in 2018.
Adding a steel line opened up more possibilities. Speaking to AL.com in August 2021, Larry Ryder, Austal USA’s vice president of business development and external affairs, ticked off some of them: The Navajo-class T-ATS salvage vessel. The Coast Guard’s Coastal Patrol Cutter. A landing craft called the Light Amphibious Warship. There may even have been a shot at becoming a “next yard” for the frigate, building replicas of the winning design as the Navy sought to speed up production. Ryder said at the time that the workforce was holding steady at 3,300.
Since then, Austal has been constantly ordering steel work. None of its individual victories stack up as high as its run of 19 Littoral Combat Ships, but collectively they add up. The first steel vessel of the new line will be T-ATS. It is expected to be ready for delivery in late 2024, and Austal will build at least three more of the tow, salvage and salvage vessels. The Navy commissioned it to build a $128 million dry dock. Austal even won work to build sections of nuclear submarines.
The biggest win by far came in June 2022, when Austal won a contract to build Heritage-class Offshore Patrol Cutters. Austal is the next yard, and the knives it builds will be based closely on the work of the Florida yard that won the initial contract. But the deal could be worth more than $3 billion if the Coast Guard exercises all of its options. That would make it second only to the LCS program in Austal’s portfolio.
It’s not a moment too soon. The last Independence-class LCS, the future USS Pierre, is about 40% complete, Ryder said. “We’re actually shutting down the LCS line,” he said.
In announcing Austal’s hiring campaign, Murdaugh said Austal currently employs about 2,800 people. If not for the new work coming in, the shipyard would be prepared to see that number fall, rather than plan for an increase that will take it back close to its all-time high.
“All these projects are what’s driving the need for that employment,” Ryder said.
What drives the projects? It may not just be the new steel line. For years, Austal leaders have claimed to have pioneered a manufacturing process that sets their backyard apart. LCSs and EPFs are not built in a traditional way. Major sections called modules are built separately, then welded together in the giant assembly halls that face downtown Mobile across the Mobile River.
In theory, it’s a process that brings modern manufacturing efficiencies to the one-hull-at-a-time world of shipbuilding, and Austal USA has regularly touted its ability to turn out many ships on schedule and on budget. It was easy to discount this as hype, but the flood of new jobs suggests the Navy was convinced it was more.
US Navy Chief of Naval Operations (CNO) Admiral Michael Gilday, center left, visits the Austal United States shipyard in Mobile on January 26, 2023. According to Austal, Gilday “toured the shipyard’s facility and discussed the growing diversity of the design and shipbuilding firm. contracts,” witnessing work on both steel and aluminum vessels in the company’s 867,000-square-foot modular manufacturing facility.Courtesy of Austal USA
“I think I could sell that to the Navy all day,” Ryder said. “At the end of the day they will say, are deliveries on time, on time? And we were.”
“Our process gets us the results, the results are what the customers react to,” he said.
The fact that Austal USA is now helping to build nuclear submarines is perhaps the best illustration. It’s “something that would have been a pretty crazy thought a year ago,” Ryder said.
Other companies build the submarines of the Virginia class and the Columbia class, and that does not change. But Ryder said the Navy wants to make sure the industrial base is there to support its desired production rates, and that’s where Austal comes in. It knows how to build modules, so it will do that: Command and Control Systems Modules and Electronics. Deck Modules for the two subprograms.
Building the cylinder pressure hull is the kind of specialized work that Austal does not undertake. “What we’re going to build will slide into that hull as a module,” Ryder said. The process starts with a module shipped for Austal to fit; by 2026 it will build them from scratch and ship them to the East Coast for installation.
Larry Ryder, Austal USA’s vice president of business development and external affairs, speaks at the Littoral Combat Ship christening in December.Courtesy of Austal USA
“The way we built our yard, it shows,” Ryder said.
“I don’t think there’s really a secret sauce,” he said. “It’s really a mindset, it’s a culture.”
“Every time we move a module, we have those meetings and say, ‘How could we do this better?'” he said. It’s all about considering changes that could improve efficiency. Placement of tools? The way a module is designed, or simply the way it is positioned for the job? Cut the time skilled workers spend on unskilled prep work? Can permanent lighting be installed early in the process, eliminating the need to add and then remove temporary lighting? The goal is to shave hours off the process.
Bridge modules in particular are nearly complete, with most electronics installed and tested, before they are grafted onto ships, Ryder said. This contributes to ships that are almost complete when launched, requiring less equipment, testing and trouble shooting than might otherwise be the case.
The growing workforce will need to be trained to handle an increasingly diverse range of projects. In addition to more EPFs, including medical vessels, Austal will build wind-driven drones. The yard even has orders to build the aluminum elevators that will lift jets to the decks of the upcoming USS Enterprise and another new aircraft carrier, the future USS Doris Miller, Ryder said.
The backcourt will lean heavily on its corps of veterans with 5, 10 or 15 years under their belts, he said. “It’s really going to come down to leadership,” he said.
It’s a challenge on multiple levels, including workforce education. Bradley Byrne, president and CEO of the Mobile Chamber, said the hiring campaign is “not just an Austal effort. This has to be a community effort. This has to be a total effort.”
Winning the contracts means Mobile’s largest industrial employer has turned a scary corner. Now every contract in hand represents a promise that must be fulfilled.
“We’re going to get those done, we’re going to do what we always do,” Ryder said. “We’ll probably add some new buildings.”
