$450 million sub contract to fuel more expansion and jobs at Austal USA in Mobile

Austal USA has received a $450 million contract for work on nuclear submarines, a deal that will fuel more construction and more hiring at the Mobile shipyard.

The contract was announced by Austal USA’s Australian parent company, Austal Ltd. According to the company announcement, the $450 million contract with General Dynamics Electric Boat will “enable Austal USA to expand production capacity at its US Shipyard in support of the U.S. Navy Submarine Industrial Base.”

Onlookers shouldn’t expect to see submarines emerging from Austal USA’s construction bays across the Mobile River from downtown. The modules produced at the yard will be shipped to Newport News Shipbuilding in Virginia or General Dynamics Electric Boat in Connecticut, a company spokesperson confirmed.

What they will see is yet another expansion and more “help wanted” notices. In April 2022 the company opened a new steel production line seen as the key to its future. In July it broke ground on a massive construction and launch facility known as Final Assembly 2, where modules from that production line will be assembled into steel ships for decades to come.

At the time, company officials said that FA2 represented a $250 million investment that will add about 1,200 jobs to Austal’s workforce of about 3,100.

Austal Ltd. said that with the new submarine contract in hand, construction work will begin this fall on the next addition to the Austal USA campus. The Mobile yard will “enhance its existing infrastructure by designing, constructing and outfitting a new module fabrication and outfitting facility … to support the U.S. Navy goal of delivering one Columbia-class and two Virginia-class submarines annually.” The building will support “approximately 1,000 jobs.”

An Austal USA spokesperson confirmed that those jobs will be in addition to the 1,000-plus expected for FA2. If all goes to plan, Austal USA potentially will employ more than 5,000 people after the sub module facility becomes operational in 2026.

The work leverages Austal’s distinctive approach to shipbuilding, developed in the days when the company specialized in aluminum vessels such as the Independence-class Littoral Combat Ships. Rather than building a ship up from bare bones, Austal assembles giant modules in what is more or less an assembly-line operation. The modules are then trucked to assembly bays, where they are welded together into ships.

Austal leaders have long argued this is a more flexible and more efficient approach than traditional methods. One aspect of that, they have said, is that more work can be done on modules before they’re aggregated into the ship, meaning less finishing work has to be done inside the vessel.

The idea that this could be applied to submarine work had been in discussion for years. In fact, Austal received its first order for submarine construction nearly a year ago. That $12.8 million order was for fabrication of the Command and Control Systems Module for a Columbia-class ballistic missile submarine.

Austal Ltd. CEO Paddy Gregg said the latest contract shows that General Dynamic Electric Boat has confidence in Austal USA as partner.

“General Dynamics Electric Boat has recognised that Austal USA is a solid partner to deliver high-quality components for Virginia- and Columbia-class submarines,” Gregg said in a company statement. “This growing partnership demonstrates confidence in Austal USA’s commitment to meet the needs of the U.S. maritime industrial base and support the most critical needs of the U.S. Navy.”

Mobile Chamber President and CEO Bradley Byrne said the new contract “is a game-changer for the Mobile region” and will help by “further cementing Mobile as a hub for innovation and industry.”