$450M subcontract to spur further expansion, jobs at Austal USA in Mobile

Austal USA has won a $450 million contract to work on nuclear submarines, a deal that will lead to increased construction and hiring at the shipyard in Mobile.

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

Bystanders shouldn’t expect to see submarines emerging from Austal USA’s construction sites across the Mobile River from downtown. Modules produced at the shipyard will be shipped to Newport News Shipbuilding in Virginia or General Dynamics Electric Boat in Connecticut, a company spokesman confirmed.

What they will see is yet another expansion and more “help wanted” messages. In April 2022, the company opened a new steel production line that is seen as the key to its future. In July, it began construction 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 FA2 represented a $250 million investment and would add about 1,200 jobs to Austal’s workforce, which now stands at 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 equipping a new module fabrication and outfitting facility … in support of the U.S. Navy’s 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 these jobs will be in addition to the 1,000+ jobs expected for FA2. If all goes according to plan, Austal USA will potentially employ more than 5,000 people after the submodule facility becomes operational in 2026.

The work uses Austal’s signature approach to shipbuilding, developed during the company’s time specializing in aluminum ships such as the Independence-class Littoral Combat Ships. Rather than building a ship from scratch, Austal assembles giant modules in what is essentially an assembly-line operation. The modules are then trucked to assembly areas, where they are welded together into ships.

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

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

Paddy Gregg, CEO of Austal Ltd., said the latest contract demonstrates General Dynamic Electric Boat’s confidence in Austal USA as a partner.

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

Bradley Byrne, president and CEO of Mobile Chamber, said the new contract is “a game-changer for the Mobile region” and will help “further solidify Mobile as a hub for innovation and industry.”