The head of shipbuilder HII has expressed optimism that the incoming presidential administration may be more „receptive” to a plan aimed at increasing shipyard wages and accelerating submarine production, developed in collaboration with the Navy and industry.
“I think there is an opportunity with the new administration. I think there’s probably more receptivity to innovation in contracting, and that could potentially support getting these 17 boats under contract,” Chris Kastner told reporters on Thursday.
He was referring to the „Shipyard Accountability and Workforce Support” funding plans, commonly known as SAWS. This proposal, which did not gain traction with the current administration or lawmakers, seeks to modify certain contract mechanisms for how the Navy compensates submarine and aircraft carrier builders. This plan would allow prime contractors like HII and General Dynamics Electric to shift long-term funding to the left to invest in wage increases.
This investment is crucial for shipbuilders who have faced significant challenges in hiring and retaining new workers to meet the growing production demands from the US Navy, particularly in the context of the AUKUS trilateral security agreement.
“[SAWS] is an innovative approach that increases wages, accelerates submarine production [and] reduces costs through the [future years],” Kastner stated. “It really checks all the boxes relative to how you’d want to get boats under contract. So I think there is some — there could potentially be some more receptivity, because it’s a very innovative approach, and it solves a lot of challenges that we have right now.”
In the latest defense policy bill, lawmakers criticized the Navy for its lack of transparency regarding the SAWS initiative. They noted that the service negotiated this plan with industry without properly informing Congress or the Office of Management and Budget (OMB). However, the OMB subsequently proposed a $5.7 billion supplemental funding request in November to address projected shortfalls in submarine programs.
The Navy’s “lack of communication” has left “Congress with few options to address this situation and likely none that will rectify it going forward,” lawmakers concluded.
Workforce and Immigration
Certain lawmakers, including Sen. Tim Kaine (D-Va.), have suggested that part of the solution to labor force issues faced by shipbuilders and other industries lies in immigration reform.
When asked about Kaine’s comments, Kastner mentioned that HII’s Ingalls Shipbuilding facility in Pascagoula, Miss., has benefited from workers holding green cards.
“We have some great shipbuilders in Mississippi that are green card holders [and] we have some excellent community programs within the shipyard to facilitate bilingual work constructions. We have benefited from legal immigration down in Mississippi, and I support increased legal immigration,” he said.
His remarks come amid ongoing discussions about the future of American immigration, particularly with the incoming Trump administration vowing to prioritize border security and immigration reform. There have already been some tensions among factions within the Trump administration, with business-oriented figures like Elon Musk reportedly clashing with anti-immigration advocates.
