Home » Budget Industry » General Dynamics Readies for Virginia-class Block V and Columbia-class Sub Production


General Dynamics Readies for Virginia-class Block V and Columbia-class Sub Production

An undated artist’s rendering of the planned Columbia-class submarine. Naval Sea Systems Command Image

The first Columbia-class submarine is more than a decade away from joining the fleet and General Dynamics is preparing its Electric Boat business — and the Wall Street analysts watching the company — for what the almost $100 billion project means to its operations.

During the quarter, the U.S. Navy awarded General Dynamics $225 million for Block V Virginia-class submarine long-lead materials, and $100 million for advanced nuclear plant studies in support of the Columbia-class submarine project. Later this year, General Dynamics expects to finalize the Block V contract with the Navy, Phebe Novakovic, chief executive, told analysts during a conference call Wednesday morning.

Overall, these awards, steady work at the shipyards and good performance by other General Dynamics business lines helped the company report strong financial results for the three months ending July 1. Revenues were $9.2 billion, compared to revenues of $7.7 billion for the same period a year ago, according to the General Dynamics earnings report. Profits for the quarter were $786 million, an increase from the $749 million reported a year ago.

Looking forward, Novakovic said the marine division, which builds and maintains submarines and surface ships, is expected to continue providing a strong revenue stream.

“We have a great deal of insight into our customers and their spend rates. Certainly, in marine, that’s steady, predictable growth,” Novakovic said. “No particular surprises here.”

Later this year, Novakovic expects to finalize a contract for the Arleigh Burke-class guided-missile destroyer Flight III upgrade, which will bring work to the company’s Bath Iron Works yard.

The Virginia-class attack submarine North Dakota (SSN-784) is rolled out of an indoor shipyard facility at General Dynamics Electric Boat in Groton, Conn. US Navy Photo

The Virginia Block V contract is expected to be a multi-year contract for 10 submarines. These subs will include the Virginia Payload Module and have an estimated purchase price of about $3.2 billion per sub, according to a June 2018 Congressional Research Service report.

However, Novakovic warned analysts there will be some growing pains when General Dynamics starts Columbia-class submarine manufacturing. The Columbia-class project is massive and ramping up production will likely squeeze its margins – the profits General Dynamics earns from selling the subs to the Navy. The Virginia-class performance, though, is expected to offset any earnings pressure, Novakovic said.

“Columbia will in seven to eight years completely dwarf or heavily dwarf Virginia. That’s simply because of the volume coming into the yard,” Novakovic said. “We start manufacture of that first Columbia in ‘20 and then it will ramp up pretty expeditiously through the next four or five years.”

  • DaSaint

    EB is an impressive shipyard, just humming with Virginia-class production. Glad to see things moving along well thus far in the ramp-up to the Columbia class also.

    • NR

      At 3.2 billion per sub they better be humming along. That works out to $9.82 from the entire population of this country…for one ship. I’m a fan of the Virginia class but they burn up the budget. At some point a cheaper solution for some tasks will be required.

      • DaSaint

        You can do the same exercise with a Ford-class CVN, or a LHD/LHA, or a Burke Flight III DDG. It adds up!

      • disqus_CbFK3MPhJu

        that’s 2 days of just the deficit spending under the previous
        pres.

        2 days of JUST the deficit spending for those 2 days.

        • Duane

          That is a pointless point that could be used to justify anything. The fact is that all military spending needs to be strategically justified. Now that the GOP POTUS and Congress have returned us to the bad old days of trillion dollar deficits, projected by GAO to reach multi-trillion dollar deficits by the mid-2020s, the defense spending of today is a one time thing destined to be curtailed in the out years.

          Cost effective defense is critical.

          • disqus_CbFK3MPhJu

            is a pointless point a good point?

            anyhow, the gov spends money on things it shouldn’t
            even be involved with, let alone funding.

            defense is the number one priority for the US gov.
            I think the deficits are projected to be under
            1T, , still pathetic.
            Who knows, we may be able to get greater than
            3%GDP for our return this time.

      • Paul 2

        Let’s talk F-35

        • Duane

          F-35 costs are headed down, not up. Within 2 years the cost of a F-35 will be equal to or less than any legacy fourth gen supersonic fighter/attack aircraft … but with the added value that it actually survives combat against both fighters and air defense systems deployed by near peer enemies.

          • Rocco

            Try again!!

        • Rocco

          Off topic!! You missed the F-35 thread earlier this week!! If you hurry it’s still open!!

      • Duane

        The Virginia class Block V with VPM is a very high end SSN, with a good deal of its utility and its cost tied to the land attack mission. Ships of all types, and especially SSNs, are not cost effective conventional land attack platforms.

        Far more cost effective conventional land attack platforms are land based mobile missile launchers, and aircraft. A flight of 2 to 4 B-1B bombers loaded with Tomahawks or JASSM-ER (24 missiles) can deliver the same or much more punch as a Virginia VPM, at a platform cost of less than 1/3 that of a Virginia with VPM. The same weapons can be delivered by larger numbers of smaller attack aircraft (F/A 18, F-15, F-16, and F-35). The operating cost of the B-1B is also miniscule compared to the Virginia, with a crew of 4 per aircraft vs. 140. The B-1B can return to base and reload and launch another sortie within a matter of hours, while the Virginia needs at least a couple of weeks to return to base, reload, and get back to station. And of course, a B-1B sortie travels as supersonic or high subsonic speeds, while the Virginia can get to the firing position at only 20s or 30s knots.

        We really ought to reconsider the proper role of the SSN, which is and ought to be anti shipping (ASW and SuW), not land attack. If we returned to that strategic formulation, we could afford to build many more SSNs that would enable the US Navy to defeat the growing submarine threat, and to also counter the growing surface fleet of China.

        Note that the entire notion of using submarines for conventional land attack grew out of the end of the Cold War, when suddenly justifying a large navy fleet seemed to become a driving force. So all of a sudden land attack became a thing.

        Well, now we’ve got a real near peer naval threat to deal with for the first time in 26 years. We need to restrategize and recalibrate the fleet.

        • USNVO

          A B-1B doesn’t have a crew of 4 anymore than an SSN has a crew of 140. Those are just the people in the aircraft or sub. If you are doing any type of comparison, you need to include the cost of all the infrastructure, support personnel and equipment, training, etc.

          Even just for one strike, the B-1B requires multiple tankers and, in some scenarios, other support aircraft like AWACS and Fighter Escorts. And of course, if the SSN is already in the area, it can fire its missiles before they can even wake up the bombers crew.

          And please, get your history correct. The SSN (and surface) land attack role came about during the Cold War because of the invention of the Tomahawk missile. First as a nuclear strike option, then for conventional strikes as well. So unless you consider the 70s post Cold War, your timeline is a bit off. If the SSNs didn’t have a conventional attack capability before the end of the Cold War, how did they somehow manage to launch so many tomahawks during Desert Storm?

          Periodically looking at roles and missions and fleet structure is always good. Ignoring reality and making simplistic comparisons is not.

          • Duane

            The ability to fire land attack missiles began in the 1950s with Regulus missiles launched from diesel boats. And continued through all the earlier SSNs when Tomahawks were developed as a missile that could either be fired from a submarine torpedo tube or a vertical launch tube on a surface ship. But it was not until the later hulls of the 688s that vertical launch tubes were first added to SSNs, which was continued with the Virginia class SSNs, both being Post Cold War developments and clearly added to justifying new, ever more expensive SSNs when the Cold War Soviet submarine threat became much reduced.

            The SSGN was a result of treaty required nuke weapons reductions in the Post Cold War era, an attempt to keep the four excess Ohio class boomers relevent after stripping their nuke weapons certification. And of course many now advocate that we build a new SSGN to eventually replace retiring Ohio class boats. Neither the Virginia VPM boats or a new class of SSGNs make any fiscal sense when because we are building such expensive boats we cannot afford to build the necessary number of anti-shipping SSNs THAT WE KNOW WE NEED YET WE KNOW WE CANNOT AFFORD TO BUILD AND OPERATE PER CURRENT, OFFICIAL USN SHIPBUILDING PLANS FOR A 355-SHIP FLEET (while knowing the affordability of even that plan seems doubtful in the extreme given current fiscal realities of trillion dollar deficits that have just returned this fiscal year).

            Any no matter how sophist your reply, i.e. that simehow in your world a 4-man bomber crew isn’t the real crew .. which it IS the real crew … just as the 140 person complement of a Virginia SSN is in fact the real complement … if you are referring to maintenance support it is proportionally the same or larger difference applied to both platforms.

            Lest you misunderstand my statements to be in opposition to investing in more SSNs, my point instead is that we need to buy far MORE SSNs than the 10 Virginias with VPM now planned. We can afford to do so if we stop pretending that it makes any fiscal sense to give SSNs the land attack mission at the cost of having too few SSNs to meet the anti-shipping mission requirement.

          • Sir Bateman

            I don’t really have a dog in this fight, but I believe the first LA class boats with VLS were laid down in the early ’80s and commissioned sometime around the mid ’80s when the Cold War was still very much at the forefront.

          • Rocco

            Negative

          • NavySubNuke

            Mostly true, just off by a few years. They boats actually arrived in the early 80s – Pittsburgh and Providence.

          • Rocco

            Interesting I didn’t think VLS was on so early

          • NavySubNuke

            You are correct – Providence and Pittsburgh – awarded in 1979 and delivered in the early 80s were the first.

          • NavySubNuke

            It is interesting that in Duane world the cold war ended in the late 1970s when the Navy modified the LA class design to include VLS on Pittsburgh and Providence- both of which were ordered in 1979.
            But sure, keep thinking VLS was added post cold war to justify the cost….

          • USNVO

            Do you go out of your way to be wrong? I mean really, this is basic stuff, readily available. Did you even check?

            SSN-719 and 720, the first block II with VLS, were ordered in 1979 and commissioned in 1985. Last I checked, that was before the Cold War was over. The first two Block IIIs were ordered in 1982 and commissioned in 1988/89. Every single LA class was ordered before the end of the Cold War and with the exception of a about half the Block III, all of them were in commission before the end of the Cold War.

            For that matter, the Seawolf class was designed and the lead ship ordered before the end of the Cold War and although they didn’t have VLS tubes, they carried more weapons than the LA class even with VLS tubes.

            As to the number of crew, you are correct. That is the official crew, just not what is required to get the B-1 to its launch point or what you have to compare for crews when making decisions on how much something costs. Beyond having more crews than aircraft in a squadron, it is physically impossible for a B-1 to launch without a myriad of support from tankers, ground crew, fighter escort, etc. Getting a submarine on patrol without anybody but the crew is equally impossible. For that matter, there is a whole infrastructure to support target development, targeting, etc. So when you compare them, making simplistic comments like a B-1 has a crew of 4 when a backup aircraft and 4 tanker were required to get them to the launch point, you are not making a fair comparison.

            I could care less what the final decision is, just compare apples to apples. If a fair analysis says the Navy needs to get out of the strike missile game, so be it. If it says we need more SSNs or they shouldn’t do strike missions, that is fine too. But the cost of VLS tubes, even with the new mid body on the Virginia, is so miniscule compared to the entire cost of the boat, it really doesn’t significantly effect numbers of SSNs.

      • NavySubNuke

        Non-VPM VA’s are already as cheap as a useful submarine can be. In some ways they actually have less capability than the Navy needs and not just in terms of their limited ocean interface capability which VPM will help correct.
        Trying to build a lower cost but still useful submarine is a great way to waste billions of dollars for no real return besides congressional pork. The last thing we need is an undersea equivalent of the LCS diverting scarce dollars, resources and shipyard capacity from useful programs like VA and Columbia.