Increasing wages for shipyard workers is the top challenge when attracting and retaining everyone from pipefitters to naval architects, a naval analyst told the House Armed Services Committee on Tuesday.
For those in the trades – welders, electricians, pipefitters and shipfitters – the working conditions are “hot, cold and dirty” with wages only a couple dollars more than fast food workers, the Congressional Budget Office’s Eric Labs told the HASC.
At the same time, many shipyard workers’ cost-of-living expenses are rising faster than inflation, Labs said. He noted that the COVID-19 pandemic and remote work possibilities saw more highly paid white-collar workers moving from larger cities to more distant areas like Bath, Maine, the home of guided-missile destroyer builder General Dynamics Bath Ironworks.
Labs said that as a result housing costs in Bath are now comparable to Washington’s Northern Virginia suburbs.
The pay differential for shipyard jobs used to be three to four times greater than other occupations, but now runs between 1.2 and 1.4 times higher, said Brett Seidle, the acting assistant Navy secretary for research, development and acquisition.
Ron O’Rourke, the naval affairs analyst at the Congressional Research Service, said the workforce issue applies to white collar shipbuilders like designers, naval architects and naval engineers as well as the trades.
“These are engineers that can take other jobs,” he said.
Over the years “the Navy’s own design force atrophied,” illustrating white-collar workforce shortages as well, Shelby Oakley, the director of contracting and national security acquisitions at the Government Accountability Office, told the panel.
O’Rourke added that one way to meet workers’ cost-of-living challenges and also possibly speed ship delivery would be to move some construction functions to areas other than traditional shipbuilding and repair locations.
O’Rourke’s term for this was “federated shipbuilding.” In his prepared testimony, O’Rourke wrote: “The aim of federated shipbuilding (aka nation as a shipyard) would be to gain access to production facilities and (perhaps more important) regional labor markets in parts of the country that currently are not significantly involved in Navy shipbuilding. Federated shipbuilding could require altering ship designs to facilitate the production of ship modules in locations other than final assembly yards, and could make shipbuilding programs more complex to manage.”
The Bath yard is one of the two prime contractors for Arleigh Burke-class destroyers.
Rep. Trent Kelly (R-Miss.), the chair of the House Armed Services seapower and projection forces panel, said President Donald Trump is right to set up a designated shipbuilding office in the White House. The issues are “more than just delivery delays” of new Navy ships, but rebuilding the commercial shipbuilding and ship repair market.
Kelly, a co-author of the SHIPS Act bill introduced in the last session, said the Navy’s stated requirement need is to have 381 ships in the fleet, but at the current rate of construction the service “wouldn’t make that until 2050.”
He expects the bill to be re-introduced in this congressional session.
Oakley told the panel the Navy has “no more ships today than we did in 2003,” when the service released its first 30-year shipbuilding plan.
Instead, “persistent outcomes” in the way the Navy buys and builds ships have led to cost overruns, delivery delays and “ships that don’t provide expected outcomes,” she said.
The latest GAO report on shipbuilding noted: “The Navy’s existing budget and acquisition processes lack the schedule-driven principles found in leading industry practices, which prioritize the timely, predictable development and delivery of innovative, essential capabilities to users. … Without changes that embrace leading practices, the Navy risks not keeping pace as technological innovation provides adversaries with new ways of fighting.”
Oakley added that “the frigate program is a prime example” of those practices. The Constellation-class program is three years behind schedule. The delays and overruns can be largely traced to the Navy making drastic changes to the ship’s design. “Money alone is not the solution,” she said.
In the future the Navy should “make sure the designs are stable before building ships,” she said.
Shipbuilding demand and repair have fluctuated wildly based on Navy budgeting strategies, creating an atmosphere of feast or famine that is shrinking the supply chain. The issues and challenges have grown since the end of the Cold War and then during the COVID-19 pandemic, when shipyard consolidation worsened as skilled workers left the industry and others retired.
“The remaining prime shipbuilders and subcontractors face shortages of available skilled workers in both the trades (welders, pipefitters, electricians, etc.) and design/engineering workforce leading to schedule disruptions, delayed delivery of critical components, and associated cost and schedule challenges. The Navy faces its own challenges as well. Burdensome acquisition processes, contracts that were established prior to the COVID-19 pandemic, and shifting Navy requirements also contribute to the current situation,” reads Oakley’s written testimony.
On the workforce front, Seidle added that congressional support for boosting wages and improving shipyard conditions and facilities is paying dividends in attracting younger applicants to submarine construction. He said the industry added 9,700 workers in 2023 and another 10,000 last year.
O’Rourke, in his prepared testimony, added that nationwide advertising could work for other sectors of shipbuilding. “Similar efforts could be used to more widely advertise job openings for building surface ships. This option could raise awareness of shipbuilding jobs in regional U.S. labor markets that are distant from the shipyards that build Navy ships,” he wrote.
