The US President’s Office of Management and Budget (OMB) has delivered a request for $5.7 billion (AU $8.8 billion) in emergency funding to prop up the flagging production of Virginia class nuclear-powered submarines. Delivered on November 25, it also asks for an additional $1.59 billion (AU $2.46 billion) to arrest slippages in the USN’s highest priority project, the construction of new Colombia class SSBNs.
Multiple outlets including the highly respected Breaking Defense have quoted a senior USN source telling reporters:
“Our Virginia-class fast attack submarine program is not where it needs to be right now. The program and the shipyards are not producing submarines at the rate that our national security strategy and the national defense strategy require.”
This comes just a few weeks after the CEOs of the two shipyards responsible for construction of both classes warned that construction was slowing – not increasing – because of a variety of complex supply chain issues. General Dynamics Electric Boat is the lead yard, supported by Huntington Ingalls Industries. The two companies take it in turns to deliver Virginia class SSNs.
The USN official is quoted as saying approximately $2 billion would go towards addressing funding “shortfalls” for the two fiscal 2024 Virginia-class submarines and $1.5 billion would go towards a similar anticipated shortfall for the one Virginia-class boat in the FY-25 budget.
The rest of the funding would be split between submarine prime contractors General Dynamics Electric Boat and HII’s Newport News Shipbuilding for increased wages and “other productivity enhancements,” the official said.
The current rate of SSN production is averaging 1.3 per year. To meet the long-term needs of the USN itself, this must reach 2 per annum. To be able to sell second-hand submarines to Australia under AUKUS Pillar One the rate needs to increase to 2.33 in the next few years.
The consequences of the request being declining are unclear. Presumably the Republican majority will take their cues from incoming President Donald Trump. The incoming Secretary of the US Navy, John Phelan, is a financier, megadonor and art collector with no previous military experience. His views on AUKUS are unknown.
Defence Minister Richard Marles and Defence Industry Minister Pat Conroy have repeatedly expressed their confidence in the ability of the US to deliver because of the tremendous bipartisan support the project has in Congress. How this bipartisan support translates into fixing supply chain problems has never been explained.
Asked for a comment on the situation, the ASA completely ignored the slowdown in Virginia construction – the reason for the emergency request – saying instead:
“Australia welcomes the US Administration’s request to Congress to increase funding for its submarine industrial base uplift.
“This request demonstrates the bipartisan commitment in the US to uplifting its industrial base, a critical enabler for delivering AUKUS.
“Since the announcement of the AUKUS pathway in March 2023, the US Administration and US Congress have taken many steps to increase investment in the US submarine industrial base.
“Australia’s USD 3 billion (AU $4.6 billion) contribution to the US submarine industrial base will complement US investments.”
Australia is transferring a first tranche of$1.6 billion this financial year out of the promised $4.6 billion to subsidise Virginia class construction. The mechanism is opaque, but the Australian money goes to an account administered by the US Secretary of the Navy, currently Carlos Del Toro. It seems that Australia has no say on how the cash will be distributed amongst American companies.
Asked repeatedly earlier this year in Senate Estimates by David Shoebridge why the Australian gift has no refund clause, head of the Australian Submarine Agency (ASA) VADM Jonathon Mead declined to answer, saying only that the US remained committed to AUKUS Pillar One.
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I guess the next invoice is on its way to Marles about now then?
I’m looking forward to him explaining how all that bipartisan support will fix the problem.
So things are playing out exactly as expected.
It’s crazy to think that the US put its first SSN in service in 1954 and 30 years later they had built 130 nuclear powered submarines. Today they can’t even build at a third of that rate no matter how much money they are throwing at them.
It’s starts right from the building of school. What are they teaching the kids in the USA compared to China that the US struggles to train engineers but the Chinese are cranking them out like they crank out everything else.
Guess we’ll see how it all pans out.
Either way I’m not sure the RAN are going to get any Virginia’s unless the US Navy and Congress and prepared to lower their force levels lower still. And with nuclear submarines the only real advantage that the US still retains over the Chinese in any significant way, I’m just not sure it’s going to happened. I wonder how long a Collins class submarine can last for before the Hull is deemed unsafe and not able to be refitted any further?
Thanks Tom – I can’t fault your logic.