EB president says $22.2B contract provides company predictability

Groton — Electric Boat President Kevin Graney hailed the $22.2 billion contract — the largest shipbuilding contract in Navy history — inked Monday for providing predictability for the company’s 17,000 employees and the “entire submarine enterprise.”

The contract between the Navy and EB to build at least nine Virginia-class attack submarines over the next five years “is an important milestone as our nation prepares for a generational increase in submarine production,” Graney said Tuesday at a news conference at the company’s Groton headquarters.

Graney was joined at the conference by U.S. Rep. Joe Courtney, D-2nd District, and the heads of the two largest labor unions at EB,

Ken DelaCruz of the Metal Trades Council and Bill Louis of the Marine Draftsmen’s Association.

The contract includes the option to buy a 10th submarine, but that purchase is contingent on a Navy review to ensure submarine production at EB and Newport News Shipbuilding, which together build two Virginia-class submarines per year, is staying on track. The Navy has indicated it wants to build the 10th submarine by including $455 million to buy materials that would need to be purchased in advance.

The signing of the contract was delayed by 14 months due to the Navy’s concern over whether the shipyards would be able to continue to build two Virginia submarines a year, given the submarines covered under the contract will involve 25

percent more work, while also building the new Columbia class of ballistic missile submarines.

Graney, who has been on the job about two months, said Tuesday that EB and Newport News are prepared to meet that challenge. General Dynamics is spending nearly $1.8 billion to ready EB’s facilities in Groton and Rhode Island, including a new facility in the Groton shipyard to test and assemble the ballistic missile submarines.

Courtney, chairman of the congressional subcommittee with oversight of Navy shipbuilding, said the contract

“translates to more work and ultimately more jobs and hires in the region.”

“This is not a one-year blip. This is the long game as far as what this contract represents,” Courtney said.

Since 2011, EB has hired 15,000 new employees and expects to hire a similar number over the next eight years, Graney said.

On the supplier side, the company is working with its 3,000-plus suppliers across the country, most of them small businesses, to ensure they are prepared for the increase in materials that will need to be bought, Graney said.

An 85-foot section will be added to eight of the new Virginia submarines to enable them to store more weapons and deliver special operations forces, among other capabilities. That will involve more labor and add about $500 million to the construction cost, bringing the total price per submarine to $3.2 billion.

Now that the contract for Virginia submarines is signed, the focus of the Navy is on completing the contract for the soon-to-be built Columbia-class program. Courtney said the goal is to get that done by the spring, if not sooner.