Huntington Ingalls Industries CEO Christopher Kastner told investors Thursday that wage increases that went into effect on June 16 for skilled trades and other workers have helped attract and retain experienced talent.
“If we can hire more experienced people that are going to stay, then your efficiency is going to get better very quickly, and you can afford to not hire as many people because you're not losing as many,” Kaster said during a call to announce the company’s second quarter earnings.
The company has hired 2,400 people since April, most of them at the Newport News shipyard now building the new Ford Class aircraft carriers. The lack of experienced workers has been one of the reasons for production delays.
The carrier USS Kennedy was supposed to be delivered to the Navy in July. It is now scheduled for March 2027. Out of the 2,615 compartments, 90 are left to be finished. The carrier will begin sea trials at the end of the year, Kaster said.
The next carrier in production, USS Enterprise, has also been delayed by supply chain problems that began during COVID. Kaster blamed some of the delay on engine room components which arrived late. The remaining delayed engine room components should arrive within months.
The Department of Defense continues to review the pact between the United States, Australia and the United Kingdom to build Virginia class submarines. Newport News is one of only two outlets in the U.S. which builds the fast attack subs. Tearing up the AUKUS agreement would impact HII’s bottomline, but the company doesn’t believe that will happen, Kaster said.
“There is a Pentagon review going on, and I think that's healthy,” Kaster said. “They need to look at it to make sure that we're proceeding down the right path. But I fully expect it to continue to be supported across all three countries.”
The company has seen delays in awarding contracts because of the Department Of Government Efficiency (DOGE), but the impact is expected to be off-set by new government spending on shipbuilding, Kaster said.
The industrial base has been expanding, helped along by recent bills passed by Congress and anticipating more ships will be included. The 2026 defense bill is also expected to be close to $1 trillion, and include more new ships, he said.
HII reported contract awards of $11.9 billion in the second quarter, which included two Navy destroyers, Virginia class submarines and an amphibious landing dock, which carries Marines. The contracts covered the higher wages for shipyard workers.
