Good Week for Warship Builders on Trump Calendar

Littoral Combat Ship under construction at Austal USA shipyard, in Mobile

President Donald Trump is scheduled to make a speech Thursday in Marinette, Wisconsin, at Fincantieri Marinette Marine, the shipyard that recently beat Mobile-based Austal USA for a $795 million contract to build the first in a series of newly designed Navy frigates.

Trump is expected to announce a $200 million Department of Defense investment in the Wisconsin shipyard, as well as noting the 1,000 new jobs the frigate contract will bring, according to the NBC affiliate in Marinette, WMTV.

Alabama’s Austal shipyard, however, is not being left entirely in the wake of its Wisconsin rival for the frigate prize.

Just this week the Pentagon announced a $50 million investment in the Austal shipyard in Mobile. Matched by $50 million from the company itself, the new capital will be directed at equipping Austal to build steel-hulled Navy vessels.

The DoD investments in the Austal and Fincantieri Marinette Marine shipyards are through the Defense Production Act Title III Agreement, which authorizes the president to bolster the capacity of private contractors in order to maintain national defenses.

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The shipyard investments would be executed over the next 24 months, according to the Australian Financial Review, which reported, “Austal said the investment agreement with the DoD was part of the U.S. national response to Covid-19 aimed at maintaining, protecting and expanding critical domestic shipbuilding and maintenance capacity.” Austal is prepared to match the DoD’s $50 million, the Review reported.

Austal has been proficient at building aluminum-hulled Littoral Combat Ships for the Navy, vessels that are especially light and speedy, designed for coastal missions. But the Navy in the last 10 years has called for heavier warships for fleet support. Fincantieri Marinette’s steel-hulled design was seen as a winning advantage over Austal’s proposed aluminum-hull frigate.

“Goldman Sachs noted the US Navy didn’t have a lot of shipyard options outside Austal and said this would drive support for the company as a critical supplier armed with greater bidding flexibility through the addition of steel capability,” reported the Review.

Alabama’s Austal USA currently has Navy contracts to build Littoral Combat Ships and expeditionary fast transport vessels through 2024.

Trump can be expected to hail the DoD’s investments in Fincantieri Marinette Marine and Austal as part of a White House determination to bolster U.S. defenses. “The slow depletion of our military in recent years has resulted in an escalation of threats the world over,” proclaims a White House webpage.

China, among others, has been the recipient of gunboat warnings by the president in recent years, particularly in the South China Sea, where Austal USA’s parent company, Perth, Australia-based Austal Limited, has been prospecting a strategic acquisition.

According to the Australian Financial Review, Austal and a U.S. private equity firm partner are in negotiations for the purchase of a shipyard facing the South China Sea — the Hanjin Heavy Industries shipyard on Subic Bay in the Philippines.

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