As Austal USA’s final Littoral Combat Ship takes shape, a top company executive says the shipyard is on the verge of a huge growth surge that will add 2,000 new workers to its labor force and a third giant assembly building to the Mobile waterfront.

A keel-laying ceremony was to be held Friday, June 16, for LCS-38, the future USS Pierre. Like a christening or a commissioning, a keel-laying is a symbolic milestone on a ship’s creation and entry into service. The keel for LCS-2, the future USS Independence, was laid in January 2006, and since then it and other such events have become almost commonplace.

But the last such event in the long run of the LCS program is hardly just another mile marker. It’s an event that finds Austal stepping into a promising future that didn’t exist just a couple of years ago. The company had carved out a niche in aluminum shipbuilding, and two big Navy programs had fueled its rapid growth, with a workforce that peaked at over 4,000 and stabilized at around 3,300.

But with the end of the LCS program approaching, and the smaller Expeditionary Fast Transport (EPF) program kept alive by a trickle of new orders, that emphasis on aluminum had made it hard for Austal to compete for more big Navy contracts. It had begun to look like lean days were ahead. Larry Ryder, Austal USA’s vice president for business development and external affairs, said in the summer of 2021 that the company was aggressively chasing new opportunities, but the prospect of a workforce reduction was ahead.

During the pandemic, Austal USA invested in production facilities to manufacture steel ships, and it began winning significant jobs: Several Navajo class T-ATS towing, salvage and rescue ships, two of which are under construction now. A new Navy dry dock, which the shipyard began building just this week. Offshore patrol cutters for the Coast Guard. A deal to build Navy TAGOS-25 surveillance ships that could be worth over $3 billion. Work building modules that will go into Virginia- and Columbia-class nuclear submarines. Expeditionary Medical Ships, a small hospital ship similar to the EPFs. There also are other, smaller projects, such as sail-powered drone ships and aluminum elevator decks that will move fighters on new aircraft carriers.

“Austal has moved from one customer to six,” Austal USA President Rusty Murdaugh said in January, as the company announcing a job fair and hiring surge. “We’ve moved from building two types of ships to 13.”

At the time, Murdaugh said the goal was to add 1,200 people to a workforce that had dropped to about 2,800. Ryder said this week that the company had moved the bar higher.

“Between the surface ships and the submarine work that’s going to ramp up over the next couple of years we’re looking to add 2,000 jobs within two years,” he said, putting Austal’s current employment at 3,000.

“I think we topped out at about 4,600 or so, previously,” he said. “This will put us over 5,000 on the current plans we have now, the current backlog.”

They won’t be cramming all those folks into the same facilities. Austal has purchased two new plots of land, Ryder said. One is adjacent to Austal’s Vessel Completion Yard, waterfront property south of Austal’s main facility, where LCSs and EPFs sit parked after leaving the two giant assembly bays on the Mobile River across from downtown. At that site, a third assembly hall will soon rise. Ryder said it’ll be somewhat bigger than either of the first two.

Farther south, to the south of Alabama Shipyard, Austal will build a production facility that will be used mainly for the submarine work, Ryder said.

It’s not that long ago, Ryder acknowledged, that “We were trying find out how we can prevent laying 1,000-plus people off.”

“It is kind of gratifying as a company that we were able to really turn things around and add the steel panel line and win work,” he said. “The workforce has transitioned over from a workforce focused on two constant, routine programs, to some extent, to a lot more uncertainty, a lot more change. They’ve really adapted well. It’s a good feeling, that the company has some solid legs and we don’t have to lay people off.”

The growth brings issues of its own, though.

“If you take a minute to step back and look it’s kind of neat,” Ryder said. “With that said, we’ve got to make sure we’re still charging so we don’t get in that position again. You take your foot off the gas and a couple of years down the road you’ve got a valley that you didn’t see coming.”

“We’ve got a pretty good backlog now. It’s created some challenges on the scheduling side,” said Ryder.

“We’ve got a bit of a challenge on infrastructure with the I-10 bridge, we’re going to lose a plot of land we were intending to put a building on,” he said. “We’re working with ALDOT and the state to try to resolve that.”

“That’s a concern,” he said. “We’re hoping we can get to a resolution with the state in the near term.”

It’ll be challenge “just getting that many people in and out of the yard on a shift change,” he said. But that’s a good challenge to have.

One slightly poignant aspect of all this is that aluminum shipbuilding work, once Austal USA’s bread and butter, has uncertain prospects at the moment. There are two more LCSs to deliver, and the remaining EPFs and the Expeditionary Medical Ships will be aluminum. But the majority of the new work is in steel.

But in a world where the possibility of conflict with China is a concern, the reality is that there probably won’t be another aluminum warship akin to the LCS.

“The world as it stands today, the Navy I don’t think would look at another big aluminum program past the EMS,” said Ryder. “We’re certainly looking at, at what point do we convert over to another steel line.”

Ryder said he thinks Austal will never give up its aluminum capability entirely. For example, the Offshore Patrol Cutters are steel ships with an aluminum superstructure, and other future programs may use a similar approach.

For now, it’s all about the possibilities.

“We’ve got some neat things ahead of us,” he said.

Related:

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