Issue Briefs
$22B Navy Contract Highlights Why GD’s Electric Boat Is One of The Most Valuable Franchises In U.S. Defense
December 10, 2019
By Loren Thompson
This week’s announcement that the Electric Boat unit of General Dynamics will receive the biggest shipbuilding contract in Navy history underscores the unique role that “EB” (as it is often called) plays in U.S. defense. The contract provides $22 billion for construction of nine Virginia-class attack submarines, an amount that could increase to $24 billion if the Navy exercises the option for a tenth sub.
This isn’t the first time Electric Boat has received the biggest naval shipbuilding contract ever. The $17 billion contract for the last “block” of Virginias, awarded in 2014, was also described at the time as unprecedented in size.
When you combine the latest Virginia-class submarine contract with plans for Electric Boat to build twelve Columbia-class ballistic missile subs between 2021 and 2035, it is clear that EB sites in Connecticut and Rhode Island will be thriving for many years to come. General Dynamics management estimates sales of the unit will double over the next decade.
The Columbia-class ballistic missile boats must commence production in 2021 so they can replace Ohio-class subs that begin retiring in 2027. The Ohio class hosts the most survivable leg of the U.S. nuclear deterrent, and its replacement is the Navy’s top modernization priority.
The views and opinions expressed in this issue brief are those of the author.
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Loren B. Thompson is a Senior Adviser at GPI, Chief Operating Officer of the non-profit Lexington Institute and Chief Executive Officer of Source Associates, a for-profit consultancy. Prior to holding his present positions, he was Deputy Director of the Security Studies Program at Georgetown University and taught graduate-level courses in strategy, technology and media affairs at Georgetown. He has also taught at Harvard University’s Kennedy School of Government. Mr. Thompson holds doctoral and masters degrees in government from Georgetown University and a bachelor of science degree in political science from Northeastern University. |