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Shipbuilder Electric Boat in Groton is proving again to be the exception as the U.S. Navy faces another hurdle in its massive effort to rapidly rebuild the U.S. nuclear submarine fleet: workforce retention.
Electric Boat, the Pentagon’s prime contractor on the strategically important Columbia and Virginia class submarine programs, has managed to retain 89 percent of new recruits while hiring at an unprecedented annual rate that has hit 5,000 in recent years.
The EB retention rate is a stark contrast with other shipyards where turnover among first year hires has exceeded 50 percent — a number that threatens efforts to restore a manufacturing base and a submarine fleet that have shrunk and aged as a result of post Cold War production cuts.
Submarine production has become a Pentagon priority because of growing U.S. and allied concerns over China’s rapid naval expansion and its aggressive moves in the Indo-Pacific.
A top Navy procurement officer told Congress last week that attrition has become an obstacle to the service’s multi-billion dollar efforts to rebuild the submarine industrial base and the diverse supply lines that feed it, without either of which the service cannot meet production goals.
A massive recruitment drive paid for by the Navy and industry generated more than 2 million job applications and nearly 10,000 new hires in fiscal 2023, acting Naval Undersecretary Brett Seidle told a U.S. Senate Armed Services subcommittee last week. But he said 50 to 60 percent off he hires quit after working less than a year.
Seidle said the reasons new hires are leaving work is money.
As shipyard production has plummeted since the 1980s, so did manufacturing jobs, dropping from 35 to 12 percent of the U.S. workforce. At the same time, salaries in non manufacturing jobs became competitive. Aggravating the salary issue is a 20 percent spike in shipyard salaries that has occurred for a variety of reasons since the COVID-19 pandemic.
U.S. Rep Joe Courtney, D-2, who’s district covers Electric Boat, said Congress and the Navy are exploring a number of ways to direct more money for salaries to shipyards.
In the short term, Courtney, who oversees naval shipbuilding programs as ranking member of the House Armed Services Seapower Subcommittee, said $500 million approved in a short term defense spending measure late last year should be directed to salaries at EB and Huntington Ingalls Newport News Shipbuilding in Virginia, a secondary contractor on the Virginia and Columbia sub programs..
Looking farther ahead, Courtney said there is support in Congress and the Navy for a budgeting reform that would allow shipyards to cover salary overruns on submarines under construction by accessing contract money awarded in advance for construction of future ships.
As a measure of the importance it places on expanding the submarine industrial base, the Navy said that in the decade ending in 2027, it plans to have invested $3.5 billion in areas such as supplier and workforce development. While submarine construction has increased drastically, the number of suppliers to the industrial base has dropped to about 5,000 from the 17,000 companies in business during the last submarine construction surge in the 1980s, the Navy said.
Labor costs are increasingly important as shipyards like Electric Boat seek to replace veteran employees who retired during the pandemic while recruiting the remarkable number of new employees needed to meet ramped up Navy production goals. EB hired 5,000 in 2023 and 4,130 last year. It temporarily lowered its 2025 hiring goal to 3,050 because its suppliers have been unable to keep up with its construction pace.
An EB spokeswoman said the company now employs about 24,000 in Rhode Island and Connecticut. The company said it is striving for peak employment of 33,000, which is close to the size of its workforce when submarine construction last boomed during the Reagan administration.
Courtney said Electric Boat has avoided retention problems while salary issues are being sorted out through its participation in an ambitious government-industry recruitment and training program. Among other things, the program has expanded a manufacturing curriculum from trade schools to high schools; provided free, intensive and relatively short duration training programs for trades such as welders, machinists and electricians; and in some cases provides transportation and day care services for trainees.
Last year, Courtney said EB hired 300 new employees directly out of trade school or high school and the recruitment and training model is being imitated elsewhere in the country. He said people hired at Electric Boat know what to expect when they start.
“I think the magic, or secret sauce or whatever you want to call it, is the fact that they had people who had enough immersion in terms of what the work was really going to look like,” Courtney said. “As opposed to other parts of the country that did not use that model and which are now looking to imitate it.”
Hiring and salaries are expected to continue to rise in southeastern Connecticut for years, if not decades based on a U.S. naval modernization not seen in half a century and designed around the U.S. advantage in submarine warfare.
In addition to satisfying its own security interests in the far east, the U.S. is committed to selling from three or five of the state-of-the-art Virginia class attack submarines being built at Electric Boat to Australia under the China-inspired, AUKUS security agreement between Australia, the United Kingdom and the U.S.
The Navy wants a fleet of 66 Virginia class attack submarines, which now cost about $4.3 billion each, and a dozen Columbia class missile subs, at more than $10 billion each.
The Navy said wants Virginia class ships delivered at a rate of 2.3 a year. Late last year, Electric Boat and Newport News were building at a rate of about 1.5 a year.
