Petters: Huntington Ingalls won't 'get too far ahead of our headlights'

By Marjorie Censer / May 31, 2018 at 2:51 PM

The two-year budget deal, which covers fiscal years 2018 and 2019, is set to boost shipbuilding funds, but Huntington Ingalls is focused on whether that increase will be sustained beyond that window, the company's chief executive said this week.

Speaking at a Bernstein conference in New York, Mike Petters said the shipbuilding account has long been about $15 billion, but lawmakers have recently boosted it.

"Over the last couple of years, you've seen the Congress step in and say, 'You're right, it does have to be bigger.' They've had large authorizations, large appropriations to support programs, especially mature programs that are in production," he said. "But if you're going to go and actually change the size of the Navy and make it 20 percent larger, this two-year opportunity can't end, you have to have a sustained commitment to a number that's higher than $15 [billion]."

"If it's going to be sustained higher than $15 [billion], then . . . the industry's going to have more revenue and it's going to expand along those lines," Petters added. "Now, the question is really is this two-year window kind of like the rat in the snake or is it actually going to be the precursor to something more substantial?"

He told investors at the conference Huntington Ingalls is not operating as if increased funding will continue.

"We've tried to just step back," Petters said. "We're not a company that's going to get too far ahead of our headlights here."

He noted that sequestration remains law and that he continues to have concerns about how the Navy will pay for the Columbia-class submarine program.

"Columbia is going to get built," Petters said. "The question is what does it crowd out."

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