HII exceeds annual hiring goal with over 5,000 new personnel

By Nick Wilson  / November 2, 2023

Shipbuilder HII has exceeded its annual hiring goal with over 5,000 new hires through the third quarter of 2023, according to company executives, who said they are still working to improve retention rates.

“We have hired nearly 5,400 craft personnel year-to-date through the third quarter, which puts us 8% ahead of our full-year plan of approximately 5,000,” Chief Executive Officer Christopher Kastner said today during a quarterly earnings call with Wall Street analysts.

“We have work to do to improve our retention rate, and the shipbuilding teams are laser-focused on addressing this challenge. Retention and attendance and the acceleration of workforce development will remain a consistent focus area for us going forward,” he continued.

It generally takes three to five years for a new hire to be fully trained to perform at an optimal level, Kastner said, but HII is utilizing new “digital shipbuilding” tools at its Newport News shipyard that may be able to accelerate this timeline.

HII recorded record third-quarter revenues of $2.8 billion -- an increase of 7.2% over the third quarter of 2022 -- driven largely by growth within its Ingalls Shipbuilding and Mission Technologies business segments.

The company tallied $5.4 billion in new contracts across the quarter, including a construction contract awarded to Ingalls for seven additional Arleigh Burke-class destroyers, a $528 million award to Newport News for aircraft carrier maintenance and a $347 million Mission Technologies contract for Lionfish Small Unmanned Undersea Vehicle production.

However, Kastner acknowledged that delivery of the future Ford-class aircraft carrier Enterprise (CVN-80) is now expected to occur approximately 12 months behind schedule. He attributed the delay to supply chain disruptions caused by the lingering impacts of the COVID-19 pandemic.

HII and the Navy are working to mitigate this delay and minimize its impact on construction of the next carrier, Doris Miller (CVN-81), by using “innovative build techniques,” he said. The delay will not have a negative impact on the company’s financial performance, he added.

The company is also continuing its efforts to keep the Columbia-class submarine program on schedule while improving delivery rates of Virginia-class submarines. HII collaboratively builds both submarine classes with General Dynamics, which listed continued supply chain problems as a significant challenge during its own earnings call last week.

Kastner said he views the AUKUS security partnership as an “opening of markets” that can expand business to the U.K. and Australia but said he does not expect supplemental funding supporting AUKUS implementation to have a near-term impact on HII’s financial picture.

“We think in the short term here, it's really not material financially. But funds could flow next year in important areas like workforce development, supply chain assessment, infrastructure support,” he said. “We're following the Navy's lead on this, and they absolutely are being very methodical in how they think through this but we're standing ready to support them.”