T-ATS 11 can be seen taking shape inside one of Austal USA's assembly bays on the Mobile river. The vessel is the first steel ship that the yard will deliver to the U.S. Navy. (Lawrence Specker/al.com via TNS)
(Tribune News Service) — The U.S. Navy’s Chief of Naval Operations says he saw the future of American military shipbuilding in an Alabama shipyard.
Adm. Daryl Caudle, who is the highest-ranking officer in the U.S. Navy and a deputy to Secretary of the Navy John Phelan, told defense-industry reporters this week that a tour of Austal USA in Mobile had made an impression.
He singled out two related concepts in which Austal has invested heavily: Modular ship construction and distributed shipbuilding.
In the modular approach used by Austal, big chunks of a vessel are assembled with as many of their internal components as possible already in place. Then they’re put together to form the ship. Among other advantages, this can mean that vessels are closer to completion when the hulls hit the water.
Modular construction makes it easier for multiple shipyards to contribute to a specific vessel, which is distributed shipbuilding. Austal USA provides a prime example: It has begun building modules that will be installed in Columbia- and Virginia-class nuclear submarines.
Given the general secrecy around nuclear subs, few details of that work have been revealed. Caudle gave an eye-opening account. As reported in TWZ.com:
“I was just down on the Gulf Coast to see how they build three modules there for [the] Virginia class and they’re going to start building for Columbia as well,” said Caudle, speaking during a media panel at the Surface Navy Association’s annual symposium.
“One of the main modules they build is the entire Command and Control suite for Virginia class,” Caudle said, according to TWZ.com. “And when you see that module… they had one that was almost ready to be shipped up to Quonset Point. It’s like walking into a Virginia class submarine control room. The thing is completely done, built, and the only thing that’s missing is really the computers that we put in for the sonar and fire control system.”
He said Austal’s work was taking “hundreds of thousands of man-hours” off the sub-builders’ plates, freeing them up for other work.
Austal USA's Module Manufacturing Facility 3 takes shape in October 2025, as seen from across the Mobile River. (Lawrence Specker/al.com via TNS)
There can be layers to distributed shipbuilding. In the sub work, Austal USA is the smaller yard supplying modules to industry behemoths General Dynamics Electric Boat and Newport News Shipbuilding. In a team-up announced in 2025, it’s the bigger yard outsourcing work to a smaller partner: Master Boat Builders in Coden.
At the moment, the Navy is scrambling to develop a new class of frigates. The initial program, the Constellation class, was killed off after falling years behind schedule. Now the Navy is pushing to develop a new frigate, called the FF(X) program, and to get it into service as quickly as possible.
Caudle suggested that modular construction and distributed shipbuilding could help accomplish that.
“Say that one of the yards down on the Gulf Coast starts building the frigate [as its prime contractor],” said Caudle, as quoted by breakingdefense.com. “Nothing prevents other Gulf Coast shipyards — which there are many … I want to say that [there are] probably 20 plus — can’t be in the business of building some part or whole of a module for that frigate.”
The hope is that basing the FF(X) on an established design will streamline its development, keeping costs down and speeding its entry into service. That also was the aim for the Constellation class, before design changes bloated it beyond its original parameters.
The first FF(X) frigates will be built in Pascagoula by Huntington Ingalls Industries. But it’s not unusual for the Navy to have ships of a class built at more than one yard in order to get the class into service faster. Caudle said modular construction and distributed shipbuilding could facilitate that in this case.
But he acknowledged that the process would be a “paradigm shift” for most American shipyards.
“A lot of the foreign partners that we work with and discuss how they do shipbuilding are really all-in on modularity, and we traditionally have not built ships that way until recently,” he said, as quoted by TWZ.com. “And so I think the actual methodology of the workflow within a shipyard is not completely tuned for a modular approach yet in all of our yards. Until you get there, then the fungibility of the yard to support each other won’t be there.”
Austal has invested heavily in its approach. It already has two Module Manufacturing Facilities, and it’s building a third one which leaders have said will employ around 1,000 people. In addition to that facility, called MMF3, it’s building a similarly large Final Assembly 2 complex specifically for the submarine work. The company has said the two new facilities represent about $750 million in investment.
Other shipbuilders might well have to make comparable investments to shift into modular construction. And distributed construction also has its pitfalls: Boeing famously ran into quality-control issues after it bet big on outsourcing with its 787 Dreamliner program.
While it doesn’t appear that Caudle addressed such issues in detail, he did advocate for a significant increase in defense spending. According to breakingdefense.com, he said it needs to jump from the current 3.4% of U.S. Gross Domestic Product to at least 4%. President Donald Trump has informally suggested raising it to about 5% of GDP, pushing it from about $1 trillion to about $1.5 trillion.
A request for comment from Austal USA was pending as this story was published.
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