Latest news with #Columbia-class
Yahoo
a day ago
- Business
- Yahoo
Hegseth orders Pentagon's testing office staff cut by more than half
The Senate Armed Services Committee's top Democrat is blasting Defense Secretary Pete Hegseth over his decision this week to appoint a new director of the Pentagon's operational test enterprise and rapidly cut its staff by more than half. Hegseth said his directed reorganization, which would reduce the staff, budget and resources at the Office of the Director of Operational Test and Evaluation (DOT&E), supports the Defense Department's 'America First' strategy, according to a Tuesday memo. But Sen. Jack Reed (D-R.I.) said Thursday the move is 'reckless and damaging' to military accountability and oversight. 'For decades, DOT&E has played a vital, legally mandated role in safeguarding the integrity of major defense programs and ensuring military systems are effective before they are put into warfighters' hands,' Reed said in a statement. He said Hegseth has given no logical reasoning for this action, and he is worried the move 'appears retaliatory, driven by Mr. Hegseth's opposition to some of DOT&E's recent, legally required oversight decisions.' The Pentagon chief's change up of the DOT&E will see its staff of 94 personnel — including 82 civilians and 12 service members — axed back in seven days to just 30 civilians, 15 military personnel and one senior leader, the newly appointed acting Director Carroll Quade. Quade, who was up until now the Navy's deputy for test and evaluation, takes over from Raymond O'Toole, who has served as acting director of the office since January and twice as an acting deputy director since January 2021. Hegseth also ordered all contractor personnel support to end within seven days of the memo's release. The Pentagon chief justified the cuts by claiming an internal review 'identified redundant, non-essential, non-statutory functions within ODOT&E that do not support operational agility or resource efficiency, affecting our ability to rapidly and effectively deploy the best systems to the warfighter.' He estimated the changes will save more than $300 million annually. The Defense Department's test and evaluation office is in charge of validating weapons and platforms across the U.S. military, setting policies, providing oversight and publishing annual testing updates on such major weapons programs as the F-35 fighter jet, the Long-Range Hypersonic Weapon and the Columbia-class submarine. But cutting the office back to a skeleton crew with limited contractor backing may prevent it from providing adequate oversight for critical military programs, 'risking operational readiness and taxpayer dollars,' Reed said. 'This kind of politically motivated interference undermines independent oversight and leaves warfighters and the public more vulnerable to untested, potentially flawed systems,' he added. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
The Hill
a day ago
- Politics
- The Hill
Hegseth orders Pentagon's testing office staff cut by more than half
The Senate Armed Services Committee's top Democrat is blasting Defense Secretary Pete Hegseth over his decision this week to appoint a new director of the Pentagon's operational test enterprise and rapidly cut its staff by more than half. Hegseth said his directed reorganization, which would reduce the staff, budget and resources at the Office of the Director of Operational Test and Evaluation (ODOT&E), supports the Defense Department's 'America First' strategy, according to a Tuesday memo. But Sen. Jack Reed (D-R.I.) on Thursday said the move is 'reckless and damaging' to military accountability and oversight. 'For decades, DOT&E has played a vital, legally mandated role in safeguarding the integrity of major defense programs and ensuring military systems are effective before they are put into warfighters' hands,' Reed said in a statement. He said Hegseth has given no logical reasoning for this action, and he is worried the move 'appears retaliatory, driven by Mr. Hegseth's opposition to some of DOT&E's recent, legally required oversight decisions.' The Pentagon chief's change up of ODOT&E will see its current staff of 94 personnel – including 82 civilians and 12 service members – axed back in just seven days to just 30 civilians, 15 military personnel and one senior leader, the newly appointed acting director Carroll Quade. Quade, up until now the Navy's deputy for test and evaluation, takes over from Raymond O'Toole, who has served as acting director of the office since January, and twice as an acting deputy director since January 2021. Hegseth also ordered all contractor personnel support to end within seven days of the memo's release. The Pentagon chief justified the cuts by claiming an internal review 'identified redundant, non-essential, non-statutory functions within ODOT&E that do not support operational agility or resource efficiency, affecting our ability to rapidly and effectively deploy the best systems to the warfighter.' He estimated the changes will save more than $300 million annually. DOD's test and evaluation office is in charge of validating weapons and platforms across the U.S. military, setting policies, providing oversight and publishing annual testing updates on such major weapons programs as the F-35 fighter jet, the Long-Range Hypersonic Weapon and the Columbia-class submarine. But cutting the office back to a skeleton crew with limited contractor backing may prevent it from providing adequate oversight for critical military programs, 'risking operational readiness and taxpayer dollars,' Reed said. 'This kind of politically motivated interference undermines independent oversight and leaves warfighters and the public more vulnerable to untested, potentially flawed systems,' he added.
Yahoo
2 days ago
- Business
- Yahoo
Hegseth directs reorg of Pentagon testing office, appoints new leader
The Pentagon has appointed a new director of its operational test enterprise and directed a reorganization that would reduce its staff to 30 civilians, 15 military personnel and one senior leader. In a Tuesday memo, Defense Secretary Pete Hegseth said the move to restructure the Office of the Director of Operational Test and Evaluation, or ODOT&E, supports the Pentagon's 'America First' defense strategy. 'A comprehensive internal review has identified redundant, non-essential, non-statutory functions within ODOT&E that do not support operational agility or resource efficiency, affecting our ability to rapidly and effectively deploy the best systems to the warfighter,' Hegseth said. The Defense Department estimates the changes will save more than $300 million annually. The Pentagon's test and evaluation office oversees the process for validating weapons and platforms across the Defense Department. While the military services have their own test teams, the DOD-level office sets policies, provides oversight for major programs and serves as an adviser to the Joint Requirements Oversight Council, among other responsibilities. One of the office's more public-facing tasks is publishing an annual testing update on the department's major weapon systems, including the F-35 fighter jet, the Navy's Columbia-class submarine and the Army's Long-Range Hypersonic Weapon. The report also assesses the health of the test and evaluation enterprise, including its equipment, ranges and other testing facilities. The most recent report was released in January. Raymond O'Toole has served as acting director of the office since January, following two prior tours in the acting role. The memo appoints Carroll Quade, currently the Navy's deputy for test and evaluation, to perform the duties of ODOT&E director effective immediately. 'Mr. Quade will assume all duties of the Director, overseeing the transition and ensuring ODOT&E's statutory requirements remain effective and in compliance with statute,' the memo states. The personnel cuts will come through a 'targeted, deliberate and expeditious' civilian reduction in force, according to the memo. RIF notices will be distributed early next week and personnel who are not retained will be placed on administrative leave. All leadership currently classified as senior executive service will also be put on leave. ODOT&E civilians who are employed by one of the military services will transfer back to those offices. The department did not provide details on how many civilian and military personnel currently reside within ODOT&E and it's not immediately clear how many positions the Pentagon plans to eliminate. Beyond the workforce reductions, Hegseth calls for ending all contractor personnel support within seven days of the memo's release. 'If ODOT&E decides it needs to support contractor personnel after adjusting to its base statutory mission set, ODOT&E may request such contract support with Deputy Secretary of Defense review after an initial 60-day acclimation period,' the document states.
American Military News
01-05-2025
- Business
- American Military News
US Navy awards Connecticut's Electric Boat another $12 billion for salaries, 2 submarines
The U.S. Navy announced Wednesday that it has awarded another $12.4 billion to General Dynamics Electric Boat as payment for two previously authorized Virginia-class submarines, as well as salary increases for shipyard workers. The Navy's agreement to boost pay comes as Electric Boat hires at unprecedented levels in an effort to meet aggressive Pentagon goals for modernization of the U.S. nuclear submarine fleet in the face of China's rapid naval expansion and its aggressive moves in the Indo-Pacific. U.S. Rep. Joe Courtney, ranking member of the Seapower Subcommittee of the U.S. House Armed Services Committee, called the money for wages 'a welcomed development for our effort to hire and retain a highly-skilled shipyard workforce in southern New England.' 'From the standpoint of the U.S. House Seapower Subcommittee, the ability of the submarine industrial base to successfully execute production of Congress' submarine building plans depends on growing a new generation of shipbuilders,' said Courtney, a Democrat whose eastern Connecticut district includes Groton and Electric Boat. In addition to the salary money, the contract award includes billions of dollars more for completion and modification of two submarines approved in last year's budget. 'It provides Electric Boat with the funding to build two more Virginia class submarines and builds on a record backlog of work already in the queue at the Electric Boat shipyard to respond to the contested environment across the maritime domain,' Courtney said. The shipyard has been hiring at a furious pace – 5,300 in 2023, 4,100 in 2024, and another 3,000 projected this year – to meet the Navy's production schedule. In addition to the nuclear-powered Virginia class attack submarines, EB is building the massive nuclear-powered Columbia-class ballistic missile submarines, which the Pentagon has made its priority project. The Navy wants more than 60 Virginia submarines at more than $4 million each and a dozen Columbias, which cost more than $9 million a ship. The U.S. has also agreed to sell at least three Virginia class submarines to Australia under a security agreement intended to contain China. In a letter to Courtney Wednesday, Secretary of the Navy John C. Phelen underscored the Pentagon's commitment to hire and retain the workforce needed to sustain submarine production. 'I appreciate the continued congressional support to fund the highest priority and near-term needs of our nuclear shipbuilders to improve productivity across our submarine and carrier production lines,' Phelen wrote 'These investments you made, which are included in the contract, will increase capacity, enhance capabilities, and help grow the skilled workforce needed to support new construction nuclear shipbuilding efforts and our maritime industrial base.' The salary money sent to Electric Boat amounts to a recognition that the Navy needs to rejuvenate a moribund national manufacturing base if it is to be successful in harnessing the supply chain necessary to meet production goals. While Electric Boat has been a leader in the hiring and retention of shipyard workers, it has reached a contract impasse with its marine draftsman's union, which is threatening to strike. The Navy salary money is likely to become a factor in those talks. Courtney has been pushing the Navy to adopt measures to expand what has become known as the submarine industrial base. In the short term, Courtney 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 has advocated 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. ___ © 2025 Hartford Courant. Distributed by Tribune Content Agency, LLC.
Yahoo
09-04-2025
- Business
- Yahoo
Huntington Ingalls Industries, Inc. (HII): A Bull Case Theory
We came across a bullish thesis on Huntington Ingalls Industries, Inc. (HII) on Substack by Student of Value. In this article, we will summarize the bulls' thesis on HII. Huntington Ingalls Industries, Inc. (HII)'s share was trading at $187.54 as of April 8th. HII's trailing and forward P/E were 13.43 and 13.18 respectively according to Yahoo Finance. Photo by Michael Afonso on Unsplash Huntington Ingalls Industries (HII), the largest military shipbuilder in the U.S., has entered a pivotal phase following over a decade of evolution since its 2011 spin-off from Northrop Grumman. The company operates through three core segments—Newport News Shipbuilding, Ingalls Shipbuilding, and Mission Technologies—each playing a distinct role in the U.S. defense industrial base. Newport News, a critical national asset as the only producer of U.S. Navy aircraft carriers and one of just two nuclear submarine builders, remains the company's backbone, though it recently posted a 4% revenue decline due to labor shortages and cost overruns on the Virginia-class submarines. Ingalls Shipbuilding, known for its construction of surface combatants, remains operationally stable with six vessels underway but is facing declining demand in the amphibious category. The most dynamic segment is Mission Technologies, which has rapidly gained momentum since the 2021 acquisition of Alion Science. With a focus on cybersecurity, artificial intelligence, and defense systems, Mission Tech has grown 19% year-over-year, now contributing 25% of revenue and expected to reach 30% by 2027. Despite this internal growth engine, HII's stock has suffered a 45% decline, largely driven by deteriorating margins on fixed-price contracts signed prior to the inflation surge, compounded by continued labor and supply chain headwinds. In Q4 2024, operating margins dropped sharply from 10.4% to 3.4%, raising investor concerns. Management, however, remains confident in a recovery, guiding toward 7.5–8% margins by 2026 through renegotiated Navy contracts and targeted workforce expansion. The company is concurrently executing a $4.1 billion shipyard modernization program aimed at reducing labor reliance and enhancing productivity through automation over the next decade. Strategically, HII is well positioned within the Navy's long-term vision of a 355-ship fleet, even as short-term headwinds persist. Its $48 billion backlog, spanning 43 vessels, provides long-term revenue visibility, and flagship programs like the Columbia-class SSBN—totaling $120 billion—anchor its future pipeline. However, the FY2025 Navy budget has dampened short-term sentiment: only six new ships will be funded (versus the 10–11 required annually), while 19 are scheduled for decommissioning, shrinking the fleet to 287 ships. Compounding matters, the submarine industrial base remains constrained, unable to consistently deliver two Virginia-class submarines annually, averaging only ~1.3 since 2022. Fixes, including increased outsourcing, industrial subsidies, and new workforce initiatives, are expected by 2028. A critical emerging trend is the Navy's shift toward unmanned underwater vehicles (UUVs), which are projected to comprise 30–50% of undersea operations by 2040. These drones excel in intelligence, surveillance, reconnaissance, mine clearance, and sabotage, often deployed from manned platforms like Virginia-class submarines. HII, with its unique dual exposure to both manned submarines and growing investments in unmanned technologies, stands to benefit from this evolving naval doctrine. While UUVs can't replace the strategic deterrence of SSBNs, they offer scalable and cost-effective solutions that align with shifting Pentagon priorities. Financially, the company has delivered a 5.2% revenue CAGR over the past decade and returned substantial capital to shareholders, repurchasing 20% of its shares and delivering a 5–6% annualized combined return through dividends and buybacks. Yet, its 2021 acquisition of Alion for $1.65 billion in cash ballooned debt levels, leaving $2.7 billion outstanding—double its pre-deal debt. While still within acceptable ranges for a prime contractor, annual debt servicing of $150–$200 million amid rising interest rates is putting pressure on free cash flow. This pressure culminated in a recent 20% drop in stock price, following management's withdrawal of its five-year free cash flow guidance due to continued margin strain. However, recovery remains plausible. Management forecasts capex peaking at 5% of revenue (~$600 million annually) through 2026, after which it will taper to 2–2.5%. If capex and debt service are reduced post-2026 and shipbuilding margins rebound to historical levels, free cash flow could reach $600 million, suggesting an FCF multiple of 11–17x at current prices. Valuation scenarios support this upside: assuming 4% annual revenue growth and margin normalization, discounted cash flow models yield a fair value of $287 per share, while conservative relative valuation estimates place it between $250–$260. Even with risk factors such as fixed-price contract exposure, skilled labor shortages, and shifting defense priorities, HII's restructuring efforts, strategic backlog, and exposure to both traditional and next-generation naval technologies offer a compelling long-term investment case with a favorable risk/reward profile. Huntington Ingalls Industries, Inc. (HII) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held HII at the end of the fourth quarter which was 20 in the previous quarter. While we acknowledge the risk and potential of HII as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HII but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
