HII targets 15% throughput rise as US Navy shipbuilding race intensifies
HII, America's largest shipbuilder and the primary builder of nuclear-powered warships for the US Navy, has set out its strategy for accelerating vessel production at a congressional field hearing in California. Speaking before the House Appropriations Subcommittee on Defence, the company's executive vice president of maritime systems and corporate strategy, Eric Chewning, detailed plans to lift shipyard throughput by 15% year-on-year in 2026, following a 14% increase already recorded in 2025.
The testimony, delivered at College of the Canyons in Santa Clarita, came as the US defence industrial base faces mounting pressure to close a widening gap between the Navy's fleet ambitions and the physical capacity to deliver hulls on time. With approximately 40 vessels at HII's Ingalls and Newport News facilities either under active construction or in modernisation programmes, the stakes extend well beyond one company's production schedule.
Three pillars, one strategic imperative
HII's acceleration plan rests on three elements: workforce development, capital investment in shipyard infrastructure, and a broader distributed shipbuilding strategy. On the workforce side, the company cited new collective bargaining agreements that secured competitive wage increases, framing labour retention as inseparable from national security readiness. Chewning, a former Deputy Assistant Secretary of Defense for Industrial Policy, positioned the workforce challenge as a structural issue requiring sustained public-private coordination rather than a short-term hiring exercise.
Capital investment in infrastructure includes what HII describes as the use of "physical AI" in shipbuilding operations, a term covering robotics, computer-vision guided fabrication, and AI-assisted quality inspection on the production floor. The outsourcing component is the most striking numerical signal: HII plans to subcontract more than two million labour hours in 2026, a 178% increase on 2024 levels. The stated aim is to expand capacity beyond HII's own yards, channelling work into small and medium-sized manufacturers across the country and giving those businesses enough forward visibility to justify investing in their own facilities.
The company also highlighted its Newport News Shipbuilding Charleston Operations in South Carolina as a proof-of-concept for industrial base revitalisation, having converted an underutilised facility into an advanced manufacturing campus supporting the submarine supply chain in partnership with the state government and the Pentagon's Industrial Base Policy Office.
Convergence across defence, capital and manufacturing
The Disrupts angle here is not merely a defence-procurement story. It sits at the intersection of three converging forces that are reshaping capital allocation across industries.
First, the integration of physical AI into heavy manufacturing at this scale signals a shift in how automation investment flows. The same computer-vision and robotics stack being deployed in automotive gigafactories and semiconductor fabs is now being pulled into sovereign-critical infrastructure, defence shipyards included. This creates a cross-sector demand signal: AI-enabled manufacturing suppliers serving automotive or aerospace customers are increasingly likely to find defence procurement offices as viable, if bureaucratically complex, buyers.
Second, the 178% outsourcing surge represents a deliberate attempt to build a distributed, resilient supply chain, precisely the model that semiconductor and pharmaceutical supply chains have been under pressure to adopt since the pandemic. The geopolitical logic is identical: concentration of critical production in too few facilities is a strategic vulnerability. HII's distributed shipbuilding model is, in effect, an industrial-base hedge.
Third, for macro investors watching sovereign defence budgets, the testimony reinforces a durable theme: Western governments are committed to multi-year capital deployment into domestic manufacturing capacity, regardless of fiscal headwinds elsewhere. HII's 45,000-strong workforce and congressional testimony signal that this is structural spending, not a cyclical spike, with second-order effects for regional labour markets, vocational training ecosystems, and the broader US manufacturing capacity debate.
The near-term test will be whether HII hits the 15% throughput target by year-end. Congressional oversight, Navy delivery schedules, and the capacity of the newly expanded supplier network will all bear on that outcome.