By Edward Lundquist
Nickolas H. Guertin served as the assistant secretary of the Navy for research, development and acquisition (ASN RDA) in the last administration. He spoke with frequent Seapower contributor Edward Lundquist just prior to the Jan. 20 inauguration.
Q: What can you tell us about the study assigned to you just after you took office? How did that help you prioritize your goals and objectives?
GUERTIN: Secretary of the Navy Carlos Del Toro gave myself and the commander for Naval Sea Systems Command, Vice Admiral Jim Downey, the assignment to conduct a “45-day study” to look at the challenges in shipbuilding and ship repair. We knew there were challenges, and that more challenges were coming. It's not like they were hidden. They were, if anything, hidden in plain sight, but the full scope of what was going on in the industrial base across the nation — including all of the shipyards, government and commercial, regardless of regions — are having huge problems. One of the biggest is with workforce retention, especially the more junior, first and second year new hire employees. It’s especially problematic that during COVID, there was a big wave of retirements. It’s hard to do shipbuilding by Zoom. So, a lot of people ended up leaving that line of work. We had what was called the “greening” of the workforce. A lot of people that didn’t necessarily have the years of supervisor experience got moved up into supervisory positions and the people who were elevated to journeyman positions didn’t necessarily have the refined skills that those positions would classically have had.
As a result, schedules slipped and the things got drawn out. As you know, most of the work we do is on fixed price-incentive contracts for shipbuilding. But the incentive is shared between the government and industry. And, likewise, when things don’t go very well, the share line only goes so high, and after that, industry has to pay any additional overruns. So, we’ve had a lot of ship building contracts that really haven’t been as profitable as industry that thought they were going to be. They need to pay their shipyard workers more than they had expected to pay them when they signed those contracts, especially before 2020.
So, we found ourselves working our way through a handful of ship construction contracts that aren’t great money makers for industry. They’re having a tough time hanging on to their people. Therefore, things are taking longer and they’re costing more. And it is actually happening outside of the shipbuilding world. It’s also happening in the aircraft and avionics and mission systems world as well. It’s a national problem, and we’re just going to have to work our way through it. But for my tenure here, we started out with an appreciation for where we were. We put a handful of action steps into place to get us to a better position. We're investing handsomely with the industrial base, not just with our ship builders, but the second-tier suppliers, because they also have been thinned out. They also are having a tough time hanging on to their employees. So, we are putting our money where it counts. We're putting management, attention and talent in the places necessary to improve outcomes.
Q: What are some of the changes you’ve implemented?
GUERTIN: I established two different new offices that I think will be particularly impactful and I expect they will be very helpful to the next ASN RDA.
Last year we got a big chunk of money for improving the submarine industrial base — not just the two prime shipbuilder companies, but the whole submarine industrial base, spread out across the supporting sector companies.
It’s all built around a very rigorously thought-out implementation plan focused on getting us to the point where we can build one Columbia-class nuclear ballistic missile submarine and two Virginia-class nuclear attack submarines a year in serial production, and be in a position where we could build two and a third Virginias to support our AUKUS commitment. That will require not only the submarine building yards to get stronger and build faster, but all of their supporting suppliers.
Our second-tier suppliers are doing their best, but there’s just not enough of them. And because we’re building at scale, we need to ramp up our production capacity. Many of our second-tier suppliers are basically sole-source providers, and that’s just not healthy. We need competition and we need more options to get the work done. And we’re investing as a nation in the industrial capacity for building submarines at a pretty healthy level.
We got this funded and we executed with excellence to get that money into the hands of the actors that could ramp up and improve the industrial base.
To manage this, I created the Maritime Industrial Base (MIB) program office, led by a Direct Reporting Program Manager. While we were initially targeting submarine production, we realized a lot of what we were doing was also beneficial to the surface domain, and in fact, many aspects of defense manufacturing. So, we’re looking at the entire shipbuilding enterprise.
We developed five lines of effort for improving shipbuilding: infrastructure, strategic outsourcing, supplier development, workforce development and manufacturing technology.
The first one targets the actual shipbuilding infrastructure, which includes the facilities already building ships for the Navy — both commercial and government yards.
The largest part of the effort is going to strategic outsourcing and supplier development. For example, we are doing submarine module construction outside of the submarine building yards. Austal USA is doing some work for Electric Boat at the Austal facility in Mobile, Alabama. W International started doing modules for Huntington Ingalls, which has since acquired them. These modules are fabricated and then shipped to the assembly yards where they are fit into the hull. Those yards can apply those skills and tools to build surface ships as well.
The supplier development piece is improving capacity and resilience at the second tier of the supply chain. This will improve competitive alternatives; strengthen throughput capacity so that they can build more things faster to feed the pipeline; and to be able to build their ships and submarines at pace.
The next component is workforce development. We need basically 10,000 skilled trades and craftspeople now, and an additional 10,000 annually at a minimum. That’s just a minimum. We actually need more than that. But I’m just going to put that number out there. We need 10,000 more shipyard workers, and shipyard supporting service and subcontractor workers — everything from people who are cutting the sheet metal, the bending the pipe and building the cables, to the people who make the laser-cutting machines and overhead cranes and calibration systems that they use in the shipyard, to the people who make and support the computer systems and sensors and weapons that go inside the ship. Together these help to make submarines and surface ships. That’s a whole lot of people every year for 10 years, and that doesn’t necessarily address the need to retain the people we’re hiring. You can’t put your finger in a specific company and say ‘Those guys aren’t doing this right.’ This is not just a Navy problem. It’s a national problem.
Those big numbers are why we have a big outreach effort. It’s why you see the ‘Build Submarines’ ads on NASCAR and along the third base line at Fenway. It’s part of our effort to try to attract people to those trades. We’re attracting people from the service industry who are finding fulfillment in actually creating things and doing so for a higher purpose that you don’t get out of working in the service industry.
So, we have that as a value proposition, but people still need to be paid well and treated well in order to stay. If we can get people to stay in ship building and manufacturing and industrial work past the second year, they tend to stick it out.
Q: Are all five lines of effort having an impact?
GUERTIN: Yes, but shipbuilding doesn’t happen fast. It takes a while to build a ship and all of the mission systems that go into it. That said, the progress is real.
Q: You are also responsible for aviation systems. What can you tell us about the F-35 and other aviation programs for the Navy and Marine Corps?
GUERTIN: F-35 has been a very successful program. They are amazing aircraft. We’ve built more than a thousand of them.
We’ll probably end up building close to 5,000 based on the needs of the U.S. Air Force, Navy, Marine Corps, partner nations and other customers. It’s got a lot of software, amazing sensors, and we’re going to continue to drive new capability into the aircraft. The F-35 B and F-35C represent a great capability for the Navy and Marine Corps to fly off of our aircraft carriers and our big-deck amphibs. I think I made an impact on that program, especially in helping them work their way through some of their software development issues they were having and to prioritize what things needed to be included in the next technology refresh.
We’ve been looking at collaboration between manned and unmanned tactical aircraft. We don’t have an unmanned aircraft that could do the job of the fighter yet, so we will keep building manned fighter jets. But we’ll continue to investigate collaborative combat aircraft in partnership with the Air Force.
Q: What can you tell us about the Replicator Initiative?
GUERTIN: The Replicator Initiative has been helpful for the department to stretch its intellectual muscles, and look for things that were producible, could be made at scale, and that would have significant impact in the war fighting environment. We’ve been looking at how to make unmanned faster and more affordable.
We’re doing a lot of interesting work on automating testing, especially for software or cyber physical systems. We’re looking into how to use autonomous systems to help with test and evaluation, for instance, and how to make sure we can deliver capability faster by taking advantage of AI and other ways of automating processes. We just don’t have enough people to do all the testing required, and our systems are more and more complex, so having complex ways of testing our systems that can do it faster will be extremely important. By using automation for designing, developing and testing our systems will help to ensure we are building and fielding robust, battle-ready systems.
Q: What can you share with us about innovation?
GUERTIN: Innovation is a huge part of what we do. I’m particularly enthusiastic about the Naval Innovation Center at the Naval Postgraduate School in Monterey, as well as the NavalX TechBridges we have around the country to find new and exciting technologies and concepts. NavalX is one of those entities that helps us open up our perspective on how we might do our work better. Innovation also encompasses the Navy laboratories and warfare centers — they’re always looking for new and better ways to do things. I used to work at Navy labs, and I know that I was innovating. I was trying to change things and improve what I did as a part of normal, everyday work. But we do need those edgier environments to help us break out of places where we might not see opportunities. I expect our innovation ecosystem in the Navy and Marine Corps to deliver great things.
