Exclusive: Navy secretary to stress need to revive America’s atrophied shipbuilding industry

Navy Secretary John Phelan is expected to call urgent attention to the dire state of U.S. shipbuilding and America’s fleets during his Tuesday hearing with the Senate Armed Services Committee.

While Phelan isn’t expected to give a totally bleak picture of America’s superiority on the high seas to lawmakers, he will call special attention to America’s lacking industrial capacity to support the Navy and build new ships to counter adversaries such as China, according to a copy of his remarks obtained by the Daily Caller News Foundation. China surpassed the U.S. Navy’s total ship count in 2020 with 360 ships compared to 296 in the U.S. fleet, while also pulling ahead in capacity to build commercial shipping vessels and infrastructure.

“For too long, we have allowed our shipbuilding industry to erode, hollowing out the very capacity we need to maintain credible naval deterrence,” Phelan is expected to say in his remarks. “That must change. Rebuilding our maritime industrial base is not just a matter of economic policy—it is a national security imperative.”

Naval shipbuilding in the U.S. has been plagued by massive delays, with some contractors extending their deadlines for ship delivery by up to three years. Moreover, inflation has presented a challenge for ship production, as its effects have had a disproportionate effect on the industry’s input costs, according to an April report from the Congressional Budget Office.

Additionally, the Chinese Navy has increased its aggression in recent months, conducting its largest ever naval drill around Taiwan near the end of the Biden presidency and just recently deploying two aircraft carriers to the West Pacific Ocean for the first time ever. China has engaged in a massive naval buildup over the last two decades at a pace that surprised Western analysts while raising concern for America’s sea power, according to the Center for Strategic and International Studies (CSIS).

Chinese shipyards are also more productive than their American counterparts, with 70% of Chinese warships launched after 2010 compared to only 25% of U.S. ships, according to CSIS.

Phelan previously called attention to bloat and inefficiency in the Navy’s contracting system on May 16, stating that the Navy processed a total of 217,000 contracts in 2024, with an average employee processing 34 in total. The branch’s acquisition program employs 56,000 people, meaning that the average employee processes about two contracts each month.

“General Charles Krulak aptly stated that ‘The future of an organization is in the hands of the privates in the field, not the generals back home,’” Phelan is expected to say. “Our job—my job—is to ensure they have every tool, every advantage, and every ounce of support they need to succeed.”

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