Austal Featured in The Economist

Austal, a repeat Gray Construction customer, was featured in an article on The Economist’s website. The article describes Austal as a company primed for real growth and success. Austal plans to more than double their number of employees by 2017 under an expansion plan that sees them adding around 130 employees each month for the next two years. The Economist focuses on international politics and business news and opinion.

Gray Construction, ranked 6th among the U.S. Top Manufacturing Plant Contractors, designed and built Phase One of Austal’s 442,667 s.f. Modular Manufacturing Facility (MMF) used to produce the Littoral Combat Ship (LCS) and the Joint High Speed Vessel (JHSV) for the U.S. Navy in Mobile, Ala. In 2011, Gray was tapped again to design and build Phase Two of Austal’s MMF and new three-story 108,000 s.f. office complex in Mobile, Ala. Phase Two of the MMF will double the existing manufacturing floor space to 700,000 s.f. and add 30,000 s.f. of office space.

If you have manufacturing plant construction needs or are interested in additional Austal project information, please contact Chris Allen, Executive Vice President at callen@gray.com.

Please see below for The Economist article.

Small is the new big in naval shipyards

The naval ships under construction in Austal’s yard on the Mobile River in Alabama are only small by military standards: the littoral combat ship (LCS) is 127.1 meters long, with 76 berths and room for 210 tons of cargo. It is designed for mine hunting, anti-submarine warfare and surface-warfare close to shore. The joint high speed vessel (JHSV), which will ferry troops and equipment, is 103 meters long with 312 seats and room enough on the top deck to park a helicopter. The contracts Austal won from the United States Navy do not seem small either: $3.5 billion in late 2010 to build 10 LCSs, and roughly $1.6 billion to build 10 JHSVs. (By way of comparison, Nimitz-class aircraft carriers, of which the navy has 10, are nearly 333 meters long and cost $4.5 billion each.) To the navy, these small ships are a big deal: 27 of the 55 new battle-force ships the navy plans to build between now and the end of FY2016 are either LCSs or JHSVs.

They are a big deal to Austal, too: in 2009 the company employed just over 1,000 people at its Mobile shipyard, mostly in manufacturing. Today that number stands at just over 2,100. By 2017 Austal plans to more than double that number under an expansion plan that sees them adding around 130 employees each month for the next two years. The navy also contracted with Marinette Marine, a shipyard in north-east Wisconsin, to build LCSs of a different design. After laying off 180 employees in December, it has rehired most of them and plans to begin expanding later this year.

Marinette and Austal share more than just a sizeable naval contract. Both are foreign owned: Fincantieri, an Italian shipbuilder, bought Marinette in 2008, while Austal’s Mobile facility is its first outside its native Australia. But while Marinette has been building military vessels for decades, Austal mainly builds commercial craft. Its JHSV takes design elements from its passenger ferries (and like them is made of aluminum rather than steel). Its 34,000 square meter modular manufacturing facility in Mobile is lean and efficient: rather than building ships keel-up, in the traditional manner, it builds in an assembly-line fashion that will eventually be able to crank out two JHSVs and two LCSs each year. It’s becoming a naval contractor is, in the words of its sales and marketing chief, Craig Hooper, “a Cinderella story… We are not a typical defense contractor.”

Austal may not be a Raytheon or a General Dynamics, but in the world of military shipbuilding Mr. Hooper’s statement is not as true as it once would have been. The dominance of the traditional “Big Six” yards- Bath Iron Works in Maine, the Electric Boat company in Connecticut, NASSCO in California, Newport News Shipbuilding in Virginia, Ingalls Shipbuilding in Mississippi and Avondale Shipyard in Louisiana (which is scheduled to close by 2012)- is fading. Between now and 2013 the number of ships commissioned from mid-tier yards, such as Austal and Marinette, is projected to rise, while the number commissioned from the Big Six is forecast to fall. The bigger yards will continue producing the navy’s largest and most complex ships- aircraft carriers and submarines- but how many of them they can build in an era of American budgetary austerity is an open question. Between 2009 and 2011 the navy decreased the numbers of both carriers and submarines in its 30-year shipbuilding plans. The little guy’s day is dawning.