U.S. Navy contractor Electric Boat is building and designing so many submarines that the company's president told a group in Connecticut on Monday it's a "terrific time" to be in the submarine business.
“Connecticut has seen strong job growth over the past few years, and this announcement by Electric Boat is no doubt great news," Gov. Dan Malloy said.
Funding for submarine programs is projected to increase from $7.2 billion in the 2016 fiscal year to more than $8 billion in 2017, Electric Boat President Jeffrey Geiger said when discussing the company's future with politicians, business executives and others at a hotel in Groton.
The Groton-based company is in a "very enviable position" with a backlog representing more than $21 billion in contracted work, Geiger said. Sixteen Virginia-class attack submarines are under contract and 10 of those submarines are currently under construction.
"All in all, it's a very positive picture for the long-term health of our business and employment prospects for the region," he said.
Electric Boat, a subsidiary of General Dynamics Corp., employs 14,100 people, mainly in Connecticut and Rhode Island. Geiger plans to hire 1,800 people in 2016 to account for attrition and more work.
Employment is projected to grow to 18,000 by 2030 to build a new class of ballistic-missile submarines.
Electric Boat is doing the design and development work for 12 ballistic-missile submarines to replace the current fleet of 14. Construction is scheduled to begin in 2021, though Geiger said some of the initial activities will start this year. General Dynamics is spending $1.5 billion to upgrade Electric Boat's facilities in Rhode Island and Connecticut over 10 years, he added.
"This program is critical to Electric Boat's future," said Geiger.
Geiger said his projections could vary slightly depending on budget decisions in Congress.
Some have been critical of the roughly $100 billion price tag to replace the ballistic-missile submarines, though Geiger and U.S. Rep. Joe Courtney said submarines have enjoyed strong support in Congress lately.
Courtney, a Connecticut Democrat, said his colleagues used to frequently ask him why the nation needs submarines. He's rarely asked that now.
"In this national security environment, submarines are our trump card," he said after the presentation.
Electric Boat's sales topped $5 billion in 2015. The attack submarine program accounts for two-thirds of the revenue.
The number of employees is expected to dip to about 12,000 between 2018 and 2020, but Geiger said he's working to get contracts for submarine maintenance and modernization work that could help retain people.
In Connecticut, Electric Boat has 471 suppliers, which have been awarded a total of $579 million in the past five years. In Rhode Island, 146 suppliers received $98 million in that timeframe, according to Electric Boat.