Over a century after delivering its first two gunboats to the U.S. Navy, the nation’s oldest full-service shipyard is facing the latest challenge in its long and tumultuous history. Bath Iron Works, the biggest industrial employer in Maine, has learned that its Navy customer wants to end production of the Arleigh Burke class destroyer–its core franchise. BIW isn’t the only shipyard building Burkes, but unlike competitor Huntington Ingalls Industries, destroyers are the only type of warship Bath builds. Having lost a competition to build the Navy’s next-generation frigate, Bath has two options going forward: win the competition to build a Burke replacement, or somehow keep the Burke in production. The only other possibility on the horizon, although hardly an option for management, is to proceed to an orderly shutdown. The Maine congressional delegation will work to keep the Burke in production, presumably with upgrades that obviate the need for a successor. However, anyone who knows the history of BIW realizes that such crises crop up periodically, and survival in the shipbuilding industry is not assured. I have written a commentary for Forbes here.
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