General Dynamics secures Navy contract to build subs

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GROTON, Conn. (AP/WAVY) — General Dynamics says it has secured a $17.65 billion contract to build submarines for the U.S. Navy.

The company said Monday that its subsidiary Electric Boat will be responsible for building 10 additional Virginia-class submarines as part of the agreement. It plans to build two ships per year for the next five years with the help of its partner Newport News Shipbuilding, a unit of Huntington Ingalls Industries.

Construction of the first submarine will begin May 1.

Electric Boat and Newport News Shipbuilding already have delivered 10 of these submarines to the Navy, and eight additional submarines are under construction.

In 2012, President Barack Obama’s proposed budget called for only nine submarines, not 10, in the next block of Virginia-class ships.

U.S. Rep. Joe Courtney, a Democrat who represents eastern Connecticut, said the contract for the full 10 reflects the strength of arguments in favor of the strategic need for attack submarines, particularly after the loss of the USS Miami in a 2012 shipyard fire in Maine.

Electric Boat president Jeffrey S. Geiger said the award has great significance for the submarine industrial base.

“By continuing to produce two ships per year, the Navy and industry team retains the stability required to achieve increased efficiencies, providing the fleet with the submarines it needs to sustain the nation’s undersea dominance,” he said.

U.S. Senators Mark Warner and Tim Kaine released statements Monday, emphasized the benefits the contract would have for Hampton Roads.

“This multi-year buy further strengthens the partnership between the Navy and Huntington Ingalls, and the region’s shipbuilders and subcontractors,” Warner said. “By purchasing through a multi-year contract it also allows the Navy to maximize efficiencies and get the best value for the taxpayers.”

“I continue to be impressed by the outstanding work done by Virginia shipbuilders … ,” Kaine said. “This contract helps support the more than 63,000 Virginia shipbuilding jobs — the most of any state — while ensuring the future of our Navy’s advantage in undersea warfare. ”

Shares of General Dynamics Corp., based in Falls Church, Va., closed at $107.39, down $1.62.

Shares of Huntington Ingalls, based in Newport News, Va., closed at $99.08, down $1.48.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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