China is significantly outpacing the United States in both military and commercial ship production, raising concerns about the future of American shipbuilding. In response, former President Donald Trump announced the creation of a White House office to revitalize the struggling industry, emphasizing its importance to national security.
Despite having the most powerful navy in terms of firepower and tonnage, the U.S. fleet is shrinking while China’s continues to grow. The U.S. currently has 296 naval ships, whereas China is set to surpass 400 by the end of the year. Budget constraints have exacerbated the issue, with the Navy planning to commission only six new ships in 2025 while retiring 19, resulting in a net loss of 13 vessels.
Shipbuilding companies, including major players like BAE Systems and Huntington Ingalls Industries, have struggled due to inconsistent Navy contracts. Many shipyards are operating below capacity, and the fluctuating demand has weakened the supply chain, forcing numerous suppliers out of business. George Whittier, CEO of Fairbanks Morse Defense, highlighted the risks of relying on a single supplier for key ship components, noting that maintaining even one engine manufacturer has become difficult.
The lack of consistent funding has also led to maintenance delays and widespread layoffs. BAE Systems had to lay off nearly 300 workers in 2023 due to a shortage of work. In Norfolk, Virginia, the number of Navy ships available for repair has plummeted from 44 to fewer than 30 over the past decade, resulting in mass furloughs.
Military leaders, including Marine Corps Commandant General Eric Smith and Acting Vice Chief of Naval Operations Admiral Jim Kilby, have acknowledged the dire state of the industry. Kilby emphasized that aging ships are becoming too costly to maintain, but budget constraints prevent adequate fleet expansion.
Experts blame the unstable budget process in Congress for exacerbating the crisis. The reliance on temporary funding measures, such as continuing resolutions, has delayed new projects and created logistical challenges for both the Navy and shipbuilders. Whittier described the situation as a “broken system” that hampers the country’s ability to sustain a strong naval fleet.
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