Bath Iron Works in Maine just cut 160 jobs after finishing the Zumwalt, and Maine’s politicians are trying to help them recover the Coast Guard bid they lost. They exclusively build for the Navy, and do not do anything at all for commercial industry. Is this common for defense contractors? To work only for the military, and not do anything at all for the private sector?
I believe the vast majority of U.S. defense contractors serve both. IIRC, Boeing’s main income is the civilian airliner market.
Yeah, that’s what I thought. I live in Maine and always hear about how great BIW is. It doesn’t really make sense that such a large and respected company only has one customer. I’m surprised they don’t also build freighters or other civilian ships.
BIW has built for private customers in the past, but their primary business has always been with the US Navy. You’re right that it’s unusual for a company to focus on defense contracts almost exclusively, but a shipyard is a pretty special kind of manufacturer and building naval ships is definitely a pretty special business.
They’ve been a subsidiary of General Dynamics for over 20 years, though, and GD does still derive the majority (but not all) of their revenue from government contracts, and a significant chunk of that is from defense contracts specifically.
BIW has had ups and downs over the years, but they are struggling to turn things around. They had a big labor dispute last year, and in a way they sort of find themselves in a similar situation to the major steel mills and Detroit automakers. They can do big military ships pretty well (though the DDG-1000 was pretty much a disaster) but they face much stiffer competition from shipyards that smaller, more agile, often non-union, etc.
As a result, BIW isn’t really well positioned to compete for some ships that other yards do well. However, the Navy is heavily incentivized to keep BIW pretty heathly, as BIW competes against Mississippi based Huntington Ingalls for destroyers and some other ships. The Navy would not want to have BIW go under and then have only one remaining shipyard to build those kinds of ships.
Many years ago, I used to work for Westinghouse when they still had a defense division. I worked on airborne radar and flir systems. Westinghouse at the time made everything from toasters to power plant generators to F-16 radar sets. One of our big competitors for radar was GE, who again makes everything from toasters to refrigerators to power plant generators and so on.
Westinghouse sold their military division to Northrop Grumman, who paid more than they probably should have for it but wanted it because it was the only part of their airplanes they didn’t make themselves at that point. Northrop Grumman mostly does defense work. They do have some business outside the defense world, but it’s not very large, comparatively speaking.
Lockheed Martin is another company that mostly does defense work. They also have some business outside of defense and aerospace, but it’s not very large.
Raytheon mostly does defense work.
Honeywell makes everything from parts for the Abrams tank to industrial control systems to thermostats for your home furnace. They have a pretty varied business.
So it varies. Most of the big companies have non-defense divisions. There are a lot of smaller businesses (especially around the DC beltway and along the Baltimore-DC corridor) that only do defense work though.
Shipbuilding has mostly gone to the Far East for commercial orders. The US DoD won’t have their warships built in the Far East, for obvious reasons, so that market is pretty much guaranteed to stay stateside.
However it is vulnerable to cuts in military spending, especially if what you are offering to make has no commercial equivalent.
Say–“has gone to South Korea”, more accurately.
The military does actually pay attention to things like that, and sometimes they’ll throw a small contract or two at a company just to make sure they don’t completely go under.
That said, hire and fire is the norm for defense contractors. They hire when they get contracts and they fire when they run out. That’s one of the reasons I don’t work in that industry any more.
That’s not more accurate. South Korea has a large civil shipbuilding industry, but so does China and Japan, each of whom have some of the largest shipyards in the world.
I’ve worked for contractors who do nothing but government work including the military. Currently I work for a contractor who does about a third of their business with the US government and the other half with private industry. This company can better ride out things like an economic depression and/or government spending reductions.