Austal changes course, diversification may have saved hundreds of jobs in Mobile

MOBILE, Ala. (WKRG) — When Austal USA was not selected in April 2020 by the Pentagon to build a frigate for the US Navy, many worried about the future of Mobile’s largest industrial employer.

Craig Hooper, Senior Contributor at Forbes called the moment an “existential catastrophe” for the Mobile shipyard.

Less than three years later, though, Austal is in full transition to being a multi-dimensional operation now looking for hundreds of new workers.

A visitor today at the shipyard on the Mobile River directly across from Downtown Mobile would see something that would have been out of place and almost unthinkable a couple of years ago, stacks of steel slabs and workers busy welding together steel parts.

Austal’s niche was making only aluminum ships. It’s in the company’s name – AUSTrally ALuminum. For the past 15 years on the Mobile River front, Austal has been building two kinds of aluminum ships for the Navy: 19 Littoral Combat Ships (LCS) and 16 Expeditionary Fast Transport (EPF) ships. But those contracts are quickly approaching their end.

“There’s nothing wrong with aluminum,” said Austal USA’s President Rusty Murdaugh, but he admits it has its limitations and was falling out of favor with the Navy.

“The Navy gave us feedback that they’d been giving for a while which was to look beyond aluminum into steel and other things,” he said.

So, that’s what Austal did. The company used a $50 million military grant under the CARES Act to construct a state-of-the-art steel panel line.

“It’s very exciting,” said Neil Seddon, who oversees the new steel manufacturing at Austal.

“With the needs of the Navy we had to adapt,” Seddon said. “Steel was their demand, so we had to adapt our culture.”

Seddon said about half of Austal workers have previous experience with steel, as for welding, it is actually an easier process than working with aluminum. He said that has made the transition a smooth one.

After its disappointing failure to secure the frigate deal, Austal has managed to secure a number of contracts to deliver a variety of ships and projects.

Austal is already making a steel towing, rescue and salvage ship for the Navy called T-ATS.

Next year, the company will build a massive floating dry dock for the Navy. And in 2025, construction will begin on almost a dozen steel patrol cutters for the US Coast Guard.

These steel contracts have softened the blow of the LCS and EPF programs coming to an end.

“I think it was a good thing that happened to us because it made us stand up and get more creative,” Murdaugh said.

That creativity includes making an aluminum, unmanned, partially solar powered, sail drone for the Navy. Austal plans to adapt the EPF to build an aluminum fast moving military medical ship. And for the first time, Austal will act as a subcontractor, making an elevator and substructure for the upcoming Columbia class nuclear submarine.

It’s all work for Austal that might have been unthinkable just a few years ago.

“It’s a remarkable thing, what they’ve done,” said Bradley Byrne, who worked closely with Austal as a US congressman from 2013-2020. Byrne now heads the Mobile Area Chamber of Commerce and says he hates to think what Austal might be if it hadn’t adapted

“They certainly would have been a much smaller shipyard, even if they existed at all,” Byrne said.

Murdaugh agrees.

“If we weren’t able to pivot and create a strategy from which to end from, we probably would have been in dire straits and we would have been reducing the workforce substantially,” said the Austal President.

Instead, Austal is now looking for 1,200 new workers to hire over the next 18 months, and is poised to remain a cornerstone of the Mobile economy.

“We’re not going anywhere,” Murdaugh promised.

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