HII planning to increase UUV demand

Huntington Ingalls Industries (HII) is restructuring its shipbuilding businesses to tap into the Navy’s demand for unmanned undersea vehicles (UUVs). The Navy will still be buying large-capital ships and amphibious warships that HII has built for decades. But, Navy’s appetite for UUVs is only going to grow, HII President/CEO Mike Petters, said at the firm’s Feb. 13 financial conference call. “You’re not going to see a hard-left turn” where the Navy is only wanting to buy unmanned ships, he continued. “I think what you’re going to see is an evolution.” With tightening government spending. and a shipbuilding budget squeezed by its submarine program, Petters said the evolution is occurring now. FY-21's request includes spending $288M on UUVs; and to buy 113 UUVs between now and FY-25. For HII, the Navy’s emerging focus represents a market that cannot be ignored, Petters told investors. “As their principal partner, we want to be right there with them and help them make that successful.” With a prospect of landing more UUV contracts, HII has sought to restructure its Technical Solutions business segment to include: A $350M deal to buy the Norwegian UUV maker Hydroid; It’s San Diego repair years would join a new maritime maintenance and repair consortium; and HII’s plan to sell its oil and natural gas engineering and field services business. In 2018, that segment reported $189M in sales and about 2 percent of HII’s $8.2B in sales for the year. The Hydroid buy is significant because it increases HII’s UUV footprint at the right time. The Navy plans to purchase 72 MK-18 UUVs, made by Hydroid, by 2025, according to the FY-21 Navy budget request. The deal is expected to close by the end of March. (Source: USNI News 02/13/20) https://news.usni.org/2020/02/13/huntington-ingalls-industries-planning-for-increased-u-s-navy-demand-for-uuvs