Secretary of the Navy Carlos Del Toro, crosses the walkway of guided-missile destroyer USS Preble (DDG 88) following a tour of the ship, Feb. 16. Preble is an Arleigh Burke-class guided-missile destroyer homeported in San Diego. (US Navy photo by Mass Communication Specialist 2nd Class Olivia Rucker)
WASHINGTON — In 2024, the US Navy’s frustrations with its industrial base were on public display. Whether those frustrations were justified depends on who you ask.
I’ve been watching the US Navy and industry interact with one another since 2017. My view is limited to what happens in open forums, granted, but nonetheless, it represents the same view the rest of the public has. What one quickly realizes as one follows admirals and secretaries around from conference to conference is that the visible relationship between industry and military is typically sterilized. There’s a lot of talk about partnerships and camaraderie, patriotism and love for America, an ingrained sense of service to country.
I bring all that up to juxtapose it with what we saw this year. Acquisition executive Nickolas Guertin published a one-page document outlining the severe delays of each major shipbuilding program and highlighting their associated prime contractors. Uniformed commanders publicly voiced their frustrations about industry’s production cadence for munitions.
[This article is one of many in a series in which Breaking Defense reporters look back on the most significant (and entertaining) news stories of 2024 and look forward to what 2025 may hold.]
And Navy Secretary Carlos Del Toro on multiple occasions tore into industry for what he said were excessive stock buy backs and industry’s failure to re-invest in their own facilities. He chastised American shipbuilders for, in his view, failing to rise to the occasion in the way South Korean and Japanese industries have done in their own quests to compete with China.
In one notable speech, Del Toro mentioned the possibility of personnel misconduct on industry’s part and previewed an office that will go after those individuals.
To be clear, I do not think there is anything wrong with the Navy expecting its contractors to act ethically and follow the law. But I do find it odd that Del Toro — the service’s civilian leader handpicked by the president — would raise that subject voluntarily to a friendly audience in a Navy-centric city like San Diego.
When I asked Del Toro about his posture towards industry during this year’s Sea Air Space Exposition, he told me the broader message he was trying to send was one about industry respecting the investment taxpayers have been making into the industrial base.
“It takes a team effort and the American taxpayers are making enormous investments in the industrial base,” he said at the time. “I need industry to make the proper capital investments themselves. And if you take a look at the major primes in this country, for example, that work in the defense industry, about a third of them are putting enormous buybacks into their own stocks. That prevents basically the utilization of those monies to be able to recapitalize those industries to try to get us to a better place. So that’s what I’m saying. Everybody’s got to do their part, and we expect industry to do their part as well.”
I should note that in the latter half of the year the secretary noticeably toned down his criticisms of industry in public forums. Nevertheless, when I’ve asked executives about Del Toro’s prodding, they usually respond with shrugs. No one wants to get into a public shouting match with their customer and, at the end of the day, it’s not Del Toro sitting on the other side of the table when contracts are negotiated, written and signed.
The backdrop to all of this has been a US Navy under as much pressure as its ever been in modern history. The October 2023 attack on Israel resulted in American destroyers seeing more action than they have in years. That in turn has led to increased pressure both on munitions production and the maintenance requirements for the fleet. The service has infamously struggled with the ship maintenance required to upkeep a blue water navy even in peacetime — rotating carrier strike groups to the Middle East to aid Israel only added to that pressure.
While Del Toro will ultimately leave office by Jan. 20, the munitions shortages, the ship maintenance backlogs and the increasingly higher operational tempo the Navy has had to adjust to will likely all follow the service well into 2025 — and perhaps beyond.
