Huntington Ingalls Industries (HII) and Babcock International Group announced a new contract on December 9, 2025 to deepen their partnership for Virginia‑class submarine construction. The agreement authorizes Babcock to build complex submarine assemblies at its Rosyth facility in Scotland, marking the first outsourced contract for Newport News Shipbuilding.
The deal expands HII’s supplier base and allows large‑structure work to be performed outside the United States while keeping U.S. ownership of the final product. By leveraging Babcock’s advanced manufacturing capabilities, HII aims to increase throughput and meet the Navy’s demand for Virginia‑class Block VI submarines.
The contract is part of a broader effort to strengthen the AUKUS security framework. The partnership gives the U.K. and U.S. navies a more integrated supply chain for future submarine programs, and it supports HII’s margin‑recovery strategy by accelerating delivery schedules and reducing cost pressure on its submarine portfolio.
"This is a significant next step in delivering on our joint commitment to enhance both organizations’ capabilities, for the benefit of U.S. and U.K. programs," said Chris Kastner, HII President and CEO. "Leveraging Babcock’s reach and expertise in the U.K. will reinforce our supplier base, strengthen submarine production in the U.S., and support the trilateral AUKUS partnership.","Babcock’s advanced manufacturing expertise has enabled us to build on our established missile tube assembly capability, to deliver additional components for the U.S. submarine fleet," said David Lockwood, CEO of Babcock International Group. "This expansion of our strategic partnership with HII enables us to optimize our joint capabilities for the benefit of the wider AUKUS security partnership.","The outsourcing arrangement allows HII to focus on final assembly and integration, reducing lead times and improving cost control, which is critical for maintaining competitive margins in a high‑cost, high‑skill industry.","The move also positions HII to better manage capacity constraints at Newport News Shipbuilding, where recent production bottlenecks have limited the pace of new submarine builds. By shifting assembly work to Rosyth, HII can free up domestic resources for final outfitting and testing, thereby improving overall project timelines and supporting the Navy’s accelerated deployment schedule.
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