🔒Supply chain issues will pause Electric Boat’s hiring frenzy in 2025; new President Rayha focuses on creating ‘agility’ within company

Mark Rayha has stepped up to the president’s office at General Dynamics Electric Boat just as the Groton-based submarine builder experiences an inflection point in its now years-long expansion.

“I think the hiring in Connecticut will not be as rapid as it was,” he said, indicating a slowdown, or even a pause, that may last until the second half of the year. “There’s been a couple of issues that have kept modules from coming to Groton. So, because the work’s not here, we don’t have the need to fully staff up.”

EB has been hiring at such a fast clip of late that it has strained the ability of the labor force to keep up, and of surrounding support services like housing to accommodate all the new employees.

The shipyard hired 5,300 people across Connecticut and Rhode Island in 2023, and another 4,100 in 2024, launching outreach efforts in both Providence and Hartford to find enough people.

The expanded workforce — which currently stands at around 23,200 between the two yards — is needed to support the ongoing Virginia class program, and construction of the new, larger Columbia class, as well as overhaul work on older Los Angeles class boats.

The news of a 2025 hiring slowdown shifts the narrative significantly for Electric Boat, which previously had spoken of workforce shortages as being a key factor in the yard falling behind schedule on deliveries.

Rayha insists the change of pace does not signal any lack of work, but rather issues in the supply chain that have persisted for some four years now — ever since the COVID-19 lockdowns crippled some of the smaller companies that EB relies on, and caused significant issues for its peers like Northrop Grumman and partner Newport News.

“Shipbuilding is a very intricate, long process. There are key components that you have to be able to get — we call them sequence-critical components — that you have to be able to install at the right time, otherwise it holds up the build,” Rayha explained.

“The supply chain has been a challenge for us — I think that’s been pretty well documented,” he went on. “What we’re working on now is to create agility so that when we encounter supply chain shortages that impact the build, we can be agile and more efficiently work around them.”

“Agility” has so far meant a number of adjustments. For instance, the yard is setting aside floor space for multiple modules at one time, so work can be switched according to the availability of components. The company has also recently closed on the purchase of a nearly 55-acre property in North Stonington, where the Groton-based submarine builder has filed preliminary plans construct a roughly 480,000-square-foot warehouse. Such a structure could offer the flexibility to store modules and parts coming in from supply chain companies until they are needed.

It’s also meant deploying skilled trades people who are not needed in the short-term to what are called “road jobs” — in other words sending them to help out at other shipyards.

The need for this kind of creative thinking was a theme that was stressed by Rayha’s boss, General Dynamics Chairman and CEO Phebe Novakovic in an October earnings call.

“The supply chain is not getting better at a fast enough rate as we had hoped. Through our internal efficiency we have now outpaced them,” she told analysts. “This is the reality of the post-COVID environment for many of our most important suppliers.”

“While we will continue to work on improved productivity, there is no point hurrying portions of the boat, only to have to stop and wait increasingly extended periods of time for major components to arrive,” she went on. “We need to get our cadence in sync with the supply chain and take cost out of the business if we are to hope to see incremental margin growth.”

‘Seriousness of purpose’

Rayha himself got to see up-close the impact the pandemic had on shipbuilding.

“My first day at EB was January 13, 2020. So, I did the COVID-19 lockdowns in the Mystic Residence Inn,” he recalled.

Rayha had moved to Connecticut from Virginia, after a 30-year career with Electric Boat’s parent, General Dynamics.

The Michigan native joined GD Land Systems in 1989 at the Detroit Arsenal Tank Plant, and spent 17 years there. Then from 2006 through 2014, he worked at General Dynamics’ corporate headquarters in Falls Church, Virginia, rising to staff vice president of financial planning and analysis.

In late 2014, at the time of the creation of General Dynamics Mission Systems, he assumed the role of vice president and chief financial officer of the new company.

In late 2019, he got the call to move to Groton, at first as EB’s vice president of finance.

“Working at EB is an honor,” he said, calling the submarine builder a national treasure. “Any place you work at General Dynamics you look to EB as the bellwether. The product is the most complicated product humankind can make.”

But with the pandemic hitting mere weeks after his arrival, the challenge was a different one than he had expected. Electric Boat was designated as an essential business, and work at the shipyard continued, although under very constrained conditions to avoid passing the virus among the workforce.

“One of the things about being in this business is we drill a lot of things about business continuity during a disaster,” he said. “And so, because of that we had a way to go about creating what we called our COVID-19 playbook.”

That playbook gained national attention as the White House sent some of its healthcare leadership to EB to observe how they were tackling the crisis, and asked them to pilot some workplace protocols.

Rayha became CFO in July 2021, and then chief operating officer in September 2023, working under then-president Kevin Graney, a man whose work he admires.

“He brought a seriousness of purpose and preparation,” Rayha said. “Kevin is extremely well-prepared. And so, as a business, we became better prepared because of that.”

‘Hardcore’ shipbuilding

Rayha wants to continue that theme of preparation as he takes over from Graney, while renewing the company’s focus on human capital.

“Submarine shipbuilding is hardcore — it’s high-end manufacturing,” he said. “You have to put your hands on the product. A lot of the welding is hand welding you can’t automate. So, it takes very, very talented and courageous people to do it. So, that’s the biggest challenge for us — developing and keeping that workforce.”

He says efforts to improve the workforce pipeline through accelerated training programs have borne fruit. The yard continues to partner with state agencies, the Eastern Connecticut Workforce Investment Board and local colleges to prepare recruits.

And they’re reaching deeper.

“We have K-to-12 programs now,” Rayha said. “Now we’re not hiring them yet, but we’re getting them indoctrinated into what does it mean to be a shipbuilder?”

Those efforts can run from classes where grade school children are welding crackers together with cheese whiz, to hard hat “signing ceremonies” with high schoolers.

He’s grateful for the federal efforts that have been focused recently both on workforce development and on the submarine industrial base generally, to modernize the supply chain.

The Navy has so far spent at least $2.3 billion on an initiative to build and strengthen the capacity and resiliency of the industrial base that supports EB’s work.

That can mean funding new equipment and training at existing supply chain companies, or helping new companies enter the supply chain where there’s a critical need.

These efforts included the attraction of a private equity investment in the Austal USA shipyard in Mobile, Alabama, which has begun building steel modules for the Virginia class program.

Rayha does not believe the change of administration in Washington, D.C., will impact the yard’s work significantly, noting that there’s always been bipartisan support for the programs that fund submarine building. But several political issues do remain to be decided this year.

One is the so-called AUKUS program that will see Australia acquire between three and five U.S. Virginia-class subs, each of which will cost about $4.3 billion. It’s unknown where Donald Trump stands on the 2021 agreement.

The other is efforts by legislators and the Navy to send more aid to shipbuilders that are locked into fixed-price contracts at a time when the cost of both materials and wages have risen significantly.

Shipyard Accountability and Workforce Support — or SAWS, as the proposal is known — would allow some flexibility in the Navy’s acquisition program to bring forward funds that have been allocated to future years, in order to cover more immediate costs.

Rayha is taking a wait-and-see approach.

“We’ve been getting good support for that on the Hill,” he said. “It’s just a matter of how you go about doing it, and I think that’s where the debate still lies.”

Continuing to develop the future workforce while in a temporary hiring lull presents a challenging contradiction, he acknowledged, but Rayha remains steadfast on the yard’s long-term future.

“Our backlog now stretches out into the early 2030s,” he said. “The program plan is to build 12 Columbia class, and that production will last out to 2040. So, there’s a big opportunity for a new worker to enjoy a long and lucrative career at General Dynamics Electric Boat.”