Reviving America’s Shipyards: What It Will Take to Rebuild U.S. Naval Production

After decades of contraction, the United States Navy’s battle force has shrunk from a Reagan-era peak of 597 warships in 1987 to just 293 as of October 1, 2025. The Pentagon’s fiscal 2026 budget request for 19 new ships, followed by a fiscal 2027 plan adding 18 more battle force vessels, represents the most significant shipbuilding push in a generation — but industry capacity, workforce shortages, and supply chain bottlenecks are raising serious questions about whether the nation can actually deliver.

The decline in American shipbuilding capacity did not happen overnight. Following the end of the Cold War, the so-called “peace dividend” led to a sustained drawdown in defense procurement. The fleet dropped below 300 ships in 2003 and has hovered near that number ever since, despite multiple Navy force-structure assessments calling for fleets of 355 ships or more. The 2016 assessment under the Obama administration set a 355-ship goal, the first Trump administration reaffirmed it, and the Biden-era shipbuilding plan projected a 381-ship battle force by the 2050s. Yet actual procurement has consistently lagged behind these goals due to cost overruns, inflation, and constrained industrial capacity.

The industrial base itself is perhaps the greatest obstacle. During World War II, the U.S. operated more than 50 major shipyards and launched more than 1,000 warships in a span of four years. Today, the country’s warship construction is concentrated in a handful of facilities: General Dynamics Electric Boat in Connecticut and Rhode Island, HII’s Newport News Shipbuilding in Virginia, HII’s Ingalls Shipbuilding in Mississippi, Bath Iron Works in Maine, Fincantieri Marinette Marine in Wisconsin, Austal USA in Alabama, and NASSCO in San Diego. Workforce attrition has been severe — Electric Boat alone has said it needs to hire tens of thousands of workers over the coming decade to meet Columbia-class and Virginia-class submarine demand, while simultaneously supporting the AUKUS agreement that commits the U.S. to selling Virginia-class boats to Australia.

Reversing the decline will require more than additional procurement dollars. Analysts and defense officials point to several necessary structural changes: multi-year block buys to give shipbuilders predictable demand signals, expanded workforce pipelines through partnerships with community colleges and trade schools, targeted investment in supplier base resilience for critical components such as castings and nuclear-grade materials, and potential revisions to the Jones Act and foreign shipbuilding restrictions to permit allied collaboration with South Korean and Japanese yards. Congress has also begun exploring legislation such as the SHIPS for America Act, which would create a national maritime strategy and a Maritime Security Board to coordinate commercial and naval shipbuilding policy.