Chris Kastner

Hi, it’s Kevin O’Connor from This Old House. Every home we’ve ever built starts the same way. Someone who knows how to do the work shows up. But America is short on those people: electricians, welders, plumbers, HVAC technicians, the people who build and maintain the things we all depend on. Today, we’re speaking to Chris Kastner, CEO of HII, America’s largest military shipbuilder.

You can’t build an aircraft carrier without welders and pipe fitters, and Chris needs more of them than anybody, so he trains his own, a four-year apprentice school that’s produced foremen, directors and vice presidents. He calls what’s happening in America a manufacturing renaissance. Let’s find out why.

Chris, welcome to the show.

CHRIS: Thank you, Kevin. Thanks for having me.

KEVIN: I love the word renaissance. It’s very aspirational. Do you have a sense as to what’s caused it? You know, why the change? Why has the pendulum swung in the favor of renaissance in manufacturing happen now?

CHRIS: Well, there are so many jobs available. You’ve got the position in the United States right now, over the last few quarters, there have been more people employed in manufacturing and still more jobs available in manufacturing. And so, what that’s done in supply and demand, prices have gone up, salaries have gone up. People can earn a good living when they’re 18 years old.

They don’t have to go to four years of college, incur debt. There’s a lot of really good programs of the federal government and state and local government has set forth in apprenticeship programs where when you’re 18 years old and if you’re a welder, you’re going to work, you’re going to get a good job, and you’re going to make between $70,000 and $90,000 per year, and you’re going to have good benefits, and you’re going to be in demand.

That’s a pretty good place to be, and it’s not where we were four or five years ago.

KEVIN: That word apprenticeship catches my ear. Also aspirational. Means a couple things to me. I’d like to hear what it means to you. To me, it means you’re starting young to have a mentor, and you’re probably earning while you learn.

How do you guys look at apprenticeship?

CHRIS: Same. We have formal apprenticeship programs. Our apprenticeship program in Newport News is four years. After that four years, you’ve got four years work experience, and you can come out with an AA degree potentially if you want one. For the most part, entering into a leadership position, half the time you’re in the classroom, half the time you’re in the shipyard, so you’re learning from a master.

You’re learning not only in the yard from someone experienced, but you’re learning from educators that couple classroom education with real-world experience because they worked in the shipyard. So, it’s really one of the best deals you have going. That’s why the federal government has expanded the use of apprenticeships and what qualifies as an apprenticeship.

When they go to the apprenticeship program, they sign no commitment that they have to stay employed after the program is complete. After 10 years, over 70% of them are still employed by the company. So, they stick, they become part of the culture, and they become leaders in the organization.

KEVIN: I’ve heard you refer to it as a leadership factory. What happens through their career, and where do they end up in your organization?

CHRIS: Pretty much wherever they want to end up. They have to make a choice. A lot of them just want to be foremen. That can happen, but I also have examples of vice presidents that started as apprentices. They got their AA degree, bachelor’s and then an MBA, and have moved through management throughout the vice president’s level.

We have a number of directors right now that started as apprentices, and it just adds credibility to them when they’re on the deck plate and they can say, “Well, yeah, I was a foreman. I was an electrical foreman. I was a welding foreman. I was a ship fitter.” So, it’s an amazing amount of cultural support when you have somebody that came out of the apprentice school in your management ranks.

KEVIN: So, let’s talk about the Navy. It’s unique to your guys’ company, the largest military shipbuilder in the country right here. You have been quoted as saying you’re almost on a war footing when you think about the production of all of these ships, submarines and such. Talk to us about that.

CHRIS: The pace of activity has increased significantly since we exited COVID.

The amount of ships we’re building, we’ll deliver five of those ships in the next six to eight months. These are from aircraft carriers, destroyers, submarines, amphibious ships. We’ve increased our throughput over the last two years about 30%. We’ve expanded our distributed shipbuilding partners, which is essentially our manufacturing footprint.

Doubled it last year, another 30% this year. So, the pace of activity and the demand is pretty unprecedented. We’ll grow at about 6% in the medium term from a top-line standpoint, so there’s a lot of opportunity because the Navy really needs us. They need these ships. We’re going to need more foremen, more supervision, more welders, more electricians.

Those are stable jobs for 15 to 20 years.

KEVIN: You guys hired aggressively after COVID, bringing in a lot of people, and I think you learned some lessons from that in terms of who’s a good hire and the need for experience versus just numbers.

CHRIS: You’re probably referring to what we call the pipeline. We hired aggressively after COVID, entry level, untrained personnel, and what we found was they just left. If you want to have a career in shipbuilding, you need to be prepared for how hard that job is and how challenging it is. We made very conscious efforts to start working on what we called our pipeline programs. The apprentice school, obviously, our high school outreach, community colleges and our regional workforce development centers.

These are programs that are federally funded and state funded cooperatively where a company goes in and gives them the curriculum, teachers and equipment, and guarantees them a job when they come out. So, we’ve got those pipeline programs now to over 50% of the hires within the company, and what we know there is they’re going to be more proficient and they’re going to stay.

So, it was a tough lesson. We are taking steps to ensure that we continue to hire from that pipeline. It helps that we’ve increased wages in both shipyards as well. We have enough backlog and work for the next 15 to 20 years. And if you do a good job, you’re going to be employed.

KEVIN: Makes me a little nervous though to hear backlog and thinking about what we went through with COVID, with the supply chain as it sort of fell apart, and wondering about what’s going on right now.

What does this mean for national security? And how do you look at your role and this industry when it comes to national security?

CHRIS: We take it very seriously. The good news is shipbuilding has been supported not only in additional budget items for additional ships, but there’s been significant investment since COVID in the industrial base, both in the supply chain and in our shipyards to make us more efficient.

If you were to come into our shipyard now versus eight to 10 years ago, you wouldn’t recognize it. The amount of facilities that have been invested in, the amount of technology that’s been implemented in both shipyards, it’s just different. And that’s a testament not only to our investment, but also the government’s investment in shipbuilding within HII.

KEVIN: What’s changed? Is it something you’ve done? Is it just the sheer demand out there?

CHRIS: It’s a demand signal. 2011, when we spun from Northrop Grumman as a company, the defense budget for shipbuilding acquisition was between $12 and $15 billion a year. Now it’s at $40 billion. We just need to build them, but that’s 15 to 20 years of work.

KEVIN: If you had to sum it up, what’s corporate America getting right about developing the pipeline for young people in the trades, manufacturing and stuff? What are you guys doing right?

CHRIS: Probably our greatest success is the realization that it takes a team to get this right. It takes companies that guarantee jobs on the backend, working with your regional workforce development centers, working with the federal government, working with the community colleges, such that students and parents see that if they put in this work, they’re going to get a job.

Then they’re not going to have to apply for 100 different jobs and have a bot respond to them that they’re not qualified. I think that government-led programs where they say they’re going to solve it without industry doesn’t work. Industry without the government support doesn’t necessarily work. So, I think it’s really a team effort, and the ones that lean into that I think are successful.

KEVIN: Lots of statistics and numbers coming out of your organization. The story nationwide is a little more grim. There are still way too many of these jobs that are not filled and too few people going into it. What do you think’s at stake for this country if we get this wrong?

CHRIS: I think we’re already on a path to get it right, and let’s just let capitalism work. With demand and with increased salaries, people are going to show. I think AI scared people a bit. People are worried that if they go the college route, they may not have a job, so let’s choose this. I think parents see that now, too. I do not want to be in a place where we can’t do manufacturing in the United States. I think we’ve realized as a country that that doesn’t work. So, we need to do manufacturing. We need to be smart about it. We need to use all the tools that we have at our disposal to be great at it. Look, as a developed country, you have to have manufacturing. You can’t be overly reliant on somebody else.

KEVIN: I love the optimism, Chris. There’s a lot of doom and gloom about this subject, so it is great to hear someone who’s on the front lines of running one of these companies, teaching these kids and recruiting them to be so optimistic. I’m going to, I’m going to embrace that optimism. I think it’s awesome.

CHRIS: You should.

KEVIN: I’ve never wanted to be a shipbuilder as much as I do right now.

CHRIS: Come on. You can weld. Even if you can’t weld, I’ll train you.

KEVIN: I can’t weld, but I believe that you’d find a spot for me. That’s awesome. Thank you for what you and your team are doing on this and the rest of the folks at the Business Roundtable, and thank you for spending some time with us today. I really appreciate it, Chris.

CHRIS: Thanks, Kevin. It was fun.

This has been Work in Progress, presented by the Business Roundtable in partnership with the Human Potential Network, conversations about apprenticeship and workforce training in America’s skilled trades. Back to you, Jen.