{"id":41500,"date":"2018-07-29T02:12:31","date_gmt":"2018-07-29T02:12:31","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2018\/07\/29\/the-us-navys-columbia-class-submarines-could-squeeze-general-dynamics-profits\/"},"modified":"2026-08-07T23:15:01","modified_gmt":"2026-08-07T23:15:01","slug":"the-us-navys-columbia-class-submarines-could-squeeze-general-dynamics-profits","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/naval\/2018\/07\/29\/the-us-navys-columbia-class-submarines-could-squeeze-general-dynamics-profits\/","title":{"rendered":"The US Navy\u2019s Columbia-class subs could squeeze General Dynamics\u2019 profits"},"content":{"rendered":"\n

WASHINGTON \u2014 The U.S. Navy\u2019s new ballistic missile submarine is likely to squeeze General Dynamics<\/a>\u2019 profit margins, the company\u2019s top executive told analysts this week on its quarterly earnings call.<\/p>\n\n\n\n

General Dynamics, which owns Electric Boat in Groton, Connecticut, usually sees 8 percent to 10 percent margins on its boats. But GD\u2019s CEO, Phebe Novakovic, told investors and analysts on its quarterly earnings those margins will be under pressure as they move from just constructing Virginia-class attack submarines to kicking off the Columbia class<\/a>, the first new ballistic missile submarine in decades.<\/p>\n\n\n\n

\u201cAs we ramp up on Columbia, we will see some margin compression quite naturally because that will be cost-plus work,\u201d Novakovic said.<\/p>\n\n\n\n

\u201cAnd given the long duration of the shipbuilding contracts and the shipbuilding process itself for any one of these single submarines, that margin compression can [last] for a while, offset of course by increased improvements in our Virginia-class performance, which we have historically shown.\u201d<\/p>\n\n\n\t