A Bright Spot In Rhode Island's Economy: The Defense Industry

Mar 29, 2017

Rhode Island has struggled with a lagging economy for years. Though the state is still behind its New England neighbors by some measures, there are bright spots. The defense industry is one of them.

In the Ocean State the defense sector primarily means work for the Navy, though other branches of the military do have a presence. The Navy’s history in Rhode Island extends back to the 1860’s when the U.S. Naval Academy temporarily relocated to Newport during the Civil War. A few years later, Goat Island would serve as the Navy’s first torpedo station.

Today, defense has an annual economic impact to the state of about $3.7 billion, according to the nonprofit trade group the Southeastern New England Defense Industry Alliance.

Some 30,000 people work directly and indirectly for the industry Rhode Island at companies like Raytheon and Electric Boat. Almost all of that work supports the nation’s submarine program.

Currently that’s the Virginia Class submarine, a massive undersea vessel that costs about $2.7 billion each, built at a rate of about one to two a year. Much of that technology work is done at the Naval Undersea Warfare Center in Middletown, says Molly Magee, head of the Southeastern New England Defense Industry Alliance.

“It’s a billion dollar organization,” said Magee. “It is DOD’s undersea technology jewel. That is the home of research.”

President Donald Trump could expand that research, as the military is expected to get a bump according to his current budget proposal. But Magee says the Department of Defense already allocates healthy resources to the work being done in Rhode Island.

“We took a look at the base budget that President Obama put forward, and found out that of the $165 billion Navy budget, $42 billion had some connection to undersea and undersea technology.”

And Magee said that has a far-reaching effect for the smallest state in the union.

“How many companies in Rhode Island touch undersea technology? Both from defense and commercial? And we found over 180 companies so far,” said Magee. “There’s a significant ecosystem here for undersea technology.”

Those companies range from large corporations to specialized small businesses. And Rhode Island is working furiously to hold onto that ecosystem, because employers are having difficulty finding skilled workers, especially in the STEM fields: science, technology, engineering, and math, said Magee.

“People who can manage your network, who can help build your IT infrastructure, and on the other side is undersea technology engineers,” said Magee.

Manufacturers are also having trouble finding qualified employees. Much of the construction of the nation’s submarine fleet is done at Electric Boat in North Kingston, as well as Connecticut, where the company is headquartered. Last year, the Navy named Electric Boat its main contractor for submarine construction.  About 3500 people work at the Quonset point campus.

Joseph Silva manages training at Electric Boat. Walking through one of two training centers, he explains the company recently built a second to keep up with expected training needs. Students here can be fresh hires, or current employees getting professional development. Today, they’re sharpening their welding skills Silva said.

“So it sounds like bacon frying,” said Silva. “And what’s interesting is a person with many years of experience can tell if something is starting to sound incorrect just because of their experience and doing the work.”

Instructor Paul Gushyn fires up his torch and welds two pieces of metal together with a confidence gained over decades of work.

“You hear it, you see it,” said Gushyn. “And doing it for thirty years, it’s just, it’s all natural.”

Gushyn has an expertise essential to the success of Electric Boat. His work must hold up to the highest scrutiny.

“Instead of just looking at the weld and saying, ‘yeah I think that looks ok.’ Because of the pressure that weld needs to perform under, we’ll actually x-ray the weld and make sure it’s good all the way throughout,” said Patrick Saggal, who helps oversee manufacturing at Electric Boat. “Not everybody can do that kind of work.”

But after 30 years in the business workers like Gushyn are eyeing retirement. Electric Boat is working to keep up, says Brian Howard, who works in human resources.

“[In] the early 2010’s when we started to see the forecast of work coming our way, we really took a look and said ‘oh boy we have all this growth coming,’ we better start looking at the local workforce and see what we need to do to be able to meet these demands of the future,” said Howard.

But as manufacturing in other industries leveled off and declined, Howard said students weren’t getting vocational training in local schools, and those that were didn’t offer the specialized skills required for marine trades.

“What we found is primarily, those were construction-based, residential construction mindset,” said Howard. “So, again that was a shift, getting into those schools and saying ‘hey, in the marine trades there’s a real opportunity.’”

Howard said Electric Boat plans to hire some 5,000 people in the coming decade to keep up with work on the submarine fleet, and expected retirement rates. As the new administration rolls out their military priorities the sector stands to grow in the Ocean State, as long as the state has the employees to do the job.