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Industry · Submarine sustainment

Fairbanks Morse discusses Seawolf maintenance with Navy, Breaking Defense reports

CEO George Whittier told Breaking Defense he expects Seawolf work to follow the Los Angeles- and Ohio-class submarine overhauls.

Fairbanks Morse Defense is discussing maintenance on the Navy's three Seawolf-class submarines with the service, CEO George Whittier told Breaking Defense at the Euronaval defense exposition in Paris.1

In discussions with the Navy about conducting maintenance on the Seawolf submarines

Fairbanks Morse Defense

Seawolf submarines

Fairbanks Morse Defense CEO George Whittier confirmed the company is in discussions with the Navy about conducting maintenance on the Seawolf submarines.

Los Angeles- and Ohio-class submarinesapproximately $100 millionactual

follow-on contract in October for emergency diesel generator overhauls on six Los Angeles- and Ohio-class submarines

Reported by Breaking Defense, Nov. 5, 2026

Sources
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The Seawolf discussions offer a potential extension of Fairbanks Morse's Navy submarine maintenance business beyond its Los Angeles- and Ohio-class generator work, if the talks produce an agreement.1

In October, Naval Sea Systems Command awarded the company an approximately $100 million follow-on contract for emergency diesel generator overhauls on six Los Angeles- and Ohio-class submarines, Breaking Defense reported. That follow-on contract builds on an earlier award under which the company completed generator overhauls on two Ohio-class submarines and one Los Angeles-class submarine.1

Whittier expects Seawolf work to begin after the Los Angeles- and Ohio-class overhauls, which are expected to wrap up in the late 2020s, Breaking Defense reported Nov. 5. The report does not identify a Seawolf contract or specify whether the prospective work would cover emergency diesel generators.1

Sources (1)
  1. Breaking Defense: Fairbanks Morse Defense in talks with Navy about Seawolf-class submarine repairs breakingdefense.com
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Industry · Naval propulsion

Fairbanks Morse starts $60 million naval propulsion expansion

Australian AUKUS funding is part of the project, which the company says will effectively double naval propulsion manufacturing capacity at its Pascagoula facility.

Fairbanks Morse Defense broke ground Oct. 20 on a $60 million expansion at its Bird-Johnson Propeller Company facility in Pascagoula, Mississippi. The company says the new Center of Excellence will effectively double the facility’s capacity to produce naval propulsion systems.1

Fairbanks Morse plans more space and machines for naval propulsion

Planned additions at Bird-Johnson’s Pascagoula facility, announced Oct. 20, 2026

38,000 square feetNew manufacturing space planned
TwoNew five-axis computer numerical control machines planned
By Q1 2028New capacity scheduled to come online

Source: Fairbanks Morse Defense, Oct. 20, 2026. As of Oct. 22, 2026.

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The project includes a $27 million U.S. Navy investment. Of that amount, $22 million comes from Australia’s initial contribution to the U.S. Submarine Industrial Base under AUKUS Pillar I.1

The center will complement existing foundry capacity with 38,000 square feet of manufacturing space. It will house two new five-axis computer numerical control machines. Equipped for parts weighing up to 100 metric tons, the new machines will bring the facility’s total to four. The design also reserves a machine-ready expansion slot and a bay for a future 3D sand printer.1

Fairbanks Morse expects the upgrade to increase the foundry’s workforce by 25%, to 100 craftspeople.1

Dan Rediger, Fairbanks Morse Defense’s president of power and propulsion, said delivery timelines for specialized propulsion systems for the Virginia-class submarine program and next-generation surface combatants are accelerating. The new capacity is scheduled to come online by the first quarter of 2028. Fairbanks Morse disclosed no output or delivery figures for the added capacity in the announcement.1

Sources (1)
  1. Fairbanks Morse Defense release, Oct. 20, 2026 www.fairbanksmorse.com
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Industry · Unmanned systems

Kratos plans a turbojet production ramp ahead of expected sales

Kratos targets up to 3,000 engines produced in 2027. It forecasts about 1,500 sold, with cash flow estimates including working capital for the ramp.

Kratos plans to increase turbojet production to address expected customer demand for jet engines for small cruise missiles and drones. Its 2027 forecast assumes about 1,500 engines sold, with most deliveries in the second half.1

Kratos plans turbojet production ahead of forecast sales

Turbojet engines, 2027: company production target and sales forecast

Planned productionUp to 3,000
Forecast salesApproximately 1,500

Kratos forecasts the significant majority of engine deliveries in the second half of 2027.

Source: Kratos third-quarter 2026 results. As of Nov. 5, 2026.

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Kratos's fiscal 2026 and 2027 cash flow estimates include working capital for materials, components and equipment to increase production of turbojet engines up to 3,000 engines produced in 2027.1

Third-quarter 2026 revenue grew 35.7% year over year. Organic growth, excluding the current-year contribution from acquisitions, was 23.2%. Turbine Technologies posted 27.1% organic revenue growth.1

Growth is already absorbing cash. Third-quarter 2026 operations used $5.2 million, which Kratos attributed primarily to receivables growth, alongside inventory increases tied to production ramps and development investments.1

For full year 2026, Kratos forecasts free cash flow use of $110 million to $120 million. It forecasts capital expenditures of $100 million to $110 million. It expects investments in inventory, property, plant, equipment and facilities to continue at least throughout fiscal 2027.1

Kratos raised $1,348.4 million from common stock issuance, net of issuance costs, in the first nine months of fiscal 2026. It ended the quarter with $1,404.3 million in cash and cash equivalents.1

Separately, third-quarter Unmanned Systems revenue fell to $74.6 million from $87.2 million a year earlier. Kratos attributed the decline to a prior-year shipment of Valkyries to an international customer that generated $16.1 million.1

Kratos says continuing resolutions typically restrict production-rate increases and new program starts. Its guidance assumes a continuing resolution into its first fiscal quarter of 2027. If it extends beyond March 31, 2027, the company says it will need to reassess its initial forecast for that year.1

Sources (1)
  1. Kratos Reports Third Quarter 2026 Financial Results, Nov. 5, 2026 ir.kratosdefense.com
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