TOP 100: How HII accelerated its push to be more tech-driven

An artist rendering of HII's Remus unmanned underwater vehicle, which show the company's tech-centric strategy that ties to its shipbuilding roots.

An artist rendering of HII's Remus unmanned underwater vehicle, which show the company's tech-centric strategy that ties to its shipbuilding roots. Courtesy of HII.

Company No. 23 will always be a shipbuilder even as the fast change unfolds in its technology solutions business, which is now focused on growth after much integration work.

At the risk of starting out with things written and said before, HII was born as an independent shipbuilder in 2011 and that remains paramount in how the company talks about itself.

Even as much of the change at HII unfolds in its Mission Technologies segment, once known as Technical Solutions and houses a bulk of the company's software and solutions work.

Don't take that from us. Take it from HII's chief executive Chris Kastner himself, who said as such in this interview with CNBC posted May 24:

"In the future, we'll always be a shipbuilding company. It'll be the core to our culture and our values, that'll always be the core of HII, but we are going to be more tech-enabled. Tech is growing faster than our shipbuilding business, so it'll become more part of the portfolio and you'll see, I think, more of an integration between the two."

HII is in position No. 23 on our 2024 Top 100 rankings, unchanged from last year, with approximately $2.14 billion in unclassified prime tech and professional services obligations.

Consider also that HII cracked the list in 2018 at slot No. 71 and solidly held in the middle third of the rankings over the following two years. HII's acquisition of Alion Science & Technology in 2021 resulted in a large spike to No. 24 in 2022 and up one spot in 2023.

Andy Green, president of the Mission Technologies segment, characterized 2023 as a year where the business "hit the ground running" following a late 2021 and majority of 2022 focused on integration.

"Alion wasn't huge relative to all of HII, but it was huge relative to what was then Technical Solutions," Green told WT. "One of the things we wanted to make sure, is that we didn't bring them together just on paper and then tell people on the outside 'Oh yeah, we're integrated.'"

The back-office systems and other processes that much of the outside world does not see are all integrated now. But one tangible sign of that coming together can be seen in the company's key technology priorities and how they apply to the larger business strategy.

Enter into the equation Todd Borkey, chief technology officer for the entire HII corporation. He was Alion's CTO prior to the transaction and took on the same role for Mission Technologies post-close.

Green pointed out that HII never had a CTO at the corporate level before Borkey joined the company, which views the role as applying to both sides of its operation. That comes into play with how HII looks at artificial intelligence, for instance.

Many customers across the Defense Department and combatant commands certainly have ideas for using AI, but Green said HII can also "use it within the shipyards to improve manufacturing processes."

Cybersecurity, electronic warfare, training, unmanned and autonomous systems, and the "C5ISR" information dominance concept are where HII focuses much of its tech attention. Green also singled out spectrum management as one area HII has keyed on within EW.

HII's push to be a leader in unmanned and autonomous systems is also one that draws on the company's lineage in shipbuilding, both of surface vessels and submarines.

That effort accelerated in early 2020 when HII acquired the unmanned underwater vehicle maker Hydroid for $350 million.

"Initially, people would question 'Are unmanned systems going to replace submarines?' Well no, they do different missions," Green said. "Especially now as we get closer and closer to perfecting launch and recovery within that submarine... what that does is it extends the reach of that submarine."

Case in point for HII: the December 2023 launch and recovery of an HII Remus vehicle from the torpedo tube of the USS Delaware submarine. The way HII and its Navy customer see things, the ability to deploy a drone through an existing hatch creates new opportunities for surveillance and other missions.

"That submarine can still do everything it could do before, but it can also do a lot more things because now you can put a few unmanned vehicles in there," Green said.

Submarines of the nuclear variety also represent the first pillar of AUKUS -- the trilateral security arrangement that the governments of Australia, the U.K. and U.S. signed onto in September 2021.

Australia will be the center for much of the alliance's activity, given that country's proximity to China and Taiwan, with the larger goal of enhancing security across the Indo-Pacific region.

HII is obviously tracking AUKUS' first pillar with key interest and not just on building the subs themselves. Green highlighted the infrastructure that has to be set up, the training to operate the subs and needed component building as other aspects to watch.

Pillar two of AUKUS is all about the software and data-centric technologies that are "very much aligned with our priorities," Green said.

All three governments involved in AUKUS have also called out technology transfer and export control regulations as items they need to work on with those discussions happening right now.

"The government's working on that right now and once they get that straightened out, it's going to make things a lot easier," Green said. "It's a great opportunity for us."

(A future episode of WT 360 will present the full interview with Green)