Huntington Ingalls Industries (HII) SWOT Analysis

Huntington Ingalls Industries (HII) SWOT AnalysisBrief Comp any HistoryHuntington Ingalls Industries (HII), was founded on exhibit 31, 2011 when Northrop Grummans Ship craping Sector was spun off as an independent familiarity. HII is headquartered in Newport News, Virginia. HII is Americas largest military shipbuilding company and a appropriater of passkey endure to partners in administration and industry. For more than 130 years, HIIs Newport News and Ingalls Shipbuilding pass water built more ships in more ship configurationes than any separate U.S. naval shipbuilder. The Technical Solutions percentage provides a wide feed of professional service through its Fleet Support, Integrated Missions Solutions, atomic and Environmental, and Oil and bollocks groups. HII is headquartered in Newport News, Virginia, and employs nearly 37,000 concourse operating both house servantally and internationally (Who We Are, 2017).Integrity, safety, honesty, engagement, responsibility and performance atomic number 18 the value that guide Huntington Ingalls Industries. Putting these values into practice creates long-term benefits for employees, customers, shareholders, communities and suppliers (Company Values, 2017).The HII incorporate Governance addresses the relationship of the notice of directors, vigilance and stockholders with the objective of promoting the companys long-term success, improving company performance and representing the interests of the stockholders. The board get out provide advice on the corporate strategy real by forethought, advance risk, select a chief executive officer, oversee development and term plans for senior executives, monitor financial performance and oversee processes that maintain the fairness of the company (Proxy Statement, 2015).StrengthsHuntington Ingalls Industries (HII) is the largest military shipbuilder in the U.S., HII and also provides support services to thermonuclear energy and oil and gas industries. Wi th divisions in Virginia and Mississippi, HII has built more ships in more ship classes than any separate U.S. shipbuilder. HII is the sole cite supplier of U.S Navy aircraft carriers and is the exclusive supplier of refueling services for nuclear-powered aircraft carriers (Who We Are, 2017). attention experience is one of HIIs major strengths. For over a century, HII has provided the U.S. military with character ships (Who We Are, 2017).HII prides itself on a diverse labor force of over 35,000 people operative in domestic and external mendings. HII is the largest industrial employer in the states of Virginia and Mississippi. HII has the faculty to build three-fold products at the same time (Who We Are, 2017).HII has the skills, the knowledge and the facilities to build multiple products at the same time. There are currently intravenous feeding varied classes of military ships being built at the Mississippi location at this time (Who We Are, 2017).HII has the physical cap acity for appendd production. HII continues to invest hard in the physical infrastructure of its shipbuilding divisions as closely as former(a) divisions. Continued improvements and facility upgrades places HII in a position to increase workload (Annual say, 2015).HII maintains a strong and independent board of directors. The board follows Corporate Governance Guidelines which promote responsible business practices and good corporate citizenship. The board promotes practices that support the interests of the stockholders, employees, customers and suppliers (Proxy Statement, 2015).In recent years HII has invested heavily in immature technology. HII owns a large portfolio of proprietary cerebral property and license intellectual property rights to and from other companies (Annual Report, 2015).Weaknesses Huntington Ingalls Industries (HII) suffers from a limited customer base. U.S. defense shipbuilders birth only two consistent customers the U.S. government and international p artner nations. HII verbalisms a lack of technology knowledgeable workers (Spring 2016 pains Study, 2016).Many of the employees are semiskilled(prenominal) with new technology and workforce training is needed to compete with domestic and foreign competitors. U.S. shipbuilders are considered, on average, to be twenty years crapper international shipyards regarding advanced technology (Spring 2016 Industry Study, 2016).Physical infrastructure of shipyards akin HII are difficult and expensive to maintain. Facilities include docks, work areas, machine shops, ready reckoner memory areas and shelters, heavy equipment and assembly areas. The facilities must include dock areas and piers with service facilities for give the bounce mains, electrical power, compressed air and fresh water (Shipbuilding and Repair, 2017).HII faces a broad(prenominal) rate of labor turnover. Obtaining and retaining a skilled workforce is a riddle set about by most shipyards. Employment digest be rota ry forceing in hiring during upcycles and layoffs during downturns. Skilled workers leave for higher pay in other industry much(prenominal) as construction (Shipbuilding and Repair, 2017).HII faces a highly competitive market both domestic and foreign. Intense competition relating to programs, resources and funding are characteristics of the defense shipbuilding industry. Work is sometimes shared between multiple companies for major programs (Spring 2016 Industry Study, 2016).OpportunitiesNew markets are opening for Huntington Ingalls Industries (HII). The new LX(R) amphibian ship program was secured by the Ingalls Shipbuilding division. The Stoller Newport News division was developed for nuclear operations and milieual services capabilities. HII provides a wide modification of products and services to the commercial energy industry and other government customers. The HII public Solutions Group is positioned to take a single-valued function in the unman subaquatic vehicle m arket. UniversalPegasus International division has 22 offices worldwide providing engineering, project way and field services (Annual Report, 2015).World unrest ever creates demand for reinstates and sustentation for existing ships and design and build of new ships for the U.S. military. This also provides the opportunity for sales to U.S. allies and partners to promote the strengthening of the global partner network to aliment international order in balance (Spring 2016 Industry Study, 2016).HII has the benefit of government assistance to pay for training for new workforce. The U.S. government has several different programs for grants for training the local workforce (Spring 2016 Industry Study, 2016). More than 1,400 apprentices are train by the shipbuilding units in more than 26 crafts (Annual Report, 2015).New hales opportunities fix recently been secured by HII. The Newport News division has recently received the contract to kick off the advance fabrication of aircraft carrier CVN 80. The Ingalls Shipbuilding division will begin fabrication of the destroyer DDG 123 and will begin the ordinal National Security Cutter for the U.S. Coast Guard (News Releases, 2017).Due to the situation that HIIs largest single customer is the U.S. brass, political climate plays a large role in the stability of the company. Most of the companys revenues for 2015 were a direct result of sales to the U.S. Navy and Coast Guard. The current political climate is encouraging for increase military spending and growth (Annual Report, 2015).HIIs recent strategic acquisitions are judge to continue fuel growth. The Stoller Newport News Nuclear (SN3) group is a full-service nuclear operations and environmental services company focused on U.S. segment of Energy (DOE) and U.S. Department of Defense (DoD) clients. The Undersea Solutions Group (USG) develops and builds specialized manned and unmanned undersea vehicles for military customers around the world. UniversalPegasus I nternational (UPI) provides world class expertise, efficiency and value in project management, engineering and construction management for the energy industry (Our Capabilities, 2017).The Jones coiffe (a portion of the Merchant Marine exploit of 1920) is a federal statue regulating maritime commerce in U.S. territorial waters and between U.S. ports. Ships must be owned by U.S. citizens, crewed by U.S. citizens or permanent residents, built by U.S. shipyards and operate under U.S. laws. The Jones Act protects domestic shipyards by requiring domestic carriers to utilize U.S. shipyards for new builds maintenance and repair (Spring 2016 Industry Study, 2016).U.S. Navy and Coast Guard ships are required to be built in U.S. shipyards. This provides HII and other domestic military shipbuilders with the assurance of obtaining the on hand(predicate) contracts (Spring 2016 Industry Study, 2016).The major HII physical locations in Virginia and Mississippi offer the company a benefit of low er cost of living and lower operate scale. The South has few higher-paying jobs and is characterized by low cost-of-living adjusted pay. Issues pushing wages up or down include regional industry concentration, genteelness levels and housing cost (Maciag, 2015)Having multiple business segments provides HII with increased areas of business opportunity. The HII shipbuilding divisions have built more ships in more ship classes than any other U.S. naval shipbuilder. The Technical Solutions division provides a wide range of professional services through its Fleet Support services, Integrated Missions Solutions, Nuclear and Environmental, and Oil and Gas groups (Who We Are, 2017).ThreatsHuntington Ingalls Industries (HII) operates in a heavily regulated environment with many government imposed regulations. HII is routinely audited for compliance with applicable laws, regulations and standards. untimely or illegal activities foot result in fines, penalties, repayments or other damages. Certain findings can lead to suspension or debarment from future contracts or the loss of export privileges (Annual Report, 2015).Defense contractors such as HII are always a possible target for acts of terrorism. Operation of facilities may be cut off and cause the incurrence of higher cost for security or it can fold down operations for a period of time (Annual Report, 2015).HII and other U.S. shipbuilders face foreign competition ascribable to the fact that other countries such as Japan and South Korea provide subsidies or direct bullion payments to their shipbuilders. This enables foreign shipyards to sell their vessels at or below the cost of construction (Spring 2016 Industry Study, 2016).HII faces domestic competition from key rival General Dynamics. There is pictorial competition related to programs, resources and funding. Defense programs, conducted under binding contracts, allows companies that perform well to benefit from program continuity not found in noncombatan t industries (Annual Report, 2015).As a defense contractor, HII is a high-value target for cyber security threats due to the classified nature of information controlled by the HII information technology infrastructure. HII has faced attempts to gain access to classified and other sensitive information. A respite of the information technology infrastructure of physical facilities could cause significant retrieval and restoration expenses (Annual Report, 2015).HII has operations located in regions of the U.S. that have been impacted by severe weather such as hurricanes, tornadoes and floods. The damage and disruption can be significant and long-lasting. Natural disasters can disrupt workforce, electrical and computer infrastructure that are critical for normal operations (Annual Report, 2015).Approximately 50% of HIIs employees are covered by eight collective bargaining agreements. some(prenominal) of these agreements will expire in 2017 and 2018. While HII strives to maintain good working relations with labor unions, it is possible that there may be difficulties in negotiating expiring collective bargaining agreements. In the past there have been work stoppages, strikes and other labor disruptions (Annual Report, 2015).HII relies on other companies to provide raw materials, major components and sub-systems. Manufacturing costs can increase over the life of the contract. Some U.S. Government contracts require certain materials and components be purchased from approved sources. The inability of the sole-source supplier to provide the product in a timely manner can result in adverse effects on the financial position and cash flows for HII (Annual Report, 2015).HIIs manufacturing operations are subject to federal, state and local laws regarding environmental protection. Estimated costs are accrued to account for future incurred expenses. However, it is difficult to estimate these costs which can cause estimated remediation costs to change. Costs relating to envir onmental regulations can effect financial position, results of operations and cash flow (Annual Report, 2015).Political climate effects defense spending and therefore effects defense contractors such as HII. Changes in the governments priorities and spending could have an adverse effect on the availability of future contracts (Annual Report, 2015).ReferencesSpring 2016 Industry Study Final Report Shipbuilding Scholarly project. (2016). In The Eisenhower School. Retrieved from http//es.ndu.edu/Portals/75/Documents/industry-study/reports/2015/es-is-report-shipbuilding-2015.pdfShip Building and Repairing. (2017). Retrieved January 30, 2017, from https//business.highbeam.com/industry-reports/equipment/ship-building-repairingWho We Are. (n.d.). Retrieved February 01, 2017, from http//www.huntingtoningalls.com/who-we-are/Company Values. (n.d.). Retrieved February 01, 2017, from http//www.huntingtoningalls.com/who-we-are/company-values/Maciag, M. (2015, March 13). Where Wages Are Lowest an d Highest in America. Retrieved February 01, 2017, from http//www.governing.com/topics/mgmt/gov-metros-where-wages-are-lowest.htmlAnnual Report 2015. (2015, December). Retrieved February 03, 2017, from http//ir.huntingtoningalls.com/phoenix.zhtml?c=243052p=irol-reportsannualNews Releases. (n.d.). Retrieved February 04, 2017, from http//newsroom.huntingtoningalls.com/releasesOur Capabilities. (n.d.). Retrieved February 04, 2017, from http//www.huntingtoningalls.com/our-businesses/Proxy Statement 2015. (2015, December). Retrieved February 03, 2017, from http//ir.huntingtoningalls.com/phoenix.zhtml?c=243052p=irol-reportsannual