Navy Yard gets $100 million investment to ramp up submarine manufacturing

The Navy Yard in South Philadelphia will receive a $100 million investment from maritime manufacturer Rhoads Industries to expand the company's fabrication of submarine parts in the coming years, Pennsylvania Gov. Josh Shapiro announced.

Rhoads Industries plans to double its production capacity at the Navy Yard by constructing a 95,000-square-foot facility that supports the U.S. Navy's submarine program. The investment will enable the company to add 450 new jobs and retain another 540 existing full-time positions.

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Rhoads specializes in large-scale metal fabrication, mechanical services and shipyard maintenance. The family-owned company has been based in Philadelphia for nearly 130 years and already operates on more than 300,000 square feet of heavy manufacturing space at the Navy Yard. Their involvement in submarine production has ramped up in recent years.

"At the beginning of 2023, we were doing very little submarine work," CEO Dan Rhoads said last Thursday at a news conference joined by Shapiro (D). "Right now, we have 350 people on submarines and probably in four years, we'll have about 1,000 people on submarines."

Rhoads said the company's main customer is Electric Boat, the General Dynamics Corp. subsidiary that serves as the primary builder of submarines for the U.S. Navy. The company also works with aerospace and defense contractor Northrop Grumman and provides direct repair and shipbuilding services for the Navy.

The investment will give Rhoads Industries access to an additional pier to speed up barge shipping of its products.

The state is investing $4 million to support Rhoads Industries' expansion, adding to more than $17 million in funding the company has received from Pennsylvania over the last decade.

"Just like generations before us, it’s Pennsylvania workers who will build what keeps our nation safe," Shapiro said. "We’re investing in that future because it’s good for our economy, our communities and for the people of Pennsylvania.”

Shapiro said the company's plans include developing a new pipeline for jobs in welding and other fields related to maritime manufacturing in South Philly. Rhoads will have paid, three-year apprenticeships for technical school graduates to pursue careers in the submarine industry. The company is partnering with Boilermakers Local 19 for recruitment, and it expects to add about $44 million in payroll in the years ahead.

The Navy Yard has been owned by the Philadelphia Industrial Development Corp. since 2000 — four years after the Navy ceased operations there — and has undergone major redevelopment under PIDC. The campus of the former naval base is now home to about 150 employers and more than 16,000 employees across the health care, industrial, retail and tech sectors.

Over the next two decades, about 109 acres at the Navy Yard will be redeveloped into a mixed-use waterfront neighborhood with roughly 4,000 residential units. In May, the state invested $30 million in the Navy Yard to support another arm of PIDC's redevelopment plan that will attract new investment in the life sciences and other industries.