Leonardo DRS Signs Land Lease to Build State-of-the-Art Naval Propulsion Manufacturing and Test Facility Near Charleston, S.C.

Rhea-AI Summary

Leonardo DRS, Inc. (NASDAQ: DRS) signs a ground lease in Charleston, SC to develop a new manufacturing facility for naval propulsion systems. The $120 million investment will enhance the company's support for U.S. Navy programs, including the Columbia-class ballistic missile submarine. The facility will boost manufacturing, integration, and testing capabilities, creating a national asset for addressing current and future Navy needs.

Defense Industry Analyst

The establishment of a new manufacturing facility by Leonardo DRS represents a strategic expansion of the company's naval propulsion capabilities. This move is closely aligned with the U.S. Navy's priority programs, particularly the Columbia-class ballistic missile submarine, which is a cornerstone of the nation's nuclear triad. The investment of approximately $120 million underscores the commitment to long-term growth in this sector and the significance of defense contracts in driving revenue for companies like DRS.

From an industry perspective, the expansion into the Charleston area is indicative of the broader trend of defense contractors seeking to enhance their manufacturing footprint in strategically located regions. The proximity to waterways for transportation is a logistical advantage that can streamline the delivery process of large components to shipbuilding customers, potentially reducing costs and lead times.

The economic impact of such a facility is multifaceted. It is likely to create direct employment opportunities and stimulate the local economy through the development of a network of regional business partners. Moreover, the collaboration with universities and other organizations could foster innovation and skill development within the community, contributing to a more robust defense industrial base.

Economic Development Expert

The announcement by Leonardo DRS to develop a new facility in South Carolina is a significant economic development for the region. The projected investment and the specialized nature of the manufacturing and testing space suggest a substantial long-term commitment to the area. This initiative is poised to create job opportunities, not just within DRS but across the supply chain, potentially leading to a ripple effect of economic prosperity in the Charleston metropolitan area.

Moreover, the collaboration with state and local governments, economic organizations and the private sector reflects a concerted effort to align business interests with regional economic growth objectives. Such partnerships are often critical in securing the necessary support and resources for large-scale developments and can be a model for future public-private collaborations in the sector.

Additionally, the emphasis on building relationships with local universities and organizations indicates a strategic approach to workforce development. By fostering these connections, DRS is likely to benefit from a pipeline of skilled labor, while the educational institutions may see an increase in enrollment for relevant programs, further enhancing the local skill base.

Supply Chain Management Expert

The strategic decision by Leonardo DRS to invest in a purpose-built facility for manufacturing and testing naval electric propulsion system components is a significant move in supply chain optimization. The integration of various components, such as solid-state drives, electric motors, control systems and cooling equipment, under one roof can lead to improved efficiencies and quality control.

Access to barge transportation is a critical logistical element, as it facilitates the movement of large assemblies to shipbuilding customers. This direct access to transportation routes could provide DRS with a competitive edge by reducing transportation complexities and costs associated with moving oversized cargo. Such logistical considerations are crucial for maintaining a lean and responsive supply chain in the defense industry, where precision and timing are paramount.

The presence of this facility may also encourage the development of a localized supply chain ecosystem, as suppliers and partners may establish operations nearby to capitalize on the proximity to DRS. This could result in reduced lead times and further cost savings, while also increasing the supply chain resilience by minimizing reliance on distant suppliers.

Facility will boost company capability to support U.S. Navy priority programs and spur economic growth in region

ARLINGTON, Va.--(BUSINESS WIRE)-- Leonardo DRS, Inc. (NASDAQ: DRS) announced today that it has signed a ground lease in the Charleston, South Carolina metropolitan area to develop a state-of-the-art manufacturing facility, allowing the company to grow its naval propulsion capability and streamline its support of priority U.S. Navy programs.

When complete there will be over 140,000 square feet of purpose-built advanced manufacturing, assembly and testing space representing an approximate net investment of $120 million by DRS. The new capabilities made possible by this investment will play a key role in the continued expansion of propulsion system integration and testing for the company. Initial occupancy is targeted for 2026.

“We are proud to be building the next-generation electric propulsion system components for the new Columbia-class ballistic missile submarine,” said Leonardo DRS CEO, Bill Lynn. “This new facility in South Carolina expands our capability to support our U.S. Navy customers on this and other critical programs that enhance the nation’s submarine industrial base,” he added.

When completed, the facility will have the capability to manufacture, integrate and test large components for DRS’s advanced naval electric propulsion systems. The components include solid-state drives, designed and manufactured in the new DRS Menomonee Falls, WI. facility; electric motors designed and manufactured in the DRS facility in Fitchburg, MA.; control systems designed and manufactured in the DRS facility in Danbury, CT., and cooling equipment designed and manufactured in the DRS facility in High Ridge, MO. The South Carolina facility will have direct access to barge transportation on the local waterway and out to the open ocean for shipping these large assemblies to the company’s shipbuilding customers.

“This facility represents a significant milestone in our ongoing collaboration with the U.S. Navy. We expect the unique capabilities in this new facility to be a national asset capable of addressing the Navy’s current and future needs,” said Jon Miller, senior vice president and general manager of the Leonardo DRS Naval Power Systems business.

Additionally, the new facility will also play an important role in spurring economic growth in the region through building a network of regional business partners, universities and other organizations that will work closely with DRS.

Leonardo DRS partnered with a team across state and local governments, as well as regional economic organizations and the private sector to bring this project to the greater Charleston area.

About Leonardo DRS

Headquartered in Arlington, VA, Leonardo DRS, Inc. is an innovative and agile provider of advanced defense technology to U.S. national security customers and allies around the world. We specialize in the design, development and manufacture of advanced sensing, network computing, force protection, and electric power and propulsion, and other leading mission-critical technologies. Our innovative people are leading the way in developing disruptive technologies for autonomous, dynamic, interconnected, and multi-domain capabilities to defend against new and emerging threats. For more information and to learn more about our full range of capabilities, visit www.LeonardoDRS.com.

Forward-Looking Statements

This communication contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements reflect current expectations, assumptions and estimates of future performance and economic conditions. The company cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240227236373/en/

Leonardo DRS Investor Relations Contacts

Steve Vather

Vice President, Investor Relations and Corporate Finance

+1 703 409 2906

stephen.vather@drs.com



Leonardo DRS Media Contact

Michael Mount

Vice President, Communications and Public Affairs

+1 571 447 4624

mmount@drs.com

Source: Leonardo DRS, Inc.

FAQ

What is the purpose of Leonardo DRS, Inc.'s new facility in Charleston, SC?

The purpose of the new facility is to develop a state-of-the-art manufacturing facility to grow the company's naval propulsion capability and support priority U.S. Navy programs.

What is the approximate net investment in the new facility by Leonardo DRS, Inc.?

The approximate net investment in the new facility is $120 million.

What components will the South Carolina facility manufacture for Leonardo DRS, Inc.'s naval electric propulsion systems?

The facility will manufacture solid-state drives, electric motors, control systems, and cooling equipment for the company's advanced naval electric propulsion systems.

When is the targeted occupancy for the new manufacturing facility in Charleston, SC?

The targeted occupancy for the new facility is in 2026.

Who is the CEO of Leonardo DRS, Inc.?

The CEO of Leonardo DRS, Inc. is Bill Lynn.