The ongoing debate over how to surge ship production for the U.S. Navy has centered on reactivating idled facilities as a sensible way forward.1 However, this approach overlooks the skilled labor force that would be needed to man these reactivated yards, which, unlike the facilities themselves, cannot be rapidly created or easily retained. An earlier attempt to pursue this same course—the failed resurrection of Cramp Shipbuilding Company between 1940 and 1946—shows that while the physical plant and financial capital hold great importance, human capital determines the survival or collapse of a shipyard. Any attempt to expand U.S. shipbuilding beyond its current footprint must make adequate preparations on this front or it will not succeed.
Rise and Fall: Cramp & Sons
Founded in 1830 in the Kensington neighborhood of Philadelphia, William Cramp & Sons was at one time the largest shipbuilder in the United States. Cramp was unique in its management’s ability to strike a profitable balance between flexibility and specialization, which enabled the company to survive the late–19th century transition from wood and sail to steam and steel. Adapting quickly to new technology and acting aggressively to acquire needed skilled labor before its competitors, the firm built everything from transatlantic liners to U.S. battleships to cruisers for the Imperial Russian Navy.2
As merchant demand dropped and competition for naval contracts increased in the early 20th century, Cramp and its competitors narrowed the range of contracts they bid on to cut down on the skills required and thereby save money, gradually specializing in building one or two ship types. Cramp, which concentrated on medium-sized passenger vessels and surface combatants, built 46 destroyers and five light cruisers for the U.S. Navy between 1917 and 1924.
The total collapse of demand for new civilian shipping after World War I ultimately forced Cramp to rely almost entirely on Navy contracts. When the Navy’s Clemson-class destroyer program was completed and contracts for those vessels dried up, the yard shifted its military focus entirely to cruisers from about 1921 on. While not as intensive to build as battleships, cruisers nevertheless carried armor plate and large turrets that destroyers lacked. Acquiring and keeping the specialists, such as chief engineer John Metten, that these components required contributed to steep increases in overhead costs, severely limiting Cramp’s profit on the few contracts it won.3
Two events doomed the original Cramp shipyard. In 1919, the yard was acquired by W. Averell Harriman’s American Shipping and Commercial Corporation, which separated Cramp’s support facilities (such as brass and iron casting) into separate entities, while its financial reserves were siphoned off to prop up Harriman’s other ventures.4 Then, in 1922, the United States signed the Washington Naval Treaty, which implemented a strict naval arms limitation system and virtually eliminated large military contracts. Cruisers, which initially were not covered by the treaty system, became highly sought after contracts and their bidding process hypercompetitive.
Already burdened with dangerously slim profit margins and low cash reserves, Cramp’s attempts to undercut its competitors in the mid-1920s fatally damaged its finances. Cramp won one further contract to build the heavy cruiser Salt Lake City (CA-25) but was unable to complete it before running out of money. The yard was closed on 19 October 1927, its machine tools sold off, and its workforce dispersed. The facility sat, unoccupied and rotting, for the next 13 years.5
Resurrection: Cramp Shipbuilding
Between 1923 and 1933, shipyards across the United States struggled to survive the lack of military contracts, then the Great Depression. The latter event eventually motivated change—not to save the shipyards or build up the Navy, but to stimulate the collapsed U.S. economy. At the urging of the Franklin D. Roosevelt administration, Congress passed the Industrial Recovery Act of 1933 in June of that year with an eye to building the Navy to the limits of the treaty system. The capacity of the surviving shipyards was largely adequate to meet the resulting demand throughout the 1930s. It was not until the Two-Ocean Navy (or Vinson-Walsh) Act of July 1940, which called for the rapid construction of an additional 1.3 million long tons of warships, that serious investigations into the quickest way to expand warship construction began.6 The obvious solution was to expand existing public and private shipyards. This ran into two main problems: the lack of space in the urban areas in which many yards were located, and the hesitance of the major private yards—all too familiar with lean times in which contracts were scarce—to expand at their own expense. So, instead, Congress seized on the idea of reopening and revitalizing the decaying Cramp shipyard. While its facilities were outdated and in disrepair, and the yard possessed only a handful of small slipways, many in Congress and the Navy believed an infusion of funding would revive the yard quickly enough to significantly benefit the service. In 1940, Rear Admiral Samuel M. Robinson, chief of the Navy’s Bureau of Ships, approached Harriman about reopening the yard as a private company.
Harriman was not enthusiastic about reentering the shipbuilding business. Cramp’s buildings needed to be rebuilt, the yard needed new shop tools, slipways had to be enlarged, and specialized management and labor familiar with turret and armor production had to be found. Fortunately, money could solve many of these problems; negotiations eventually resulted in an agreement to settle the old company’s debts and reopen the firm as Cramp Shipbuilding. This included an infusion of $12 million from the Navy’s budget to rehabilitate the site.7
But specialized management and labor proved a far more complex problem. The majority of former Cramp employees had either moved on to other professions or left the workforce entirely. When John Metten—who had transferred to New York Shipbuilding to supervise completion of the Salt Lake City and remained there afterward—declined to get involved, Cramp Shipbuilding was forced to start from scratch.
How Not to Run a Yard
Not only did the lean interwar period result in a dearth of contracts and a number of shipyard closures, but it and the Great Depression also shrank the military shipbuilding labor pool. Twentieth-century warships required varying degrees of specialized work that commercial shipbuilding did not, particularly in turret production and armor working. As military orders accelerated in 1940, there simply was no specialized labor or management available. Complicating this further was the interwar transformation of the shipbuilding process from one in which vertically integrated shipyards produced many components on site, to one that relied heavily on subcontractors for complex parts. While this “shipyard as assembly yard” process somewhat reduced the shipyards’ need for specialized labor, it greatly increased the importance of experienced managers, such as Metten, who could juggle the increasingly complex contracts, deliveries, and limited on-site specialists to complete jobs on time and on budget.8
In late 1940, the revitalized Cramp began its hunt for management and labor. As shipbuilding demands, re--armament, the draft, and lend-lease production ramped up, extreme demands were placed on what little skilled labor and yard resources remained in warship production. Cramp was forced to compete directly with already established companies. As a result, it fell back on managers largely bereft of experience in modern shipbuilding and labor that was either unskilled or poached from other companies. The brief tenures of the yard’s three presidents, James Reed (1940–41), William G. DuBose (1941–43), and Henry Rossell (1943–46), are the epitome of this problem, as all three struggled to balance the acquisition and maintenance of a highly skilled labor force with enough work to remain in business.
Recruiting enough labor to get work started occupied the majority of James Reed’s attention before his death. To help alleviate the shortage, Reed opened the Mastbaum Vocational School Annex in conjunction with the Philadelphia Department of Education in May 1941. Following a three-month introductory course at this institution, trainees received on-the-job training at the Cramp yard working on the Cleveland-class light cruisers that were the company’s first official contracts. The work resulting from this process was, to put it mildly, unsatisfactory. It also did little to alleviate the persistent shortage of supervisors at Cramp.9
William G. DuBose, Reed’s successor, was a recently retired rear admiral and former head of the Navy’s Bureau of Construction and Repair but lacked yard management experience. In pursuit of sustainable profits, he pushed to break Cramp’s focus on cruisers and increase its flexibility, committing the yard to Balao-class submarines and the repair and refit of a variety of vessels. However, this stretched the already thin labor force even thinner and required obtaining workers with different specialized skills. Widespread delays resulted, prompting management to compel workers to carry out tasks for which they were neither trained nor contracted. The mood in the shipyard declined, resulting in labor strife and work stoppages—exceedingly rare occurrences for a shipyard constructing warships during World War II—which ultimately led to DuBose’s downfall.10
Cramp’s last president was Henry Rossell, a professor at the Massachusetts Institute of Technology. While Rossell was an expert on theories of flexible production, he had never served in a management capacity for a working shipyard. Like DuBose, he did not understand the reality of a limited skilled labor pool. Thus, although Rossell was hired to both smooth labor relations and get production schedules back on track, his continuation and even expansion of DuBose’s policies accomplished neither. Poor management exacerbated lingering discontent among shipyard workers. Cramp experienced the single largest naval shipbuilding strike of the war in January 1944. These labor problems contributed to excessive overhead that ensured Cramp could not compete for civilian contracts as Navy shipbuilding slowed at the end of World War II. Cramp closed for good in 1946, and its hard-won workforce dispersed.11
A Changed World with the Same Problems
Despite a radically changed landscape, the U.S. Navy is again in a situation that seems to demand a surge in shipbuilding capacity with a skilled labor pool severely diminished by years of limited contracts.12 While the majority of proposed solutions revolve around expanding existing facilities, many of these schemes run into the same problems that doomed the attempt to resurrect Cramp. Specifically, three primary lessons from Cramp Shipbuilding’s failure should be taken to heart today.
First is the need for management with experience in the industry and in standing up new facilities. The need for individuals with sufficient experience to make smart calls on difficult problems, particularly in balancing specialization and flexibility in the labor pool, cannot be overstated. With Cramp Shipbuilding, deficiencies in this category resulted in executive overreach, first on a recklessly wide variety of contracts and second in labor management.
Second, all good intentions for expanding shipyard capacity founder on the shortage of specialized labor. The pool of skilled labor available to current U.S. shipyards is exceedingly small. Like with Cramp in 1940, additional workers would have to be found and trained in vocational schools that do not, as yet, exist. This training is neither brief nor easy and is not generally transferable from other fields. It would take time to generate enough trained workers to expand yards on an appreciable scale.
Third, should the specialized labor pool be expanded successfully, this workforce would need to be retained. Because of the degree of specialization required in naval shipbuilding, both iterations of Cramp and their competitors depended on a steady diet of government contracts. Modern shipyards face the same dilemma. With no guarantee of work after the Navy’s current surge needs are met, workers would be forced to depart the labor pool to find alternative employment once again. The expansion effort could merely perpetuate the cycle of expansion and collapse of the U.S. shipbuilding industry.13
Any attempt to expand U.S. shipbuilding capacity would be well advised to carefully consider these three failings of Cramp Shipbuilding. If not, any effort at expanding capacity outside existing yards is likely to fail.
1. Craig Hooper, “Long Abandoned, Bay Area Hunters Point Navy Shipyard Can Be a New Base,” Forbes, 21 October 2023.
2. Gail E. Farr and Brett F. Bostwick, A History and Guide to Collections of the William Cramp & Sons Ship and Engine Building Company (1830–1927) and the Cramp Shipbuilding Company (1941–1946) of Philadelphia (Philadelphia, PA: Philadelphia Maritime Museum, 1991), 7–13.
3. Farr and Bostwick, A History and Guide, 13; and Thomas B. Heinrich, “Jack of All Trades: Cramp Shipbuilding, Mixed Production, and the Limits of Flexible Specialization in American Warship Construction, 1940–1945,” Enterprise & Society 11, no. 2 (June 2010): 279–80.
4. Thomas Heinrich, Warship Builders: An Industrial History of U.S. Naval Shipbuilding, 1922–1945 (Annapolis, MD: Naval Institute Press, 2020), 12.
5. Farr and Bostwick, A History and Guide, 13–14; and Heinrich, Warship Builders, 279–80.
6. Heinrich, “Jack of All Trades,” 281–82; and Heinrich, Warship Builders, 92.
7. Heinrich, “Jack of All Trades,” 282.
8. Harold G. Bowen Sr., Ships, Machinery, and Mossbacks: The Autobiography of a Naval Engineer (Princeton, NJ: Princeton University Press, 1954), 55–57.
9. Heinrich, “Jack of All Trades,” 286–88.
10. Heinrich, “Jack of All Trades,” 300, 304–6.
11. Heinrich, “Jack of All Trades,” 307–8.
12. Ronald O’Rourke, Navy Major Shipbuilding Programs and Shipbuilders (Washington, DC: Congressional Research Service, 1996), 13–30.
13. Craig Hooper, “Navy Shipbuilder Austal Limited Needs a New Owner or Lots More Cash,” Forbes, 30 October 2023; and Ronald O’Rourke, Navy Shipbuilding: Recent Shipyard Mergers (Washington, DC: Congressional Research Service, 2002).
