The Scoop
Former Navy Secretary John Phelan — ostensibly fired due to insufficient progress on a new US shipbuilding plan — circulated a draft shipbuilding proposal before his ouster, reviewed by Semafor, that appears largely identical to the official version his successor released.
Acting Navy Secretary Hung Cao released the Trump administration’s shipbuilding plan for fiscal year 2027 last month, shortly after replacing Phelan. His final published version mimics most of the proposal that Phelan’s office had developed, with large swaths of text copied verbatim or near-verbatim, including identical specific policy plans.
“The Navy is transforming its warfighting requirements and implementing processes to prioritize speed to capability,” both documents read. “Overly prescriptive or ambiguous, and subsequently changing, requirements have too often led to years-long delays, stalled programs and stagnation. We will enforce strict discipline on requirements change.”
The virtually unchanged shipbuilding plan raises questions about whether the pace of shipbuilding will change under the Navy’s new leadership, and whether Phelan was pushed out for reasons beyond reported disputes about that topic. Phelan, a private investment executive, was a longtime friend of and donor to President Donald Trump before getting tapped as his second-term Navy secretary, a role typically held by a civilian.
Other sources familiar with the situation told Semafor that Phelan’s April firing had more to do with personnel disputes between him and top leadership at the Defense Department — a theory reported in some outlets at the time that’s bolstered by the similarities in the plans and comments made by Trump.
Trump’s second term is studded with fallen advisers who fell out of favor after perceived missteps, at times while maintaining the president’s public vote of confidence right up until the end of their tenure. Phelan was no exception.
“He’s a wonderful guy,” Trump said of Phelan after announcing his departure. “But he had some conflict with, not necessarily Pete, with some other[s] … Mostly as to building and buying new ships; I’m very aggressive at the new shipbuilding, and somehow he just didn’t get along with them.”
Following the release of the shipbuilding plan, Cao took to X to highlight the administration’s efforts to combat US adversaries like China. In a video, he promised not to “accept the status quo” and said the administration is “ushering in a shipbuilding renaissance.”
“What is the Golden Fleet? Think of today’s Navy, but much bigger, with a mix of exquisite capital ships with capable smaller ships fighting in concert with robotic and autonomous systems,” Cao says. “Our plan is ambitious and achievable.”
A Navy spokesperson referred Semafor to the service’s new shipbuilding plan. Phelan declined to comment.
Know More
The Trump administration has ramped up its focus on shipbuilding as the US tries to maintain and surpass competitors. In recent years the Navy has struggled to keep up with that effort, with shipbuilding historically being over budget and behind in schedule.
The release of the Navy’s shipbuilding plan was months in the making, coming on the heels of Phelan’s departure. The draft document reviewed by Semafor that Phelan’s office circulated around the Pentagon lists a date of April 21, one day before he was relieved of his role. These plans typically are the culmination of months of work.
In another portion of Cao’s published shipbuilding plan, the Navy notes that its 30-year shipbuilding agenda includes a total vessel inventory of 395 ships, with the budget requesting funding for “34 manned ships and five unmanned platforms” for 2027.
Those numbers, as well as the numbers for future fiscal years, remain the same as the draft proposed under Phelan. The Navy remained consistent with its promise to deliver a total of 122 manned ships and 63 unmanned platforms over the course of five years.
Both documents also lay out the same theories on the administration’s “Golden Fleet” and contain the same strategies for acquisitions, as well as the same summaries on investments.
“Our message for industry is straightforward: we owe you clear, stable requirements. You owe us delivery on time and within budget,” read both documents, in a section on changing the initiatives of the Navy.
“Significant levels of structural expense growth continue to diminish the Navy’s purchasing power to execute our shipbuilding plan, especially as programs fail to meet budget and delivery timeframes.”