Navy's Fleet Redesign: Fincantieri Pivots from Frigates to Future Ships

TRIESTE, Italy – November 25, 2025 – In a move that sends ripples across the global defense industry, the U.S. Navy and Italian shipbuilding giant Fincantieri have fundamentally reshaped the future of the Constellation-class frigate program. The decision to discontinue contracts for four of the advanced warships is not a simple budget cut; it is a clear signal of a profound strategic pivot by the Navy toward a more technologically advanced, flexible, and sustainable fleet. For Fincantieri, this disruption has become a blueprint for agile adaptation, transforming a potential setback into a reinforced strategic partnership that secures its role at the heart of America's naval future.

The agreement, reached after a comprehensive fleet review by the Navy, will see Fincantieri Marinette Marine (FMM) in Wisconsin continue construction on the first two frigates, USS Constellation and USS Congress. However, the contract for four subsequent ships has been terminated for the Navy's “convenience.” In exchange, Fincantieri receives indemnification for its investments and, more importantly, a place at the front of the line for new orders in emerging high-priority areas, including amphibious, icebreaking, and special mission vessels. This strategic realignment underscores a new reality in defense procurement: adaptability and alignment with future naval doctrine are now more valuable than adherence to legacy plans.

A New Doctrine for Naval Dominance

The U.S. Navy's decision stems from a critical reassessment of its global posture and the evolving nature of maritime warfare. Faced with adversaries rapidly expanding their own naval capabilities, the Pentagon has prioritized speed, technological superiority, and a new “hybrid fleet” concept. This future force envisions a combination of 381 manned warships seamlessly integrated with up to 150 large unmanned surface and underwater vessels by 2045.

The Constellation-class program, once a cornerstone of the Navy's small surface combatant strategy, fell victim to this paradigm shift. Based on the successful European FREMM frigate, the American version became laden with extensive design modifications intended to meet stricter U.S. survivability standards. These changes cascaded into significant production delays and cost overruns, pushing the delivery of the first ship from 2026 to at least 2029 and adding an estimated $1.5 billion in costs. In an environment where “speed to delivery” has become a mantra from the Secretary of the Navy's office, such a timeline was untenable.

This pivot reflects a broader intolerance for program instability. The Navy is signaling to the entire defense industrial base that it will no longer wait years for over-customized platforms. Instead, the focus is on mature designs, modularity, and the rapid integration of both manned and unmanned systems. The goal is to build a more distributed, resilient, and lethal force capable of operating across multiple domains, and the legacy frigate program no longer fit that accelerated vision.

The Art of the Strategic Pivot

While the cancellation of four ships could have been a major blow, Fincantieri has navigated the change with strategic foresight, demonstrating a model of public-private partnership resilience. The agreement ensures the Italian shipbuilder is not penalized for the Navy's strategic shift. The indemnification clause protects the company from the economic impact of the terminated contracts, safeguarding the more than $800 million it has invested across its four U.S. shipyards in Wisconsin and Florida.

This massive investment has been key to its strategic positioning. By modernizing its facilities and expanding its skilled workforce—recently adding 850 workers to reach a total of 3,750 in the U.S.—Fincantieri has proven its long-term commitment to the American maritime industrial base. This commitment has built a deep reservoir of trust with the Navy, allowing for a collaborative solution rather than a contentious contract dispute.

George Moutafis, CEO of Fincantieri Marine Group, highlighted this dynamic, stating, “The agreement reached with the U.S. Navy marks a new chapter in our strategic partnership, built on mutual trust, a shared vision and commitment to excellence.” He emphasized that the new path forward provides “the necessary stability for our teams and the entire Wisconsin System of Yards, allowing us to continue investing in innovation and skills.”

By embracing the Navy’s new direction, Fincantieri has secured its position as a key partner in defining the next generation of American sea power. It is now poised to capture contracts for vessels that are central to the Navy's future, from amphibious ships vital for expeditionary operations to specialized platforms that will support the burgeoning fleet of unmanned systems.

Securing the Industrial Heartland

This high-level strategic maneuvering has tangible consequences on the ground in Wisconsin, the heart of Fincantieri's U.S. operations. The agreement is carefully designed to maintain the viability of the shipyards and their highly skilled workforce. The continuation of work on the first two Constellation-class frigates provides an immediate workload, preventing the sudden disruption that a full program cancellation would have caused.

More significantly, the promise of new vessel types ensures long-term “workload visibility.” The “Wisconsin System of Yards”—encompassing facilities in Marinette, Sturgeon Bay, and Green Bay—will not be idled. Instead, it will pivot. The expertise and production lines developed for the frigate program will be adapted to build the amphibious ships, icebreakers, and other complex vessels the Navy now prioritizes. This transition maintains job stability and capitalizes on the skills cultivated through years of investment and training.

This represents a critical component of the much-discussed “renaissance of U.S. shipbuilding.” It’s not just about building more ships, but about creating a resilient and adaptable industrial base capable of responding to shifting national security needs. The Fincantieri agreement ensures that this vital hub of American manufacturing will be building the ships of the future, rather than being locked into a program of the past. The focus now shifts to retraining and retooling, preparing the workforce for the unique demands of constructing different classes of naval platforms.

Reshaping the Defense Industrial Base

The ripple effects of the Navy's decision extend far beyond Fincantieri. The move is a clear directive to the entire defense contracting landscape: innovate and deliver efficiently, or risk being left behind. Competitors like Huntington Ingalls Industries and General Dynamics Bath Iron Works, while secure with their contracts for large destroyers and amphibious ships, are undoubtedly taking note. The Navy's willingness to make drastic changes to a major program puts everyone on notice that schedule performance and design stability are paramount.

The market is clearly shifting toward a hybrid model where traditional shipbuilders must also become experts in integrating autonomous systems and modular technologies. The new vessel opportunities opening up for Fincantieri—such as support ships for unmanned platforms or new classes of small, fast combatants—reflect this new reality. The company’s readiness to engage in the development of both manned and unmanned surface combatants positions it perfectly for this evolving market.

Ultimately, the reshaping of the Constellation program is a microcosm of a larger transformation within the U.S. military. It is a decisive step away from the slow, incremental procurement processes of the past and toward a more dynamic and responsive model of industrial partnership. As Fincantieri and its Wisconsin workforce prepare to build the next generation of the U.S. fleet, they are not just building ships; they are helping to construct a new foundation for American maritime strategy.