On November 25, U.S. Secretary of the Navy John Phelan announced via social media that based on the U.S. Navy’s own requirements, the Navy has reached a comprehensive framework agreement with Italian shipbuilder Fincantieri to terminate the construction plan for four Constellation-class frigates that had not yet started construction. The first two ships, USS Constellation (FFG-62) and USS Congress (FFG-63), will continue to be built at Fincantieri Marinette Marine (FMM) shipyard in Wisconsin.
Currently, the Constellation-class frigate program faces severe schedule challenges. The first ship, originally slated for delivery in April 2026, is now projected for delivery in April 2029—a delay of 36 months. John Phelan stated in a declaration: “The United States is reshaping its naval fleet construction model, with the first public initiative being the strategic withdrawal from the Constellation-class frigate program.”
On the same day, Fincantieri announced on its official website that it had reached a significant agreement with the U.S. Navy. The company emphasized that this agreement aims to reshape the future development direction of the Constellation-class frigate program to better meet the evolving needs of the U.S. Navy while strengthening the strategic partnership between the two parties.
It is also noteworthy that the agreement includes a key provision: since this order cancellation stems from a contract adjustment decision made by the U.S. Navy based on its own requirements, the agreement explicitly states that the U.S. Navy will compensate Fincantieri through relevant measures for the existing economic commitments and industrial impacts.
Fincantieri highlighted in its corporate news that the company anticipates securing new orders from the U.S. Navy in the future, including amphibious ships, icebreakers, and other specialized mission vessels. Concurrently, it will support the U.S. Navy in redefining its strategic options within the manned/unmanned small surface combatant domain.
Cancellations complicate shipbuilding situation for shipyards
Fincantieri remained “calm” in its press release regarding the order cancellation, but the cancellation of four Constellation-class frigates has already complicated the company’s situation. Earlier this year, Fincantieri CEO George Moutafis had just celebrated what he called a “revival of the American shipbuilding industry.”
Fincantieri expressed “calm” in its statement regarding the order cancellation, but the loss of four Constellation-class frigates has created a complex situation for the company. Earlier this year, Fincantieri CEO George Moutafis had just celebrated what he called “the revival of the American shipbuilding industry.”
Not only that, but between February and September 2025, Fincantieri’s U.S. operations added over 600 new employees, bringing the total number of skilled workers across its four American shipyards to more than 2,300. According to the company’s latest update, it currently employs approximately 3,750 highly skilled workers in the U.S., with 850 new hires recently.
Fincantieri, which was originally scheduled to design and build 10 Constellation-class frigates, has seen its U.S. business plummet due to the cancellation of the order. However, Fincantieri emphasizes that key terms (compensation) in the agreement with the U.S. Navy will ensure work continuity and workload transparency for its employees and the Wisconsin System of Yards (a key pillar of the U.S. maritime industrial base).
Currently, Fincantieri owns four shipyards in the United States—FMM, Green Bay, Sturgeon Bay, and Jacksonville—and has invested over $800 million in them over the past few years to achieve maximum productivity, flexibility and technological innovation.
Fincantieri’s U.S. shipyards build Constellation-class frigates and littoral combat ships, as well as various vessels for the U.S. Coast Guard, including icebreakers, buoy supply vessels, and emergency response vessels. Since its founding in Marinette, Wisconsin in 1942, the company has built over 1,500 ships.
Multiple U.S. Defense Shipbuilding Projects Terminated
It is worth noting that the U.S. Navy’s decision to cancel four Constellation-class frigates was not made on a whim. According to a May 2024 report by the U.S. Government Accountability Office (GAO), the Constellation-class frigate program suffers from fundamental flaws. The report stated that the Navy’s decision to initiate construction before completing the ship design “deviates from mainstream shipbuilding design practices.”
The U.S. Government Accountability Office warned that design delays have led to “escalating construction delays,” and proceeding with frigate construction without resolving these issues could “repeat the same mistakes.”
The Constellation-class frigate program reportedly faces challenges similar to those encountered by the U.S. Coast Guard’s Polar Security Class (PSC) icebreaker and Offshore Patrol Vessel (OPV) programs. The U.S. Government Accountability Office determined that both Coast Guard projects suffered from a fundamental flaw: construction commenced before designs were finalized.
According to the original plan, the U.S. Navy intended to procure at least 20 Constellation-class frigates. By fiscal year 2024, contracts for six vessels had been finalized. During the fiscal year 2025 budget cycle, the Navy requested $1.2 billion to construct the seventh ship in the series and planned to order an additional six vessels by 2029. However, during the fiscal year 2026 budget request period, the Navy did not include the Constellation-class frigate in its procurement plans, creating a gap in anticipated orders. At present, this order cancellation casts a shadow over future orders for the Constellation-class frigate.
The downsizing of the constellation-class frigate program highlights the broader challenges facing the U.S. Navy’s shipbuilding industry—as it seeks to expand its fleet, multiple defense shipbuilding projects are plagued by cost overruns and schedule delays. Congressional oversight focuses on risks including escalating costs and overall technical risks associated with the program. Previously, the U.S. Navy and Coast Guard have already terminated several shipbuilding initiatives.
In June this year, the U.S. Department of Homeland Security announced the cancellation of the 11th Legend-class patrol vessel under construction at Ingalls Shipbuilding. The vessel was ordered in December 2018 at a value of approximately $462 million.
In May 2021, the 11th vessel commenced construction at Ingalls Shipbuilding; by November, 15% of the build had been completed. However, the 11th vessel, originally scheduled for delivery in 2024, remained stalled after November 2021. After four years of construction without delivery, the order for this patrol vessel under construction was ultimately canceled.
Not long ago, the construction of four offshore patrol vessels being built by the Eastern Shipbuilding Group for the U.S. Coast Guard has also been suspended.
Earlier this year, the Eastern Shipbuilding Group notified the U.S. Coast Guard that continuing to fulfill the original contract for all four offshore patrol vessels would result in unbearable losses for the company. Consequently, the U.S. Coast Guard had previously suspended construction of the third and fourth offshore patrol vessels.
By July 2025, the U.S. Department of Homeland Security formally canceled orders for the third and fourth offshore patrol vessels from the Oriental Shipbuilding Group, stating outright that continuing construction of these vessels “would not be cost-effective for taxpayer funds.”
Months after announcing the cancellation of the order, the Eastern Shipbuilding Group declared a suspension of construction on two offshore patrol vessels (Ships 1 and 2) for the U.S. Coast Guard, citing “significant financial pressures stemming from the project’s structure and terms.”
The recent termination of multiple defense shipbuilding projects reveals a trend of downsizing across several U.S. naval programs. Despite America’s current vigorous promotion of revitalizing its shipbuilding industry, the reality is that U.S. shipyards and related industrial infrastructure have fallen significantly behind, rendering them fundamentally incapable of meeting the nation’s new ship requirements.
The recent termination of multiple defense shipbuilding projects reveals a trend of downsizing across several U.S. naval programs. Despite America’s current vigorous promotion of revitalizing its shipbuilding industry, the reality is that U.S. shipyards and related industrial infrastructure have fallen significantly behind, rendering them fundamentally incapable of meeting the nation’s new ship requirements.