Chris Kastner: Yeah. So attrition got better throughout the year. I don’t have the specific number here. We added about 5,000 heads, but it did trend better as we move through the year and it’s gotten better in January as well. It’s pretty — it’s what I call this a bit of stability showing up in the Shipbuilding organizations from not only a labor standpoint, but also supply chain and inflation. It’s not back to pre-pandemic levels, but it’s definitely stabilized and that’s what we need to execute.
Scott Deuschle: Thanks, guys. Appreciate it.
Chris Kastner: Sure.
Tom Stiehle: Thanks, Scott.
Operator: Thank you. Our next question comes from Pete Skibitski from Alembic Global. Please go ahead. Your line is now open.
Pete Skibitski: Hey. Good morning, guys.
Chris Kastner: Hi.
Pete Skibitski: Just going back to Kennedy, it’s a big contract for you guys at fixed price, and I was just wondering, my recollection was 2023, 2024, you guys are going to have some big risk milestones on that project. It sounds like that’s still going to happen. But is just the labor situation has kind of eaten up the upside on that potential risk retirement, is that the right way to think about it?
Chris Kastner: I wouldn’t necessarily say it’s eating up all the upside. I would say that we are very conservative in how we deal with the EAC and there’s a lot of really complex work in front of us. So I would not necessarily say it’s eating up all the upside.
Pete Skibitski: Okay. Okay. Just a follow-up to that, in Newport News, is VCS Block IV the bigger muscle mover margin wise? Is that kind of — is the Block IV kind of roll-off over the next two years? Does that just give you a lot more relief than anything else?
Chris Kastner: It will definitely give us a lot more confidence moving forward after we get those Block IV boats delivered and transition into Block V.
Pete Skibitski: Okay. And Chris, just on that, it’s — obviously, labor impacts all your programs, but Block IV had kind of the unusually aggressive schedule. Is that a combination why that’s been such kind of a door on your side, is that fair?
Chris Kastner: Well, remember, Block IV was impacted the most by COVID, right? We had a pretty material impact back in 2020, which really reduced our profit expectations on those boats. So we just need to get through them. We need to get them delivered. The program schedules are pretty stable right now and a lot of cooperation between electric boat Newport News and really senior Navy to get through those program schedules. So we just need to get through them and then we will transition into Block V.
Tom Stiehle: Chris, if I could hop on that too. Pete, so on that, to your question of IV or V, yeah, Block IV has been with COVID in 2021, 2022. So it’s long run rate, those contracts have had in the EACs with some additional costs. I think it’s two-fold. One, getting those Block IV boats done alleviates the mix in the portfolio at Newport News, so there’s a list that you talked about there. But then also it’s just — those boats give us time to come down the learning curve, the lessons learned, the metrics and the operating system and the pressure on that we have on boat there. It truly is a production line of all programs you have, it’s the most serial production line with the modules go and then the boats are there, some will go from unit-to-unit with the same personnel.
