John Phelan, who is nominated to be the next Navy secretary, testifies Thursday, Feb. 27, 2025, during his confirmation hearing with the Senate Armed Services Committee. (Eric Kayne/Stars and Stripes)
WASHINGTON — John Phelan, a businessman with no military experience, said Thursday that he would use his background in the private sector to “step outside the status quo” if he is confirmed as the next secretary of the Navy.
Phelan, 61, told the Senate Armed Services Committee that he understood why some might question why a businessman who never wore a military uniform would want to lead the Navy and he respected those concerns.
But he said he wanted to apply his management and leadership experience in investment firms to solve systemic failures that had long plagued the Navy and Marine Corps.
“The Navy and the Marine Corps already possess extraordinary operational expertise within their ranks,” he said during his confirmation hearing. “My role is to utilize that expertise and strengthen it, to step outside the status quo, to take decisive action with a results-oriented approach.”
If confirmed, Phelan would be the first person in more than 15 years to lead the Navy without having served in any branch of the military. The most recent Navy secretary, Carlos Del Toro, was a retired Navy officer who served for more than 20 years.
Phelan is the founder of several investment firms and serves on the board of Spirit of America, a nonprofit that works with troops and diplomats. He was also a major donor to the 2024 re-election campaign of President Donald Trump, who said Phelan would “put the business of the U.S. Navy above all else.”
Phelan said he intended to focus his efforts as Navy secretary on shipbuilding, recruiting and passing a department-wide audit. The position is responsible for overseeing more than 900,000 people and an annual budget of more than $200 billion.
Sens. Gary Peters, D-Mich., left, Mark Kelly, D-Ariz., and Rick Scott, R-Fla., chat with John Phelan, who is nominated to be the next Navy secretary, on Thursday, Feb. 27, 2025, prior to Phelan’s confirmation hearing with the Senate Armed Services Committee. (Eric Kayne/Stars and Stripes)
Senators on Thursday focused much of their questioning on the Navy’s troubled shipbuilding programs, nearly all of which have been wracked by delays for years and are consistently over budget.
Phelan said he believed the Navy was not acting urgently enough to address the issue and appeared to suffer from a culture of complacency.
China, considered America’s top military competitor, is rapidly growing its fleet and is on pace to surpass 400 ships this year. The U.S. Navy was supposed to have a fleet of 315 ships by 2025 but only has 287.
“It’s almost as if we’re waiting for a crisis to happen to ignite things and I think in the business of warfare, that’s a dangerous place to be,” Phelan said. “I would bring a sense of urgency to this. I would bring a sense of accountability to this.”
Phelan said he could not comment on the Pentagon’s plans to drastically reduce its civilian workforce, potentially by more than 70,000 people, but committed to sitting down with Defense Secretary Pete Hegseth to ensure shipyards would not be negatively impacted.
When pressed by several Democratic senators about the planned firings, Phelan said he did not know enough about them to say if he supported the cuts or not.
He expressed interest in growing the Navy’s enlisted ranks, however, and said he would use the service’s 250th anniversary this year to showcase the benefits of service.
The Navy is on track to meet its recruiting goals for a second straight year but has also loosened requirements, accepting recruits with lower test scores and those who did not have high school diplomas or a GED diploma or certificate.
Phelan said it was “critical” to have high standards. He said he wanted to learn from the Marine Corps, which has not struggled with recruiting like the Navy and has built a recognizable brand by working with the same advertising agency for 30 years.
“The Marines put some of their best leadership in the recruiting role and that’s one of the reasons why they do so well with it,” he said. “So I’m going to try to adapt some of the best practices we get from other services and from my business experience in how to attract and retain talent.”
Sen. Roger Wicker of Mississippi, the Republican chairman of the committee, said Phelan’s nontraditional background was sorely needed in the Navy.
“I’m pleased with the nominee’s track record,” Wicker said. “He has rescued companies in distress. Our Navy is certainly in distress and we need that same kind of leadership.”
John Phelan, right, who is nominated to be the next Navy secretary, greets Sen. Joni Ernst, R-Iowa., on Thursday, Feb. 27, 2025, before his confirmation hearing with the Senate Armed Services Committee in Washington. (Eric Kayne/Stars and Stripes)
