Navy Secretary Is Out

Navy Secretary John Phelan is leaving the service's top civilian post immediately, the Pentagon announced Wednesday, a surprise departure that comes just over a year into his tenure.

Undersecretary Hung Cao, the service's second ranking civilian, will take over on an acting basis.

"On behalf of the Secretary of War and Deputy Secretary of War, we are grateful to Secretary Phelan for his service to the Department and the United States Navy," chief Pentagon spokesperson Sean Parnell said in a statement. "We wish him well in his future endeavors."

Phelan, a wealthy financier, was one of several businessmen tapped for top Pentagon posts by President Donald Trump, alongside Deputy Secretary Stephen Feinberg. He came aboard a service plagued by problems in shipbuilding with promises to shake up the process. He oversaw the cancellation of the troubled Constellation-class frigate, along with the announcement of a new class of battleship named for Trump.

But Phelan struggled to get the Navy to increase shipbuilding numbers, one of Trump’s top priorities and had seen some of his key responsibilities stripped away in recent months, according to two people familiar with the matter. They also said Feinberg had recently taken over management of submarine programs and the Office of Management and Budget was running shipbuilding.

The people, like others interviewed, were granted anonymity to discuss internal dynamics.

The ouster of Phelan comes a week before Hegseth is set to testify on the Pentagon’s proposed $1.5 trillion budget, which would involve significant boosts to key Navy programs. This includes Trump’s proposed “Golden Fleet,” a new class of battleships.

Phelan had spoken at the Sea, Air, Space conference on Tuesday and was seen on Capitol Hill on Wednesday.

He could not immediately be reached for comment.

Phelan had also lost key staff in recent months. Defense Secretary Pete Hegseth in October fired Jon Harrison, Phelan’s unusually powerful chief of staff who had sought sweeping changes to the Navy’s policy and budgeting offices. He had also attempted to curb the role of the undersecretary before Cao was confirmed to the post.

Another person familiar with Phelan’s management of the Navy described him as “out of touch” with the service, who had frustrated both Feinberg and Hegseth and had been left with “low-level people” as advisers.

The sudden departure is the latest in a series of senior resignations and firings across the Trump administration, including Homeland Security Secretary Kristi Noem and Attorney General Pam Bondi.

Daniel Lippman and Paul McLeary contributed to this report.