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Navy Secretary John Phelan was removed from his post after months of tensions with senior Pentagon leadership, according to multiple sources familiar with the matter.
Multiple officials told Fox News Digital both War Secretary Pete Hegseth and Deputy Defense Secretary Stephen Feinberg had concerns with Phelan’s leadership, and tensions had simmered for months. One flashpoint came after Hegseth fired Phelan’s chief of staff, John Harrison, in October 2025, according to sources.
Those frustrations were in part fueled by concerns over Phelan’s execution of major shipbuilding programs, one source confirmed.
But President Donald Trump struck a different tone publicly, praising Phelan in a post on Truth Social Thursday afternoon.
NAVY SECRETARY DEPARTS IMMEDIATELY AS UNDERSECRETARY TAKES OVER IN ACTING ROLE
“John Phelan is a long time friend, and very successful businessman, who did an outstanding job serving as my Secretary Of The Navy for the last year,” Trump wrote. “John helped my Administration rebuild Sleepy Joe Biden’s rapidly depleted, and almost abandoned, Navy. Now, because of John, and all of the Great Men and Women lovingly and tirelessly involved, we have the strongest Navy in the World — BY FAR!”
Trump added that he would “certainly like to have him back within the Trump Administration sometime in the future” and said Phelan “decided to move on,” a characterization at odds with what other administration officials have told Fox News Digital.
A senior administration official said Trump and Hegseth “agreed new leadership at the Navy is needed.”
The official added that Hegseth informed Phelan of the decision before Pentagon chief spokesperson Sean Parnell announced the move in a post on X Wednesday.
The leadership shakeup comes at a critical moment for the Navy, as U.S. forces confront escalating tensions amid a blockade in the Strait of Hormuz, where Iranian attacks and mine threats have disrupted a vital global oil choke point. It also comes as Trump has pushed the Navy into “wartime footing” for expanding the nation’s lagging shipbuilding capacity.
Phelan, a billionaire and former fundraiser for Trump, and his wife, Amy, hosted a bridal shower for Donald Trump Jr’s fiancée at Mar-a-Lago in mid-April.
Other Navy insiders described the tensions as more personal, saying Hegseth grew frustrated that Phelan at times bypassed him and took issues directly to Trump.
Phelan declined to comment to Fox News Digital. Hegseth aides could not be reached for comment on the tensions.
Phelan is the second senior level Pentagon official to lose his job in April after Army chief of staff Randy George during the U.S. operation against Iran. His exit also comes amid a broader Cabinet shakeup: Homeland Security Sec. Kristi Noem, Attorney General Pam Bondi and Labor Secretary Lori Chavez-Deremer have all departed their roles since March.
Phelan’s departure also comes amid heightened pressure on the Navy to address persistent shipbuilding challenges. The Navy’s Columbia-class submarine program — its top priority — remains behind schedule and over budget, with delivery of the lead vessel now expected to be delayed by roughly 17 months into 2029.
More broadly, major Navy shipbuilding programs have continued to face delays and cost pressures during Phelan’s roughly yearlong tenure, even as he made shipbuilding a central focus of his leadership. He launched reviews of major programs and pushed changes aimed at accelerating production, while the Navy has invested heavily in efforts to address workforce shortages and production bottlenecks, including a $900 million initiative in 2026 to automate submarine manufacturing.
Tensions escalated as Feinberg moved to centralize oversight of major shipbuilding programs, in some cases stripping Phelan of authority over key efforts, according to New York Times reporting citing a congressional official.
Phelan also drew scrutiny in recent days after suggesting the Navy could explore alternatives, such as outsourcing shipbuilding as it grapples with capacity constraints.
“Everything’s on the table,” Phelan said at the Sea-Air-Space conference Monday. “We just need to look at it, understand it, understand the implications behind it and decide if we think that makes sense or not.”
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Hung Cao, the Navy’s under secretary, has stepped in as acting Navy secretary after Phelan’s removal, bringing a sharply different background and leadership profile to the role. Unlike Phelan, a businessman, Cao is a retired Navy captain and special operations officer who served more than two decades in the military, including deployments to Iraq and Afghanistan, before entering politics and later joining the Pentagon’s civilian leadership.
Cao has also emerged as a prominent voice within the Trump administration on military culture and readiness, taking a hardline stance on recruiting and force standards.
In a political debate while he was running for the Virginia Senate seat in October 2024, Cao said, “When you’re using a drag queen … to recruit for the Navy, that’s not the people we need. What we need is alpha males and alpha females who are going to rip out their own guts, eat them and ask for seconds.”
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