The US on Wednesday (local time) announced that Secretary of the Navy John Phelan was leaving his position, shortly after it was reported that the 62-year-old had been fired, CNN reported.
Phelan’s leaving comes amid tensions with Defence Secretary over his implementation of shipbuilding reform and his close relationship with US President . While the Trump administration has not clearly stated the reason for his leaving, it comes at a time when the US Navy is enforcing a blockade of Iranian ports and targeting vessels linked to the Islamic Republic during a shaky ceasefire that was recently extended.
Who is John Phelan?
Unlike many others in similar positions, Phelan did not have prior military service or senior defence leadership experience when he was appointed in late 2024.
According to SMU, he is the co-founder and chairman of Rugger Management LLC, a private investment firm based in Palm Beach, Florida. Before launching Rugger, he co-founded MSD Capital in 1998, a private investment firm for Michael Dell, the founder and CEO of .
He also co-founded MSD Partners, an SEC-registered investment advisor, established to enable a select group of outside investors to invest in strategies developed by MSD. Additionally, he is the chairman emeritus of MSD. Before MSD, he served as a principal for seven years at ESL Partners, a Greenwich, Connecticut-based investment firm. Here, Phelan was responsible for the company’s Special Situation and Distressed Investments and helped grow the firm from $50 million in assets under management to over $2 billion.
Before ESL, he served as a vice president at the Equity Group and was in charge of acquisitions (Western region) for the Zell-Merrill Lynch Real Estate Opportunity Funds. Phelan began his career at Goldman Sachs & Co., where he worked as a financial analyst in the Investment Banking Division.
According to SMU, he earned an MBA from Harvard Business School. He graduated Phi Beta Kappa and cum laude with distinction from SMU with a bachelor’s degree in economics and political science. He also holds a general course degree with an emphasis in economics and international relations from the London School of Economics.
Phelan is on the Board of Trustees at the Whitney Museum of American Art and the Aspen Art Museum (chairman), and on the Board of Directors at Spirit of America and Third Option Foundation.
Why was Phelan fired?
CNN, citing sources, reported that tensions had been simmering between Phelan and Hegseth for months. The latter believed that the Navy Secretary was moving too slowly on implementing shipbuilding reforms. Additionally, the Defence Secretary was irked by Phelan’s direct communication with Trump, which he viewed as an attempt to bypass him.
A meeting was held between the and Hegseth on Wednesday over shipbuilding, where the issues came to a head. The US President reportedly grew frustrated with the slow pace of shipbuilding himself and became convinced he needed to be replaced. Officials told CNN that Trump and Hegseth resolved to install someone who would move more quickly, and Trump told the Defence Secretary to “take care of it”. Hegseth then sent a message to Phelan informing him to either resign or be fired.
Pentagon’s statement on Phelan’s leaving
Pentagon spokesperson Sean Parnell on Wednesday announced Phelan’s leaving his post “effective immediately”. In a post on X, he wrote, “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.”
Phelan’s departure is the first among the military service secretaries nominated under Trump. Hegseth, however, has removed numerous senior military officers across the services since taking the helm at the Pentagon.
