Navy Secretary ousted after infighting with top Pentagon leaders

Courtney McBride, Roxana Tiron and Josh Wingrove, Bloomberg News on Apr 22, 2026

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WASHINGTON — Navy Secretary John Phelan was fired after clashing with top leaders at the Pentagon, including over administration efforts to revive U.S. shipbuilding, according to people familiar with the matter, making him the latest high-profile Pentagon departure amid the war in Iran.

Phelan was pushed out after butting heads with Defense Secretary Pete Hegseth and Deputy Defense Secretary Stephen Feinberg over President Donald Trump’s focus on what the administration has dubbed a new U.S. “Golden Fleet,” according to the people, who asked not to be identified discussing private conversations. A White House official said Trump and Hegseth agreed new leadership was needed over the Navy.

Pentagon spokesman Sean Parnell said in a post on X that Phelan was stepping down “effective immediately” without giving a reason for his departure. Parnell said Undersecretary Hung Cao would be the replacement for now.

Phelan didn’t respond to requests for comment Wednesday evening.

Phelan is only the latest high-level departure from the Pentagon since the Iran war began. Earlier this month, Hegseth asked Army Chief of Staff General Randy George to step down. The abrupt dismissal comes as the Navy is helping oversee a blockade of the Strait of Hormuz, one of its biggest operations in decades.

However, Phelan, as the service’s civilian leader, didn’t have direct oversight over the Navy’s operations near the Strait of Hormuz and his departure isn’t expected to affect operations.

Reviving U.S. shipbuilding has been one of the Trump administration’s top defense-related priorities. Phelan was on hand at Trump’s Mar-a-Lago estate in December as the president unveiled his new Trump-class battleship and praised his Navy secretary as “one of the most successful businessmen in the country.”

“He’s taking probably the largest salary cut in history,” Trump said of Phelan, a donor to his campaign and former money manager.

Phelan co-founded MSD Capital more than two decades ago to manage the family fortune of computer maker Michael Dell. Phelan later founded Rugger Management, a private investment firm based in Palm Beach, Florida.

Born in South Vietnam, Cao came to the U.S. in 1975 after the fall of the country. He graduated from the Naval Academy. After leaving the military, Cao became a vice president at CACI International, an information technology company and government contractor. He ran an unsuccessful campaign for U.S. Senate in Virginia in 2024.

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(With assistance from John Harney, Jennifer A. Dlouhy, Jen Judson and Jamie Tarabay.)

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