U.S. shipyard capacity constraints drive formal outreach to allied yards
The Navy’s formal information requests represent an early market-research procedure that allows the U.S. government to assess potential suppliers, technical capabilities, prices and delivery schedules before deciding whether to proceed with a procurement program, according to the report. The inquiries are not a formal order or bidding process.
The outreach reflects growing concern about delays, workforce shortages and limited production capacity within the U.S. shipbuilding industry, the report said. The U.S. Government Accountability Office has repeatedly reported that Navy shipbuilding programs are running years behind schedule and billions of dollars over budget.
HD Hyundai Heavy Industries and Hanwha Ocean have experience designing and constructing some of the South Korean Navy’s most advanced surface combatants, the report said. South Korea’s Sejong the Great-class and Jeongjo the Great-class destroyers use the U.S.-developed Aegis combat system, which is also installed aboard the U.S. Navy’s Arleigh Burke-class destroyers. South Korea’s latest Aegis destroyers displace more than 8,000 tons and incorporate advanced radar, missile defense and stealth-related technologies.
Hanwha Ocean has established a direct foothold in the United States through its acquisition of Philly Shipyard in Pennsylvania, the report said. The company has announced plans to expand the yard’s capacity and introduce South Korean production technology. The company has also completed maintenance work on U.S. Military Sealift Command support ships at its Geoje shipyard in South Korea.
The development comes as South Korea and the United States expand cooperation under MASGA, short for Make American Shipbuilding Great Again, a bilateral initiative intended to revitalize U.S. shipbuilding through investment, workforce development, technology cooperation and naval vessel maintenance. The two governments signed a memorandum in May establishing the bilateral partnership and plans for a Korea-U.S. Shipbuilding Partnership Center in Washington.
U.S. officials have increasingly acknowledged South Korea’s mass-production capabilities. U.S. Army Secretary Daniel Driscoll praised South Korean defense manufacturing during a congressional hearing in April, citing Hanwha as an example of an effective industrial production model, according to the report.
Legal and political barriers remain. Congress would have to address laws that restrict foreign construction of naval vessels. U.S. labor unions and domestic shipbuilders could also resist proposals they believe would transfer American jobs or defense production overseas, the report said.
A possible compromise could involve South Korean companies investing in U.S. yards, supplying ship components or jointly constructing vessels in both countries rather than building complete American warships in South Korea, the report said. South Korean shipbuilders could also provide designs and production management systems while final assembly takes place at an American facility.
Industry specialists cited in the report said the South Korean government will need a coordinated strategy involving the presidential office, defense and industry ministries and diplomatic officials if Korean companies are to secure a meaningful role. They said technical competitiveness alone may not be sufficient because major defense contracts are also shaped by alliance politics, domestic employment considerations and long-term security relationships.
South Korean companies recently faced difficulties in European and Canadian defense competitions despite offering competitive prices, technology and local production plans, the report said. The Navy’s decision to formally examine South Korean capabilities indicates that cooperation once considered politically difficult is now under active consideration.