Hanwha Group Expands Shipbuilding in Philadelphia

South Korea’s Hanwha Group is making significant strides in the U.S. shipbuilding industry. The company recently completed a $100 million acquisition of the former U.S. Navy facilities, now known as Hanwha Philly Shipyard. This purchase marks a pivotal moment for the shipyard, which has faced challenges in recent years. Hanwha plans to hire a substantial number of workers to support its expansion efforts. The company aims to push the boundaries of shipbuilding, catering to both commercial and government clients. With a focus on naval vessel production, Hanwha is poised to revitalize Philadelphia’s shipbuilding sector.

Leadership and Vision for Growth

David Kim, an executive from Hanwha Defense USA, has been appointed as the chief executive of Hanwha Philly Shipyard. Kim expressed optimism about the company’s future, stating, “We plan to grow by pushing the boundaries of shipbuilding.” Under Aker, the previous owner, the shipyard primarily focused on building civilian ships. However, Hanwha’s Systems and Ocean divisions bring extensive experience in constructing naval vessels, drones, and advanced radar systems. This expertise positions Hanwha to expand its operations into naval vessel production, a move that Kim believes will enhance the shipyard’s capabilities.

Hanwha has committed to ensuring a smooth transition and aims for sustainable and inclusive growth. The acquisition received approval from the Committee on Foreign Investment in the U.S. (CIFUS) in September, signaling a positive reception from regulatory bodies. The company is optimistic about entering the U.S. market and sees this as a historic opportunity to modernize Philadelphia’s shipbuilding industry. David Oh, a former Philadelphia City Council member, highlighted the potential for Hanwha to develop Navy surface and underwater vessels, particularly as the Navy explores unmanned craft of various sizes.

South Korean titans close $100 million US Shipyard acquisition

Challenges and Opportunities Ahead

Despite the promising outlook, Hanwha faces challenges in revitalizing the Philadelphia shipyard. Concerns about foreign investment in strategic U.S. industries have been raised in Washington. However, Navy Secretary Carlos Del Toro has encouraged companies from U.S. allies like South Korea and Japan to invest in American military facilities. This shift comes as U.S. investors have largely steered clear of heavy industry, favoring sectors with quicker returns, such as biotech and digital ventures.

In recent years, the Philadelphia Shipyard has struggled with profitability, even with new contracts in place. The yard has seen a resurgence, employing around 1,700 workers, nearly matching its workforce from when the Navy closed its shipyard in 1996. However, to achieve profitability, the shipyard must expand its capabilities, including ship maintenance and construction. This expansion will require training more workers, as the decline of shipbuilding in the Delaware River region has left a skills gap. Currently, about two-thirds of the workforce consists of contract employees, many of whom are veterans from other shipyards. Unions at the yard are actively recruiting apprentices to fill this gap.

As Hanwha Group embarks on this ambitious journey, the future of the Philadelphia shipyard looks promising. With a commitment to innovation and growth, the company aims to reclaim its place in the U.S. shipbuilding landscape.