Hanwha Philly Shipyard Secures Navy Oiler Contract
Hanwha Philly Shipyard has entered into a significant contract with the U.S. Navy, collaborating with Vard Marine US Inc. to design and construct Light Replenishment Oilers. This marks Hanwha’s first Navy subcontract since acquiring the shipyard nearly two years ago. The government has allocated $4.5 million for the initial design and planning phases, as the Navy embarks on an ambitious plan to modernize its fleet.
Strategic Partnership and Future Prospects
Under the new contract, Hanwha Philly Shipyard will partner with Vard Marine US Inc., an Italian-owned barge manufacturer, to develop plans for the construction of oiler ships. This collaboration is a pivotal moment for Hanwha, which has been expanding its operations since purchasing the shipyard from Aker in 2024. The shipyard, located on a site that once housed a Navy facility, has seen its workforce grow from approximately 1,700 to 2,100 employees, reflecting the company’s commitment to revitalizing shipbuilding in Philadelphia.
The Navy’s investment of $4.5 million will support the development of design, construction, and cost plans for the new oilers, which are essential for refueling Navy vessels and supporting Marine operations. Hanwha officials express optimism about securing additional contracts, aiming to leverage their shipbuilding expertise to meet the Navy’s needs. In a related move, the Navy has also awarded $3.9 million to General Dynamics for a competing proposal at its NASSCO shipyard in San Diego, which is already engaged in building larger oilers.
Hanwha’s strategy includes a significant investment of $5 billion to enhance production capabilities at the Philadelphia facility. The company plans to increase output from one ship every eight months to 20 ships annually, aiming to achieve profitability and compete effectively against established shipyards in East Asia. The new oilers will utilize commercially available technologies, a strategy endorsed by military planners to control costs while ensuring operational effectiveness.
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Job Growth and Workforce Development
Philadelphia Mayor Cherelle L. Parker has highlighted the shipyard as a key area for job growth in the city. Hanwha, alongside neighboring shipbuilding companies like Rhoads Industries, is actively hiring skilled workers, particularly welders, in anticipation of doubling their workforce in the coming years. The average wage for union workers at Hanwha is reported to be $34 per hour, with overtime opportunities pushing annual earnings above $100,000 for top positions.
Despite initial concerns about labor shortages, Hanwha has received a surge of applications, aided by government-supported training programs at local community colleges. Initiatives like the Welcoming Center’s Global Skills Union Pathways Project have successfully prepared candidates for apprenticeship programs in welding and machine operation. Newcomers to the industry, such as Abdourahmane Diallo from Guinea and Yacine Bouaziz from Algeria, have expressed enthusiasm about the safety standards and career opportunities at Hanwha, underscoring the shipyard’s commitment to fostering a skilled workforce.
As Hanwha Philly Shipyard continues to expand its capabilities and workforce, the company is poised to play a crucial role in the U.S. Navy’s modernization efforts, contributing to both national defense and local economic growth.
