US Navy secretary confirms possibility of US warship construction during visits

During a recent visit to South Korea, US Navy Secretary John Phelan engaged in discussions aimed at enhancing cooperation in shipbuilding between the United States and South Korea. His itinerary included tours of shipyards operated by HD Hyundai and Hanwha Ocean, where he explored opportunities for joint maintenance, repair, and operations (MRO) of naval vessels. Phelan also highlighted the need for South Korean investment in US shipyards, which are facing significant challenges.

Strengthening Naval Cooperation

Secretary Phelan’s visit on April 30 included significant meetings with key figures from HD Hyundai and Hanwha Ocean. In Ulsan, he was accompanied by HD Hyundai Executive Vice Chairman Chung Ki-sun, while in Geoje, he met with Hanwha Group Vice Chairman Kim Dong-kwan. The discussions centered on the potential for enhanced MRO collaboration, particularly as the US Navy grapples with maintaining its fleet amid declining shipbuilding capacity.

Despite a substantial investment of approximately 10 trillion won (around $7 billion) in MRO for military vessels, the US Navy has faced difficulties in effectively repairing and maintaining its warships. To address this issue, the Navy has utilized legal exemptions that permit overseas shipyards to conduct maintenance on US vessels. Last year, Hanwha Ocean secured two MRO contracts from the US Seventh Fleet, including work on an auxiliary ship and a replenishment vessel, the latter of which was successfully delivered in March 2023.

Additionally, the Seventh Fleet awarded HD Hyundai an MRO contract for another replenishment vessel earlier this year. Notably, the Seventh Fleet operates from Yokosuka, Japan, rather than the United States, underscoring the strategic importance of these partnerships.

Future Prospects for Shipbuilding

During his visit, Phelan also examined the possibility of contracting South Korean firms for the construction of new naval vessels. Current US legislation restricts military shipbuilding to domestic yards, but exceptions can be made with presidential approval. Phelan toured HD Hyundai’s specialized vessel yard, where advanced Aegis-class destroyers are manufactured, emphasizing the capabilities of South Korean shipbuilders.

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Hanwha Ocean has already established a presence in the US market by acquiring the Philly Shipyard last year, which allows the company to build and repair ships on American soil. Phelan acknowledged the significance of Hanwha’s US facilities and encouraged further investment in domestic shipyards during his discussions.

In a press release, the US Navy reiterated the importance of shipbuilding cooperation, stating, “Secretary Phelan further discussed shipbuilding as a top priority with a recognition of Korean shipyards, HD Hyundai and Hanwha, as industry experts, and encouraged additional investment in US domestic shipyard[s].” However, South Korean shipbuilding firms remain cautious as they evaluate the costs and risks associated with investing in US shipyards.

As these discussions unfold, the potential for strengthened ties between the US and South Korea in naval capabilities appears promising, paving the way for future collaborations in shipbuilding and maintenance.