U.S. Courts an Ally at Massive Shipyard --- South Korea offers shipbuilding capacity, know-how and talent that rival China's

 

"ULSAN, South Korea -- Just a few months ago, U.S. Navy Secretary Carlos Del Toro admired a new South Korean warship built in this port city at the world's largest shipyard. Del Toro was on a trip hoping to sell top officials at HD Hyundai Heavy Industries and others on a simple pitch.

"Invest in America," Del Toro told them.

Having fallen far behind China in shipbuilding, the U.S. is turning to allies in South Korea and Japan for the turnaround strategy. Key to that effort is attracting companies such as Hyundai that go head-to-head with the Chinese and can do everything America lacks: making ships quickly at low costs with modern techniques.

China's naval battle-force ship fleet now outnumbers the U.S.'s, Beijing having ramped up production at state-subsidized shipyards. Most of the world's ship output last year came from China. Coming in at No. 2 was South Korea, with roughly a quarter of global deliveries.

The U.S. barely registers on the rankings. The few American shipyards left build American ships -- and pretty much nothing else, since the labor costs are higher and the turnaround times longer. 

That is where South Korea's shipbuilding giants can step in to help.

No single global shipyard matches the production capacity of Hyundai's facility in Ulsan, where hulking "Goliath" cranes tower into the skies. Bright blue, yellow and red ship parts lie strewn on the ground like megasize toy blocks.

On a recent morning, thousands of Hyundai employees worked on 20 ocean ships under construction -- roughly four times the U.S. output all last year -- for the Korean navy, the Philippine military and global freight companies. Lee Sang-bong, a Hyundai executive, stood aboard the same South Korean warship that he and other colleagues showed Del Toro in February.

Named Jeongjo the Great after an 18th-century Korean king, the vessel is an Aegis destroyer with lots of American technology and parts, explained Lee. Lockheed Martin developed the combat system, RTX's Raytheon supplied the missiles and General Electric manufactured the gas turbine. "This is basically a U.S. warship," he said.

Except for the cost and time. Making Jeongjo in the U.S. would more than double the price tag, and construction would take roughly one-third longer, industry officials say.

But making a U.S. destroyer in Ulsan isn't an option for now: American ships, by law, must be built at home.

The U.S. law, however, doesn't block partnerships with foreign shipbuilders for tasks such as maintenance, training or technical tips -- and Washington is increasingly turning to Korea and Japan for such work.

Del Toro also swung by another South Korean shipyard run by Hanwha Ocean as well as Mitsubishi Heavy Industries' repair dockyard in Yokohama, Japan.

China, South Korea and Japan churn out ships that account for more than 90% of the world's tonnage, according to a U.S. congressional report from November. The U.S. builds just 0.2%.

Naval dominance is a chief Washington concern for a potential clash with Beijing around Taiwan. The U.S., as it stands now, is unprepared to quickly rev up production of warships or merchant vessels critical to maintaining trade during any conflict around the South China Sea.

In April, a U.S. congressional guidance report highlighted expanding relationships with treaty allies as a major recommendation. China, whose shipbuilding workforce is roughly four times the U.S.'s, had around 7,000 oceangoing vessels, according to the report. America has about 200. China received about 1,700 ship orders in 2023; the U.S., five.

"The gap in shipbuilding and shipbuilding capacity with China is probably too large at this point to close," said Bryan Clark, a retired U.S. Navy official.

The priority should be strengthening U.S. shipbuilding, with allied help, so that Beijing can't use its maritime advantage as a coercive tool, said Clark, who is now a senior fellow at the Hudson Institute, a research organization based in Washington, D.C.

Some collaboration between the U.S. and South Korea is already under way. Both Hyundai and Hanwha recently received approval for the first time to do maintenance, repair and operations work for certain U.S. Navy vessels." [1]

1. World News: U.S. Courts an Ally at Massive Shipyard --- South Korea offers shipbuilding capacity, know-how and talent that rival China's. Martin, Timothy W.  Wall Street Journal, Eastern edition; New York, N.Y.. 24 Sep 2024: A.7.