In the face of China’s accelerated naval buildup the United States is looking to compete by reviving dormant naval shipyards, located in the U.S., with the help of its allies South Korea and Japan.
In late February U.S. Navy Secretary Carlos Del Toro toured “some of the world’s most technologically advanced and prolific shipyards” located in South Korea, and encouraged top executives from Hyundai Heavy Industries and Hanwha Ocean — which operate the shipyards in the region — to establish subsidiaries and “invest” resources in “integrating commercial and naval shipbuilding facilities in the U.S.,” according to a statement by the Navy.
According to the statement, after meeting with top executives from the companies, Del Toro said, “In each of these engagements, I brought to the table a simple, yet profound opportunity: invest in America.”
In recent years China has stepped up its investment in the shipbuilding industry. In 2023 China accounted for 50.2 percent of the world’s completed volume of ships, 66.6 percent of new orders, and 55 percent of backlogged orders, “pushing the nation’s market to a historic high,” the South China Morning Post (SCMP) reported.
Accompanying Del Toro on tours of South Korean shipyards was the U.S. Ambassador to Japan, Rahm Emanuel, who told Nikkei Asia that their visit served two purposes. The first was to inspect repair work being conducted on the fleet replenishment oiler, the USNS Big Horn, and to see if Japanese industry leaders were interested in investing in a closed U.S. shipyard.
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“There’s a closed plant in Philadelphia. There’s a closed Navy shipyard in Long Beach. And there are a couple of others,” Emanuel said. “We wanted to see if Mitsubishi and other Japanese companies would be interested in potentially investing and reopening one of those shipyards and being part of building Navy, commercial and Coast Guard ships.”
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US to use private Japanese shipyards
Emanuel is also advocating for the U.S. to utilize private Japanese shipyards “to conduct maintenance, repairs and overhauls of U.S. warships,” Nikkei Asia reported. “Initially it would involve ships deployed to Japan, but eventually could be expanded to ships ported in the U.S.,” he explained.
“It keeps ships in theater so that we don’t lose time on the travel back and forth from the United States when it comes to repair work. The repair work being done here would relieve pressure on American shipyards so they are building new ships,” Emanuel said.
However, current U.S. law prohibits U.S.-based ships from undergoing full-scale overhauls or repairs and maintenance at a shipyard outside the U.S. or Guam.
The law is in place to protect American jobs, and is unlikely to be changed during an election year.
Reviving dormant shipyards in the U.S. with international investment, though, would not require any change in legislation and could be faster to implement.
During his tours of shipyards in South Korea, Del Toro told business leaders, “There are numerous former shipyard sites around the [U.S.] which are largely intact and dormant. These are ripe for redevelopment as dual-use construction facilities for both warships, like Aegis destroyers, as well as high value chain commercial vessels, such as the ammonia gas carriers that will enable the global transition from fossil fuels to green energy sources like hydrogen.”
“Investment in dual-use shipyards in the United States will create good paying, blue collar and new-collar American jobs building the advanced ships that will protect and power the economy of tomorrow,” Del Toro argues.
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Talks to continue
Del Toro said that he will be hosting Korean CEOs at his office at the Pentagon over the coming weeks to continue to explore mutual opportunities.
Right now, U.S. Navy ships are built by seven private shipbuilders, two of which are non-American including Italy’s Fincantieri Marinette Marine in Wisconsin and Australia’s Austal USA in Alabama.
These two non-American industry partners serve as a precedent as South Korean and Japanese players consider entering into agreements with the United States.
America’s nuclear-powered aircraft carriers and submarines are maintained exclusively out of four naval shipyards located in Virginia, Maine, Washington, and Hawaii.
Previously, the U.S. had 13 public naval shipyards open, but currently only four of them are active.
Some of the closed shipyards have been repurposed as national parks, container terminals or naval air stations, but many are seen to have the potential to be revived for shipbuilding or maintenance.
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China’s rapid fleet expansion
At the core of the matter is ensuring that the U.S. can compete with China on the high seas.
“China is expected to expand its battle force of over 370 ships and submarines today to 400 by 2025 and 440 by 2030,” as reported by Nikkei Asia.
The U.S. Navy, by contrast, has just under 300 ships and submarines in service, though of much better quality and capability than the Chinese fleet, which consists mainly of smaller vessels.
Navy leadership is calling for the U.S. fleet to be expanded to upwards of around 380 vessels, but construction pace is lagging behind that of China and both private and public shipyards in the U.S. are struggling to hire enough workers.
Where America clearly leads is in the construction and operation of its nuclear-powered submarines, an area where the U.S. has a clear advantage over the Chinese People’s Liberation Army (PLA) Navy.
Currently, the U.S. is able to produce approximately 1.2 to 1.3 submarines a year, according to the Congressional Research Service.
In addition, producers of America’s Arleigh Burke class of guided-missile destroyers, Maine based Bath Iron Works and Ingalls Shipbuilding in Mississippi, have been delivering between 1.5 and two destroyers per year, just slightly below the desired output of two per year.
