By Heejin Kim
Copyright reuters
SummaryCompaniesTalking to multiple companies on possible buying US shipyard, executive saysCompany targets $2.2 billion in annual revenue from warship sales to US Navy by 2035Sees lack of skilled labour, visa issues in the US as challenges
ULSAN, South Korea, Sept 18 (Reuters) – South Korea’s HD Hyundai Heavy Industries is in talks with multiple companies about buying a U.S. shipyard, a senior company executive said, seeking to tap into President Donald Trump’s push to revive America’s ailing shipbuilding industry.
The world’s largest shipbuilder based on orders is targeting 3 trillion won ($2.2 billion) in annual revenue by 2035 from building warships for the U.S. Navy, said Woo-maan Jeong, head of planning and management for HD Hyundai’s (329180.KS), opens new tab naval and special ship unit, in an interview at its Ulsan headquarters.
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“It seems to be clear that we need to build a manufacturing base in the U.S. sometime in the future,” Jeong said on Wednesday, declining to name any companies involved in the talks or to give the scale of any potential investment.
“The U.S. is apparently facing a situation that pushes it to inevitably open the shipbuilding market,” said Jeong, given the widening gap in naval capabilities between the United States and China and the lack of sufficient U.S. capacity for building warships.
The U.S. “will have to utilise the infrastructure and capacities built already by its allies to overcome a short-term ship shortage.”
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U.S. shipyards, which had the world’s highest production capacity during World War Two, had a global market share of just 0.04% in 2024, according to U.N. Trade and Development data.
China and South Korea are now responsible for 83% of global commercial shipbuilding, the data also shows.
Shipbuilders still operating in the U.S. include Philly Shipyard, bought in 2024 by Korean shipbuilder Hanwha Ocean (042660.KS), opens new tab, and a full-service shipyard, opens new tab run by General Dynamics (GD.N), opens new tab on the West Coast. Huntington Ingalls Industries (HII.N), opens new tab is also building, opens new tab ships as a large supplier for U.S. Navy.
South Korea pledged in July to invest $150 billion in U.S. shipbuilding, as part of $350 billion in investment funds that Seoul agreed to put into U.S. projects as part of negotiations over lower tariffs.
In late August, HD Hyundai also announced a merger with affiliate HD Hyundai Mipo (010620.KS), opens new tab to utilise Mipo’s yards to expand its warship business and help lead U.S.-Korea shipbuilding projects.
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Jeong said challenges to building ships in the United States include a shortage of skilled workers.
“Another issue is retention. Many U.S. shipyard workers quit within a year,” he said.
It could take between three and five years for Hyundai to train U.S. workers to boost productivity, Jeong said, citing the company’s experience in setting up a shipyard in Peru.
Another obstacle could be U.S. immigration policy, he said, as he called for better visa policies for Korean trainers, after the recent arrest of hundreds of Korean workers at Hyundai Motor’s (005380.KS), opens new tab battery plant in the state of Georgia.
US LAWS RESTRICT FOREIGN SHIPBUILDERS
HD Hyundai Heavy christened on Wednesday in its Ulsan yard an 8,200-metric ton, Aegis-equipped destroyer to be delivered to the South Korean Navy by end-2026.
The company touted the ship, built in just 18 months, as a “symbol of U.S.-Korea cooperation” since its combat system uses technology supplied by U.S. companies such as Lockheed Martin (LMT.N), opens new tab.
The company can build such warships in less than two-thirds of the time required by U.S. peers, Jeong said.
U.S. laws restricting foreign firms from building ships are among the other challenges.
The U.S. Merchant Marine Act of 1920, better known as the Jones Act, opens new tab, restricts domestic shipping to vessels that are U.S.-built and U.S.-flagged, while the Byrnes-Tollefson Amendment prohibits, opens new tab foreign shipyards from constructing naval vessels.
Jeong said the U.S. Congress is considering amendments to those acts to help foreign companies build ships for the U.S., although it’s unlikely the century-old laws would be scrapped entirely.
Still, despite the challenges, there is no other market for warships as attractive as the U.S., he said.
But, “the undeniable reality is that if you want to do business with the U.S., you need to do it in the U.S.,” Jeong said.
Reporting by Heejin Kim; Editing by Ed Davies and Tom Hogue
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