In South Korea, Del Toro courts major shipbuilders to set up shop in US

WASHINGTON — During a recent trip to South Korea, Navy Secretary Carlos Del Toro pitched two of the country’s major shipbuilders to potentially set up shop stateside, according to statement from Del Toro’s office.

“In each of these engagements, I brought to the table a simple, yet profound opportunity: invest in America. I was enormously gratified by the strong interest expressed by the leaders of each of these world-class shipbuilders in establishing U.S. subsidiaries and investing in shipyards in the United States,” Del Toro said in a statement published Wednesday night.

During the trip, the secretary met with executives from and toured the shipyards of Hanwha Ocean and HD Hyundai Heavy Industries. The discussions “centered on attracting Korean investment in integrated commercial and naval shipbuilding facilities in the United States,” according to the statement.

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The visit is part of an initiative the secretary launched in September, which he calls “a new maritime statecraft,” part of which focuses on attracting shipbuilders from allied countries to invest in the United States’ defense industrial base by establishing shipyards stateside.

In recent public remarks at events such as Surface Navy Association and West, Del Toro has referenced rarely-used authorities that he and the secretary of transportation hold that allow them to subsidize certain shipbuilders if a vessel has dual-use as a commercial and military vessel.

“If a ship, a commercial vessel that has dual military use or purpose, costs $100 million here in the US, but it costs $80 million overseas, then we could subsidize that shipbuilder here in the US with an additional $20 million and allow them to build that ship here in the US as opposed to overseas,” he told reporters at SNA.

The new statement from Del Toro refers to those authorities again, citing numerous vacant, but intact shipyards scattered throughout the US, which he called “ripe” for “redevelopment as dual-use construction facilities.”

Both Hanwha and HD Hyundai, two of South Korea’s biggest shipbuilders, have previously expressed interest in expanding to North America. Representatives from the companies joined South Korean government officials in November 2023 on a trip to several major US yards, Naval News reported.

In a brief post on LinkedIn reacting to news reports of Del Toro’s visit, a page associated with HD Hyundai wrote, “We would become a shipbuilder that contributes not only to the development of the RoK Navy and the Philippine Navy, but also to the advancement of the U.S. Navy fleet.”

Although the US has several dozen shipbuilders of varying sizes scattered throughout the country, the Navy heavily relies on a handful of the biggest primes to build its fleet. Notably, two of those builders, Austal USA and Fincantieri Marinette Marine, are subsidiaries themselves of foreign-owned companies based in Australia and Italy, respectively.

“As I saw firsthand during my shipyard visits in Korea this week, Hanwha and Hyundai set the global industry standard,” Del Toro said in his statement. “I could not be more excited at the prospect of these companies bringing their expertise, their technology, and their cutting-edge best practices to American shores. As world class leaders in the global shipbuilding business, they are poised to energize the U.S. shipbuilding marketplace with fresh competition, renowned innovation and unrivaled industrial capacity.”