In the context of ongoing trade negotiations between Korea and the United States, the July Package has highlighted the potential for cooperation in the shipbuilding sector. However, experts caution that Korean shipbuilders encounter significant challenges that must be addressed before effective collaboration can ensue. During a recent 2+2 trade meeting in Washington, D.C., Korea presented a commemorative coin featuring a turtle ship and a liquefied natural gas (LNG) carrier to symbolize its commitment to revitalizing the U.S. shipbuilding industry. This gesture also aimed to bolster Korea’s standing during tariff discussions.
Despite this positive overture, industry professionals in Korea express a sense of caution, underscoring the need to overcome major obstacles for true collaboration. A critical issue is the acute shortage of skilled shipbuilding labor in the United States. According to recent data from the U.S. Bureau of Labor Statistics, the workforce at U.S. shipyards today is only about one-fifth of what it was during World War II. This labor shortage is evident at Philly Shipyard, acquired by Hanwha Ocean.
By late 2024, of the 1,700 local workers hired, only around 70 were skilled tradespeople, with many remaining unskilled or indirectly employed. Additionally, a weakened U.S. supply chain for essential ship components, such as steel and engines, further impedes progress. The maritime industrial base in the U.S. has dwindled substantially, with workforce numbers declining from over a million during wartime to under 200,000 since the 1980s. Limited naval architecture programs have also contributed to a scarcity of new talent entering the field.
While HD Hyundai Heavy Industries signed a cooperation agreement with Huntington Ingalls Industries to enhance production efficiency, these initiatives are still in their early stages. Legislative proposals such as the “Ensuring Naval Readiness Act” have emerged but have not yet passed, complicating plans to construct or partially assemble ships in Korea. As Korean shipbuilders face these considerable risks, upcoming government negotiations are essential. Hopes were initially high for securing maintenance and repair contracts for U.S. Navy vessels, but no announcements have been made thus far.
Experts suggest that a unified consortium among Korean shipbuilders is necessary to avoid competitive bidding wars and low margins for these contracts. Furthermore, there is a need for expanded access to MRO contracts for warships, which current regulations restrict to auxiliary vessels only.