US Secretary of the Navy Carlos Del Toro toured the shipyards of HD Hyundai Heavy Industries and Hanwha Ocean on Tuesday to explore their military shipbuilding capabilities for handling comprehensive support services for the US Navy fleet, as part of US defense needs to bolster its naval presence in Asia.
Del Toro's visit to Korea comes as the US contemplates outsourcing naval ship maintenance, repair, and overhauls, or MRO, to alleviate domestic capacity constraints. These services keep naval vessels in optimal condition and ready for deployment. There is also an interest in constructing naval vessels in allied nations like South Korea and Japan as cost-effective alternatives to strengthen the US naval presence in Asia in response to China's rapidly expanding fleet.
HD Hyundai Vice Chairman Chung Ki-sun met Del Toro at the company’s Ulsan shipyard on Tuesday, where they discussed the shipbuilder's technological capabilities and strategies for strengthening US-South Korean maritime cooperation. Del Toro personally inspected significant naval projects at the HD HHI shipyards, including the Republic of Korea Navy's forthcoming Aegis destroyer, the ROKS Jeongjo the Great, and the Chungnam-class frigate, both nearing delivery.
HD HHI previously submitted an application for a Master Ship Repair Agreement in 2023 to qualify for US Navy ship MRO tasks, which was followed by a successful yard inspection early this year. By establishing a logistics support center in the Philippines in 2022, HD HHI became the first Korean shipbuilder to expand its MRO business internationally.
Moreover, HD HHI is actively engaged in building 14 ships for international clients, including patrol vessels and frigates in the Philippines.
Del Toro also visited Hanwha Ocean's shipyard in Geoje, South Gyeongsang Province, guided by CEO Kwon Hyek-woong on the same day. He observed the construction of the advanced JangBogo KSS III Batch-II submarine and toured the shipyard's modern production facilities.
Hanwha Ocean has engaged in international technical partnerships to deliver full-spectrum MRO solutions, including technology transfers and support services. The company has a track record with the overhaul of 24 Jangbogo-I and II-class submarines, enhancements to three Jangbogo-I-class submarines, and current performance upgrades for three Gwanggaeto the Great-class destroyers
Earlier on Monday, South Korean Defense Minister Shin Won-sik and Del Toro convened at the Yongsan National Defense Complex, agreeing that defense industry collaboration is vital for reinforcing the naval strength of both nations by ensuring supply chain stability and improving joint operational efforts.
According to the US Naval Institute, China commands almost 50 percent of the global shipbuilding market, with South Korea and Japan following at nearly 30 percent and 17 percent, respectively. US capacity is only 0.13 percent.
The Pentagon's National Defense Industrial Strategy report last month pointed out the decline in the US's maritime military production capacity, leading to delays and increased costs in key weapons programs. The report attributes China's commercial shipbuilding success over the past 40 years to the US's market-driven approach since the 1980s.
In the strategy report, Del Toro criticized defense contractors for their late and over-budget project deliveries, though he did not name specific companies.
