HD Hyundai Heavy Industries Co. shipyard in Ulsan, South Korea. (SeongJoon Cho/Bloomberg via Getty Images)
WASHINGTON — South Korean shipbuilding giant HD Hyundai Heavy Industries signed a memorandum of understanding with Philly Shipyard to cooperate on construction and maintenance of naval vessels ordered by the US government.
Under the new deal, the two companies will “explore a potential business relationship relating to future U.S. government shipbuilding projects as well as maintenance, repair and overhaul projects, according to a Philly Shipyard statement.
“We look forward to further growing HHI’s presence in the global defense market through collaboration with US companies in government and military vessels building and MRO business” said Won-ho Joo, an executive with HD Hyundai Heavy Industries.
Philly Shipyard meanwhile sits at what was once a US Navy shipyard in the eponymous city. It is a subsidiary of the Norwegian industrial investment group Aker ASA, headquartered in Oslo, Norway. Founded in 1997, it is best known for its work on commercial container vessels and tankers.
“Philly Shipyard and HD Hyundai have a long and gratifying history of working together, and we are honored by the idea of future cooperation with HHI on opportunities for U.S government shipbuilding project,” said Steinar Nerbovik, president and CEO of Philly Shipyard.
The two companies previously worked together on the construction of 22 commercial product tankers, according to Philly Shipyard.
The MOU is the latest in a series of moves by South Korea’s defense industry to ingrain itself into the American supply chain, a move that was ostensibly precipitated by Navy Secretary Carlos Del Toro visiting Asia in recent months and openly inviting such investments.
Prior to today’s announcement, South Korea’s other major shipbuilder Hanwha offered an unsolicited takeover bid to the Australian contractor Austal, which would have included a controlling stake of the Alabama-based Austal USA. The Australians rejected the bid over regulatory concerns — issues Hanwha said would not have thwarted the deal — but both sides seem to leave open the possibility of a deal moving forward.
Separately, the Biden administration came out forcefully against a proposed deal by Japan’s Nippon Steel to acquire Pittsburgh-based U.S. Steel earlier this month. While the Japanese company was not one Del Toro said he visited during his trip to Asia, that potential deal strikes at a sector upon which shipbuilders rely.
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