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U.S. Navy Secretary Looks to Asia to Revive Shipbuilding at Home; encourages S Korean and Japanese firms to invest in small American yards

Secretary of the Navy Carlos Del Toro addresses the audience during the I Marine Expeditionary Force change of command ceremony at Marine Corps Base Camp Pendleton, California, Feb. 16, 2024.

Posted on February 28, 2024

The US needs to revive domestic shipbuilding with increased funding from Congress and investment from overseas, Navy Secretary Carlos Del Toro said, framing the issue as a matter of economic security in the competition with China.

Del Toro said on Thursday that he planned to travel to Japan and South Korea soon to encourage investment in shipbuilding, especially at smaller yards. He called for getting congressional appropriators on board “so that we can get started moving in the right direction.”

“China has been able to build a tremendous commercial shipbuilding industry over the course of the last 40 years,” Del Toro said at an event hosted by the Aspen Strategy Group and Bloomberg LP, the owner of Bloomberg News. “We’ve lost that capability from about the 1980s when we left it open to market forces.”

Del Toro’s remarks follow on sentiment expressed in the Pentagon’s National Defense Industrial Strategy that was released last month. It said China had become a shipbuilding powerhouse and called for an injection of fresh ideas — and venture capital — to revive the US industrial base.

For Del Toro, the path toward expanded shipbuilding capacity travels through South Korea and Japan, which he said were “great allies and partners” in the effort. According to the US Naval Institute, China now has almost 50% of the global shipbuilding market, with South Korea and Japan in second and third place at almost 30% ad 17%. US capacity accounts for 0.13% of the global market.

Diminished capacity has led to delays and cost overruns for several crucial weapons programs, including to build aircraft carriers and submarines. While refusing to name any companies, Del Toro criticized contractors that deliver on orders late or over-budget.

“It’s the company’s responsibility to deliver things on time and not simply make excuses,” he said. “I fully understand that the supply chain has been challenged because of Covid and many other issues around the globe. But don’t just talk to me and use that as an excuse, talk to me about what is it that you’re going to do to try to make that better.”


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