Articulated robots move inside the Hanwha Qcells Solar plant, Oct. 16, 2023, in Dalton, Ga. South Korea’s Hanwha Group recently completed its acquisition of what’s now called the Hanwha Philly Shipyard from shareholders led by Norway’s Aker industrial group. (Mike Stewart/AP)
Dec. 20 (Tribune News Service) — South Korea’s Hanwha group says it plans to hire a “significant number” of workers to expand what’s now called the Hanwha Philly Shipyard, after completing its $100 million purchase of the former U.S. Navy facilities from shareholders led by Norway’s Aker industrial group.
David Kim, the Hanwha Defense USA executive who planned the deal, has been named chief executive at Hanwha Philly, Hanwha said in a statement Friday.
“We plan to grow,” he said, by “pushing the boundaries of shipbuilding” to build for both commercial and government buyers.
While under Aker the yard built civilian ships, Hanwha’s Systems and Ocean divisions have stressed their experience building naval ships, drones, and radar and sensor systems on its giant shipyards on Geoje Island in the strait between Korea and Japan.
The company wants “to expand into naval vessel production,” Kim said in his statement. The company promised “a smooth transition” and “sustainable and inclusive growth.”
The deal was approved by the Committee on Foreign Investment in the U.S. (CIFUS) in September.
Bipartisan legislation has been proposed to encourage construction of hundreds of U.S. commercial ships at U.S. yards such as Philadelphia to better compete with China’s larger merchant fleet. The SHIPS Act’s sponsors include Rep. Michael Waltz (R., Fla.), who President Donald Trump has tapped as his national security adviser.
Hanwah is “very positive about this opportunity to enter the U.S. market” and offer Philadelphia “a historic opportunity” for revitalizing its once-extensive shipbuilding industry with modern technology, said David Oh, a former Philadelphia City Council member who met with Hanwha and South Korean officials in advance of the deal.
Oh said he expects Hanwha’s focus to include developing Navy surface and underwater vessels at a time the service is developing unmanned craft of varying sizes.
Some in Washington have raised concerns about foreign investment in strategic U.S. industry. Though some in the local steelworkers’ union supported Japan-based Nippon Steel’s bid to buy U.S. Steel, President Biden moved to block the deal, and President-elect Trump has also says he’s opposed.
But Navy Secretary Carlos Del Toro has urged companies in U.S. allies South Korea and Japan to invest in U.S. military plants at a time when U.S. investors have largely avoided heavy industry in favor of faster-profit biotech and digital ventures. In July, Korea-based LIG Nex1 said it had paid $240 million — more than double the shipyard’s price — for a 62-worker Philadelphia military robot maker, Ghost Robotics.
Del Toro visited the Philly Shipyard in September with Transportation Secretary Pete Buttigieg and other federal officials and met with Kim and others from Hanwha during the ceremony to dedicate the training, hospital and multipurpose vessel State of Maine, funded by the U.S. Maritime Administration.
Despite years of government subsidies and contracts and the protection of the federal Jones Act, which requires commercial ships used between the U.S. and its overseas possessions to be built at U.S. yards, the Philadelphia Shipyard had run out of orders and was down to a skeleton staff as recently as 2020.
Thanks to new contracts, the yard now employs around 1,700 — nearly as many as when the Navy closed its shipyard on the site, the nation’s oldest, in 1996.
Under Aker, the yard in the last four years has built more ships than any of the handful of remaining U.S. shipyards, with contracts to build commercial vessels as well as government-funded training ships.
But in a report to investors last year, the shipyard warned that even with the new orders, it has been losing money. If it were to become profitable, it would need to expand to do ship maintenance and build more vessels.
Expansion will require training more workers. Since the decline of Delaware River shipbuilding in the 1980s and ‘90s, fewer locals have learned marine welding and other key trades. Around two-thirds of the current staff are contract employees, including veterans of shipyards along the Gulf of Mexico. The Boilermakers, Operating Engineers, and other unions at the yard have been recruiting apprentices.
While much of the former Naval Base surrounding the yard is now home to civilian offices such as Urban Outfitters and WuXi AppTect, the Navy itself is the largest tenant. Planners hope to reclaim space for shipbuilding, possibly including some of the piers now used to mothball old Navy ships for sale or scrapping.
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