U.S. Shipyard Key to Trump’s American Revival Is Already Too Busy
‘More space’ needed at Korean-owned Philadelphia site, with talks under way to potentially make U.S. naval vessels
- Hanwha, owner of Philly Shipyard, plans to invest $5 billion to increase annual output from one or two vessels to 20.
- Hanwha is in discussions with U.S. government officials to expand capacity and property in the Philadelphia region due to high demand.
- Hanwha Defense USA has partnered with HavocAI to develop 200-foot unmanned surface vessels, aiming for U.S. Navy supplier arrangements.
SEOUL—The new South Korean owner of the historic Philly Shipyard has a problem: too much demand.
It was just over a year ago that Hanwha Ocean 042660 7.01%increase; green up pointing triangle, one of the world’s largest shipbuilders, bought the Philadelphia facility, a storied naval yard that has shriveled under competition from Asian competitors, particularly in China.
Today, Philly Shipyard is central to President Trump’s goal of reviving American shipbuilding and enlarging the U.S. Navy’s fleet. Hanwha, which has deep pockets and extensive shipbuilding know-how, has vowed to plow $5 billion into upgrades and dramatically multiply the workforce.
Hanwha is already in active conversations with the Trump administration, and primarily the Pentagon, for potential deals to make surface, subsurface and unmanned vessels, said Michael Coulter, who heads Hanwha Defense USA, the U.S. subsidiary of the South Korean conglomerate that makes ships, munitions and other military hardware.
But first, “we simply need more space,” he said.
The company aims to ultimately crank out up to 20 ships a year in Philadelphia, up from annual output of just one or two vessels recently. It plans to bring in modernized manufacturing methods—such as automation and robotics—from the firm’s world-class South Korean operations.
But Coulter said it appears the manufacturing need will exceed the capacity of the two docks it currently owns in Philadelphia. To accommodate more volume, Hanwha is in active discussions with multiple federal, state and local officials about opportunities to expand capacity and property for storage around the Philadelphia region.
That includes potentially gaining access to the unused or underutilized docks at the sprawling Philadelphia shipyard that Hanwha doesn’t own. Hanwha is also exploring arrangements where the company’s excess orders could be built at other shipyards’ docks, Coulter added.
“From a demand standpoint,” he said, “every time we turn around there is an interest in using Philly.”
Hanwha is also seriously considering a purchase of a second U.S. shipyard in another region within the next several years, Coulter said: “We think there’s a unique time in history right now.”
Hanwha has pre-existing orders of nearly 20 vessels at the Philadelphia site. That includes commercial ships, including a big order from the shipping subsidiary of Hanwha, as well as vessels for the U.S. Maritime Administration, a federal agency within the Transportation Department.
It also could include construction of a nuclear-powered submarine for the South Korean navy. In October, Trump said the stealthy submarine—technology that required U.S. signoff—would be built in Philadelphia. But Seoul has argued for the vessel to be constructed in South Korea.
Coulter said Hanwha is fully capable of making submarines in the U.S. or South Korea, adding that the decision will be left to the two governments.
The potential interest in expanding the manufacturing footprint in Philadelphia is highlighted by a new partnership, set to be announced Thursday, between Hanwha Defense USA and HavocAI, a Rhode Island-based firm specializing in the software for sea drones.
The two companies hope to win supplier arrangements with the U.S. Navy for hundreds of these autonomous surface vessels, which can shoot missiles, ferry cargo and conduct surveillance, said Paul Lwin, CEO of HavocAI. The Trump administration has recently earmarked more than $3 billion for medium and small surface sea drones.
The new partnership with HavocAI could add more work in Philadelphia. HavocAI has already sold more than 30 of its smaller autonomous surface vessels to the U.S. military. The two companies will collaborate on the development of 200-foot unmanned vessels.
“Hanwha knows how to design vessels, so that’s the expertise Hanwha brings,” said Lwin, a former U.S. Navy weapon systems officer, who co-founded HavocAI two years ago.