6 Reasons to Say “No Thanks” to Building U.S. Navy Warships in South Korea (From RealClearDefense)

The full text of this article is available below and in RealClearDefense at the link here.

The U.S. Navy is lagging in shipbuilding, so there’s a stunning offer on the table from a close ally.

HD Hyundai Heavy Industries says they can scale up to build 5 Aegis destroyers per year for the U.S. Navy. “We have over 250 engineers capable of designing and constructing Aegis destroyers with the same level of performance as those built in the United States,” the South Korean shipbuilder said.

Not so fast. Factors from survivability to economic risk, Chinese surveillance and the reaction of Congress point to investment, not importing, as a better path forward for maritime cooperation with allies.

The U.S. Navy’s industrial base is stretched to the limit, and China’s navy is now bigger than America’s. “We are still the dominant naval power, but our adversaries are closing the gap at an accelerating rate. We need to make important cultural and strategic changes in order to maintain our competitive advantage,” Secretary of the Navy John Phelan told the Senate Appropriations Committee’s Defense subcommittee on June 24. A recent RAND study suggested that Japan and South Korea offer a “natural industrial alliance capable of revitalizing U.S. maritime dominance.”

Subcontracting nuclear submarines or aircraft carriers to an ally is not possible.  At issue is whether an ally like South Korea or Japan can fill in the gap in production of guided-missile destroyers. The U.S. Navy’s Arleigh Burke-class DDG-51 is truly the Swiss Army knife of the Navy fleet. These destroyers are a far cry from the “tin cans” of World War II fame. The USS Carney and others have shot down Iranian ballistic missiles and defended against a 360-degree, 24/7 threat from Houthi missiles, drones, and surface craft. This spring, the USS Pinkney conducted Operation “Stellar Banshee,” a test program to intercept hypersonic, medium-range ballistic missiles. Aegis destroyers will be a major part of every scenario, from carrier strike groups countering China in the Pacific to Golden Dome defense of the U.S. homeland.

The U.S. and South Korea already share numerous systems, including the Aegis radar and Standard Missiles. Just a few weeks ago, the destroyer USS William P. Lawrence (DDG 110) and the Republic of South Korea’s Sejong the Great-class destroyer ROKS Yulgok Yi-I (DDG-992) sailed together for a maritime exercise. Phelan liked what he saw on his April visit. South Korea’s latest Aegis-type destroyer “is about 10 percent bigger than ours — I actually thought the combat information center was better laid out, to be honest — and they can build that ship in three years at a third of the cost,” Phelan commented. “So, I would say all options need to be on the table.”

Sending a destroyer contract off to a South Korean yard is tempting. But here are six reasons why the Navy should say “no thanks” to buying destroyers abroad.

Survivability. The number one concern is survivability. U.S. Navy destroyers must meet the highest standards for everything, from hull strength to combat systems, distributed firefighting systems, and individual components such as pumps, motors, and valves. Shock testing with live ordnance is mandated for each new ship class. These standards were born of combat experience. We want to know that they can take a hit and keep operating essential systems necessary for the ship and its crew to survive. For example, the destroyer USS Cole stayed afloat after being attacked in the port of Aden in 2000, partly because its power generation system continued to provide power to critical damage control systems (that were also shock hardened) to pump out seawater. No proof has yet been offered that foreign yards can or will meet those standards and stay within the desired cost and schedule.

Buyer Beware.  Scaling up to five destroyer deliveries would be a massive job for the South Korean yards. To do so, they will have to raid their commercial yard workforce, recruit new personnel, and speed up production. The actual delivery times for South Korea’s destroyers are approximately two years, comparable to those of U.S. yards. Nor do South Korean yards deliver with full combat systems. The timeframe for South Korean destroyers versus U.S.-made destroyers does not appear to be an “apples-to-apples” comparison.

Economic Risk. Much of the dazzle of foreign shipyards reflects their commercial, not military, capacity. Yet the global shipbuilding market is churning. South Korea and Japan have both been crushed by China coming out of the COVID pandemic. In 2019, China accounted for 37% of the commercial ship orders, followed by South Korea at 31% and Japan at 16%. By 2024, China’s share had soared to 70%, while South Korea’s dropped to 16% and Japan’s plummeted to barely 5%. Shipyard labor problems are global.

China will be watching. Last week, South Korea indicted two Chinese nationals flying a drone over the USS Theodore Roosevelt while in the port of Busan last year. No doubt, the aircraft carrier crew was prepared with operational security, but who needs that risk when a destroyer is being built?

Congress. A foreign destroyer purchase would, of course, require action by Congress. Congress has been very supportive of a larger Navy, but procuring entire warships from South Korea could be a showstopper. Laws in place, including the Byrnes-Tollefson Act, prohibit foreign construction of U.S. Navy warships.

Investment is a better deal. Allied shipbuilders have a lot to offer, short of whole ship purchases. South Korea’s Hanwha Group bought the Philly shipyard in December 2024 and is bringing “smart yard technology” to increase production. “That is a conversation worth having, if we are engaging in a long-term naval arms race with China,” said Dr. Eric Labs of the Congressional Budget Office. “The U.S. may not be in a position to win on its own, and it’s going to need the industrial capacity of its allies,” he said.

The U.S. Navy and American shipbuilders are already on it. U.S. shipbuilder HII and major subcontractor Fairbanks Morse Defense both signed agreements with Hyundai in April. “There’s a lot of industrial constraints in the U.S., and so we’re going to have to look outside and see what else is out there,” George Whittier, who was then Fairbanks Morse CEO, said in an interview with Breaking Defense. “That doesn’t mean we’re going to say Koreans should build all of our ships. We’re certainly not advocating that. But we are saying, ‘Hey, where are things that they’re doing well that we can learn from them? What are some things that we’re doing well that they can learn from us?”

Likewise, Virginia-based HII and South Korea’s Hyundai Heavy Industries signed a memorandum of understanding (MOU) that will enable the companies to collaborate on best practices ranging from robotics to advanced manufacturing. HII Executive Vice President Brian Blanchette said the company will “explore all opportunities to expand U.S. shipbuilding capacity in support of national security.”

Maintenance, repair, and overhaul are also promising. In March, Hanwha Ocean completed a 7-month regular overhaul of the supply ship USNS Wally Schirra, marking the first time a South Korean yard had bid for and won such extensive overhaul work for the U.S. Military Sealift Command.

As tempting as a quick fix may be, the top priority should still be increasing capacity in the U.S. The U.S. must focus on the long game for maritime power and make solid investments to revitalize both Navy warships and commercial fleets. Partnerships with allies can make a significant contribution. But the keels need to be laid in American shipyards.