U.S. Government Signals Potential Stake Acquisition in Shipbuilding After Semiconductors
HD Hyundai Heavy Industries and HD Hyundai Mipo Merge to Expand Export Market
U.S. Treasury Secretary Scott Besant has hinted at the possibility of acquiring equity stakes in local shipbuilding companies. The U.S. administration previously secured shares in its domestic semiconductor company, Intel, by converting subsidies into investments, and there is speculation that a similar approach could be applied to the shipbuilding industry. Attention is focused on whether related discussions will proceed alongside the $150 billion shipbuilding investment package that South Korea has agreed to provide to the United States.
In an interview with Fox Business on the 27th (local time), Secretary Besant was asked whether President Donald Trump was also considering acquiring shares in the semiconductor company Nvidia. He replied, "I don't think Nvidia needs financial support," but added, "There could be other industries. There could be areas like shipbuilding that we are trying to restructure." He further explained, "These industries are important ones that must be self-sufficient within the United States."
Secretary Besant's remarks came at a time when the Korea-U.S. shipbuilding cooperation project, "MASGA" (Make American Shipbuilding Great Again), was launched following the Korea-U.S. summit. Hanwha has decided to invest 7 trillion won in the Philadelphia Shipyard, and HD Hyundai has signed a memorandum of understanding (MOU) for the "Korea-U.S. Joint Shipbuilding Investment Program," which includes the acquisition of U.S. shipyards. The U.S. government's mention of possible equity participation comes as full-scale cooperation is beginning.
Experts have analyzed Secretary Besant's comments as being strategic in nature. Yang Jongseo, a senior researcher at the Export-Import Bank of Korea, said, "The United States has never demonstrated global competitiveness in shipbuilding, but in the mid- to long-term, it will inevitably try to take the lead. This statement reveals that direction."
Attention is expected to focus on the negotiation process for the $150 billion shipbuilding investment package agreed upon by the United States and South Korea. The nature of this package remains unclear, and further discussions between the two countries are required.
Researcher Yang added, "At present, the package has only been presented as a negotiation card, so it is difficult to determine whether it will be a point of conflict or complementarity. If the Korean government directly injects funds in the future, it will have to be in the form of equity; otherwise, it is more likely to be financial support for companies." He also predicted, "For Korean companies, negotiating the equity structure, including voting and management rights, may be a more important issue than profit sharing."
The industry is concerned about the many unexpected obstacles that the MASGA project may face. For the project to begin operating immediately, it is urgent to find ways to bypass U.S. legislation. The "Burns-Tollefson Act" stipulates that U.S. warships, their hulls, and major components cannot be built overseas.
The "Jones Act," which requires only U.S.-built vessels to be used for cargo transport between U.S. ports, has also been cited as a major regulatory barrier to Korea-U.S. shipbuilding cooperation. The Korean government is requesting ways to bypass these regulations through executive orders. Earlier, Wi Sunglak, Director of National Security at the Presidential Office, also suggested at a press briefing on the 22nd that exceptions are possible, indicating that Korea could build U.S. ships without legislative changes. One proposal involves U.S. shipyards manufacturing warships in "block modules"-such as the bow, midsection, and stern-which would then be assembled in the United States.
A high-ranking official from the Defense Acquisition Program Administration stated, "On September 17, we will hold a forum with the Center for Strategic and International Studies (CSIS) in Washington, D.C., and during this period, a plan to temporarily bypass regulations through executive orders to allow ships to be built in Korea will be discussed."
Labor union issues are also seen as a major obstacle to shipbuilding cooperation. With the passage of the "Yellow Envelope Law" (amendments to Articles 2 and 3 of the Trade Union and Labor Relations Adjustment Act) in the National Assembly, shipbuilding unions have maintained a hardline stance, raising concerns about labor-management conflict. On the 26th, the Geoje-Tongyeong-Goseong Shipbuilding Subcontractor Branch of the Korean Metal Workers' Union demanded direct negotiations with Hanwha Ocean, the primary contractor. The HD Hyundai Heavy Industries union began a partial strike last month and is now in its second round of strikes. These consecutive strikes are inevitably causing delays in ship construction.
Park Jin-ho, former policy advisory member at the Ministry of National Defense, stated, "Korea-U.S. shipbuilding cooperation is important for the trickle-down effect on the stagnant U.S. manufacturing sector and for strengthening the competitiveness of Korea's shipbuilding industry," adding, "Long-term policies should be developed to maximize benefits for both countries."
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