WASHINGTON — South Korean conglomerate Hanwha today announced it had closed its $100 million deal to take a controlling stake of Philly Shipyard, capping off one of the company’s most aggressive moves this year to solidify its foot in the American defense industrial base.
“Hanwha Philly Shipyard begins an exciting new chapter today,” said David Kim, the newly appointed CEO of what is now called Hanwha Philly Shipyard. “We plan to grow and build on a long tradition of success, by expanding production using advanced technologies, and supporting the national revitalization of U.S. shipyards.
“Together, we begin working toward our vision for Hanwha Philly Shipyard: to be a trusted U.S. shipbuilder, challenging and redefining sustainable maritime solutions for commercial and government clients. We intend to do that by pushing the boundaries of shipbuilding by combining people with technology to build best-in-class vessels.”
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A Hanwha executive told reporters in October that the company plans for Philly Shipyard to focus on securing US Navy contracts for specialty ships such as icebreakers, replenishment oilers and training vessels, but not warships such as destroyers.
Hanwha made its initial offer to purchase Philly Shipyard, which until now was owned by the Norwegian industrial investment group Aker, in June. The shipyard, based in the eponymous city was once the site of a US Navy facility and has focused on producing container vessels and tankers under Aker’s ownership.
In addition to acquiring Philly Shipyard, Hanwha this year also named Mike Smith to lead its American business unit, announced its first win of a repair contract for a US Navy ship and pursued, but ultimately dropped, a takeover bid submitted to Australian shipbuilder Austal, whose American subsidiary is a key contractor for the Pentagon.
In the background of it all has been outgoing Navy Secretary Carlos Del Toro, who has made encouraging foreign investment into American shipyards a key element of his “Maritime Statecraft” initiative, as reported in this deep dive Breaking Defense report. He visited Hanwha and other Asian defense industrial giants early in the year and has publicly lobbied them to bring their money, technology and talents to benefit the US Navy.
Those efforts have not always been welcomed by American industry.