On the opening day of the International Workboat Show, a seminar looked at the prospect of shipyards on opposite sides of the globe joining forces to build commercial and military vessels more efficiently. “Collaborating Across Oceans: Building Naval Power Through Global Shipbuilding Partnerships” was moderated by Dr. Craig Hooper, CEO of Themistocles Advisory Group, MC. He was joined on stage by Kai Skvarla, CEO of Davie Defense, and by David Kim, CEO of the Hanwha Philly Shipyard, which is owned by a South Korean parent company.
Skvarla opened the session with the announcement that Davie on Dec. 1 completed the acquisition of Gulf Copper shipyard in Galveston, Texas. The facility adds to the Davie portfolio that includes yards in Quebec, Canada, and Helsinki, Finland. Davie builds icebreakers and complex commercial ships.
“As recently as 10 years ago, the thought of building a U.S. ship in another country didn’t compute,” Skvarla said in response to a question from the audience that focused on the possibility of a U.S. warship built in another country.
Added Kim, “The Hanwha Philly Yard is focused on building ships in the U.S. We have a yard in Korea that has a significant size and level of experience, and that yard has offered to help the U.S. government to meet capacity.”
While Davie operates on more of a lean-and-mean corporate structure, Hanwha is part of a large conglomerate that has more than 70 companies under its umbrella.
Hanwha is looking to significantly grow the Philly operation, which currently builds one to 1.5 ships per year. After spending $100 million to acquire the facility and investing millions more, the company is planning a $1 billion investment in the yard with the goal of expanding production to 20 ships per year. Improved efficiency measures that have been implemented in Hanwha’s South Korean yard will be employed in the U.S. operation that will also hire more employees and add equipment, including a second Goliath crane.
When asked what is different about the current regulatory environment, Skvarla said, “(Previously) we’ve operated within an ecosystem with constrained budgets and the industry being beaten up by government oversight. (Now) we find ourselves in a place where there’s a little room to maneuver, and the pendulum is starting to swing back with the industry enjoying bipartisan support on the hill.”
When Hooper asked the panelists to name three things the government could do to help shipyards be successful, Kim said that consistent demand signals take priority. “When you’re trying to make big investments in a shipyard, one thing the government can do to help is provide a consistent demand signal,” he said. Other areas that need support are the workforce and supply chain initiatives.
Kai said that the government could help the industry by being open to “distributed shipbuilding practices” where sections of a vessel could be outsourced by the primary contractor to other fabricators using modular construction processes. About 10 years ago, the United Kingdom built an aircraft carrier using modular outsourcing.
Kim echoed those sentiments, saying, “We don’t need to be the primary for all ships. We are exploring possibilities of using modular processes to build ships.”
Looking ahead, the two companies are considering different ways to leverage their strengths. Because of the company’s size, Hanwha can employ varying and more advanced technologies to improve efficiency. Once those processes are successfully implemented at its South Korean yard, the company can leverage its experience and bring instructors to the U.S. to speed up the learning process for domestic employees.
“Fundamentally, it strengthens ties between Korea and the U.S.,” said Kim. “We’ve been working and discussing with the government, ‘How do we align with their priorities to help them in the best way we can?’.”
