Del Toro Advocates for Increased Foreign Investment
Challenges in U.S. Shipbuilding Industry
According to USNI News, fresh from his tour of shipyards in South Korea and Japan, Secretary of the Navy Carlos Del Toro has called for increased allied foreign investment in U.S. shipyards while criticizing the build rates of domestic facilities. Del Toro’s visit to Mitsubishi Heavy Industries in Yokohama and South Korea’s Hanwha Ocean’s and HD Hyundai shipyards prompted him to urge Japanese and South Korean shipbuilders to invest more in both U.S. commercial and naval shipbuilding. Speaking at the McAleese Defense Programs Conference, Del Toro emphasized the need for U.S. shipyards to learn from their Pacific counterparts in retaining their workforces highlighting the comprehensive amenities provided by foreign shipyards to attract and retain workers. However, Del Toro has been critical of U.S. shipyards over lapsed schedules and cost overruns which have resulted in delays in ship deliveries under contract. He underscored the lack of investment by Department of the Navy suppliers in infrastructure redirecting resources towards stock buybacks and executive compensation. Despite foreign investment in U.S. naval shipbuilders’ $5 billion investment in infrastructure improvements, challenges persist in recruiting and retaining workers particularly as older employees retire and new hires prove difficult to retain.
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Divergent Perspectives on Future Shipbuilding Strategy
Del Toro’s calls for increased investment are echoed by U.S. ambassador to Japan Rahm Emanuel, who has also advocated for foreign investment in U.S. shipbuilding. However, the future remains uncertain as it is unclear what platforms, new shipyards would build given the expected flat Fiscal Year 2025 shipbuilding budget. While some suggest leveraging existing shipyards others like Shipbuilder’s Council of America President Matt Paxton, believe maximizing volume through existing facilities is a more strategic approach to building ships faster and ensuring timely repairs.
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