US Navy is desperate to close the gap with China. Can Japan or Korea save US shipyards?
Two decades of underinvestment in US shipbuilding capacity have led to a crisis in US Navy procurement, and a total loss of the civilian industry. We now have just a tiny handful of American companies that build ships at all, and those who do, build exclusively for the US Navy.
US shipbuilders are non-competitive against dual-purpose shipbuilders from China, Japan, and Korea, who have multiple revenue streams that can finance new investment and best practices. For military ships, Denmark provides a recent case study of developing a best-in-class missile frigate at about a fourth the cost of the US Navy’s latest-generation frigate.
US Navy officials are racing to close the gap with China, the world’s number largest shipbuilder and now the largest navy, and hope Japan and Korea are willing to invest in and upgrade abandoned US facilities.
Resources and links:
US Navy Looking to S. Korean, Japanese Shipbuilders to Revive American Shipyards
https://www.voanews.com/a/us-navy-looking-to-s-korean-japanese-shipbuilders-to-revive-american-shipyards/7518826.html
CNN, These may be the world’s best warships. And they’re not American
https://www.cnn.com/2023/06/02/asia/japan-south-korea-naval-shipbuilding-intl-hnk-ml-dst/index.html
Reuters, U.S. wants Japanese shipyards to help keep warships ready to fight in Asia
https://www.reuters.com/world/asia-pacific/us-eyeing-japanese-shipyards-warship-overhauls-says-us-ambassador-2024-01-19/
‘Desperate’ US Seeks Japan’s & South Korea’s Help To Restart Its Defunct Shipyards; Keep Pace With China
https://www.eurasiantimes.com/desperate-us-seeks-japans-keep-pace-with-china/
U.S. Navy Secretary seeks Korean and Japanese investment in U.S. shipbuilding
https://www.ajot.com/insights/full/ai-u.s-navy-secretary-seeks-korean-and-japanese-investment-in-u.s-shipbuilding
Graphic, U.S. Defense Spending Compared to Other Countries
https://www.pgpf.org/chart-archive/0053_defense-comparison
Sea Forces, Danish Iver Huitfeldt-class Guided Missile Frigate
https://www.seaforces.org/marint/Danish-Navy/Frigate/Iver-Huitfeldt-class.htm
South Korean Shipbuilder Hanwha Makes $100M Bid to Buy Philly Shipyard, SECNAV Del Toro Praises Deal
https://news.usni.org/2024/06/20/south-korean-shipbuilder-hanwha-makes-100m-bid-to-buy-philly-shipyard-secnav-del-toro-praises-deal
Chart: Chinese Navy vs US Navy
Closing scene, Ningbo, Zhejiang
50 Comments
Reality of the U.S. Shipbuilding industry:
👉 Shipbuilding output had decreased more than 85% since the 1950s.
👉 Number of U.S. shipyards capable of building large vessels had decreased by more than 80%.
Reality of China's shipbuilding industry:
👉 Chinese shipbuilders now collectively account for more than 50% of all commercial tonnage produced globally each year.
👉 China had overtaken South Korea in overall shipbuilding competiveness in 2023.
👉 In 2023, China attracted 59% of the shipbuilding contracts. That means, in the coming decade, most large sea-faring vessels will be built in China.
China has one distinctive competitive advantage that will be quite difficult for the U.S. to catch up: cost efficiency and state support. In addition to be a cost leader for the past decade, China's shipbuilding industry also enjoyed support from the government that allowed it to achieve both quantitative and qualitative growth. It is going to be very difficult for the U.S. to compete with China on this front. I think there is one strategy that China can employ to further its competitive advantage and the U.S. can employ to lower its shipbuilding cost: Use data analytics to lower employee churn rate. In today's increasingly competitive market, talent acquisition and retention becomes increasingly important for enterprises. If a company has to frequently hire new employees and train them, the cost of training the new employees can add up and drain its bottom line. Data analyitcs can help companies figure out where employee attrition occured and what had caused it, and enable companies to predict future employee churns and take actions to address the issues that may cause employees to leave the company. If successfully implemented, this strategy will help reduce cost and thus increase competitive advantage.
Interesting topic. Thanks for anther high quality video!
The last segment about US viewed defence projects as a means to win local votes. It is the same in Australia. Ambitious politicians wanted to do a quantum leap, from the conventional diesel submarines, to nuclear powered ones. Then as soon as the money wagon arrives, the states argue about where is the best location to build nuclear subs, that is before Australia actually has any nuclear expertise.
It is NOT about the subs, it is about jobs, and jobs bring in votes for the respective politicians.
In regard to inviting Korean or Japanese shipbuilders to the US. Regardless of who is going to build them, the cost would be many time more than in Korea or Japan. The work culture is also very different between the US and Asia. Asian workers are more cooperative, while the US Shipbuilding Union would have a dim view of Asian practices.
Other than the issues mentioned above, why would Japan and Korea want to beef up US shipbuilding at the expense of their own?
Another solid commentary, thanks. Lack of experienced foremen in shipbuilding, actually most US. manufacturing, dooms rapid reshoring. The good news is finance capitalim that caused this mess seems to be a self-correcting problem
Good morning kevin. Fart and throw up. Is this guy on drugs. Kevin, is your family ok?
sounds good on paper, it will be 10+ years before the poodle ship(s) will roll off the assembly line.
sounds like another tsmc – build it in usa or you don't build at all,
It is more practical to let Japan and South Korea build ships inside the countries and then SHIP them (more likely the ships sail by themselves) to the United States.
AI will solve the problem and build ships LOL
After WW2 the US had the genius insight of pacifying both Japan/Korea and Germany by outsourcing them some of the manufacturing needed for the Cold War. Japan made the weapons for the Korean war and rebounded, Germany re-armed Europe and rebounded and both of them got a new identity instead of turning back to resentment over their loss … because they became rich they got over the fact that they are in fact still occupied countries. Their wealth was not a challenge to the US as they are to this day occupied puppets of the US and they cannot do anything the US doe snot allow, not even marginally. In contrast to them China's growth is independent of the US. There is no US occupation, "reeducation" and "democratization" of China. China became rich and this is a danger to the US, China has a nationalism, remembers the "century of humiliation" and cannot be directly controlled.
The US destroyed its two most productive puppets with ideology. The demographics is catastrophic in Korea, Japan and Germany, on top of that the US NGOs flooded Europe with migrants in a bid to engineer more controllable people that can not challenge it in the future. The anti-nuclear lobby destroyed the energy supply for them and the war and sanctions dealt the final blow. The US will take what it can from these puppets and sustain itself for a little bit more on their collapse. After that the only war for the US to stay on top is to start a war with China.
As if Japan can build ships en mass with their declining population.
Again I suppose is “China’s fault”…and not their owing doing , lack of foresight and corruption !
The US is fighting against itself with everything, thinking that the rest of the world is still behind their governments which is running a PONZI Scheme. Even Bernie Madoff agree to that.
Out-sourcing is what US doing for decades. And the reality’s that there’s no way to take anything back!
Economics is the study of human behaviour
On the other hand, the US has completed more destroyers, aircraft carriers, and nuclear-powered submarines than China in the 21st century, specializing in cutting-edge ships.
For me, US is dare to fight with Russia and China or North Korea, or Iran one on one directly. Why? Imstead to bullies much smaller countries
Another great episode… Jones Act…. who knew?? Thanks. Really no bull, just great curated analysis.
One of the problems with US shipbuilding is the lack of specialist skilled labor, for example welders.
What an contrast to Americas ww2 capacity, launching battle ships in less than 4 months, and liberty ships in couple of days. This all became the rust belt, it tragic. The decline is linked to the policy makers
The Globalists wanted a weak America and they have succeeded. The Globalists didn't count on other powers taking over where America left the vacuum.
W❤❤❤
This channel is heavily biased.
Demographics in Japan and Corea…. Soon no employees there either…
why not just buy ship from china?
Japan and Korea is wise to take cue from Taiwan TSMC buiding a semi-conductor factory in America.
The same problems would cropped up.Only America does not understand that the FUNDAMENTAL problem is America , nothing else
The US is anxious to reach $40 trillion debt by 2025/6.
USA is the biggest terrorist organization ever.
China manufacturing suffered yet another decline in July. Chinese economy in free fall. USA less worried than you think.
The goal is not building, the goal is spending.
And this is a super-polite way to go about it.
Awesome truth
All the destiny's and jake tappers and general patreuses will confidently point to america's military budget and conclude they have the best military because the budget is the highest
We play with DEI, pronouns, and Millions of Illegal Aliens, while China and Russia progress.
As someone that was in the navy and is now in commercial shipping, WITH WHAT WORKFORCE you literally made the navy the sole employer of shipyards because why would you want smaller ship projects with strict timelines, instead of the governments blank check and "whoops we're delayed sorry will another year from now to build a ship work?"
We got where we are because instead of telling the corrupt MIC to shove it and that you're purpose driven, we let their corruption run rampant and put profits over everything, even national security
They can't even they want to sell their backside.
Better solution, ask China.
Australia is paying the US $354 billion for 8 Virginia class subs priced at 3.4 billion each. They can't fulfil this even when someone is throwing money at them.
Dreams will NEVER come true when you are a Judas, betray your country and sell out your heart and soul to Wall Street and the military/"defense" industry in exchange for "30 pieces of silver".
Could Judas turn back?
Of course not.
8 reasons why China is economic world champion as hub of manufacturing and factory of the world :-
Rich and Inexpensive Workforce
The Scale Economies
Sound Infrastructure Development
Raw Materials Availability
Public Assistance and Incentives
Efficiency and Technological Progress
International Integration and Trade Agreements
Efficiency of the Supply Chain
Only India can help US properly in every thing.
Shipping building is already a goner for the US. Dont forget Titanium as well, once China and Russia curtail this material. USAF and Boeing cant even build military and commerical planes.
Ship building is a perfect example of an industry that MUST be socialized.
Even the training for engineers and technicians who would work in shipbuilding would have to be socialized.
Paid by the government. Free for those workers.
And none of that will ever happen.
thanks
You will be rembered but not in a good way.
Economics is a study of scarcity is a mystical axiom. Produced goods can’t be scarce. Only labor or natural resources can be scarce given the existing technology. Technical progress creates product and process substitutes and labor saving processes. Classical economists didn’t conceive of economics in terms of allocating “scarce” resources, except in the contrived (exceptional) “law” of diminishing returns (increasing unit costs) applied to agriculture. Economics as taught in the West is a tool of miseducation. Economists today are the vicars of contrived (unrealistic) misconceptions, like priests proselytized the myth of the Catholic Church in the Middle Ages prior to the debunking during the Enlightenment.
Whether it is threats or sanctions Australia contracted with USA to have them build submarines at a cost of $4Trillion. However, the contract does not allow for US to refund the money to AU if US doesn’t supply them ships or they are defective. Poor AU can’t fight the deal. Recently AU stopped selling rare earth minerals to China. China currently has 80% of the rare earth minerals and 100% of the world’s processing. This sounds like a screwed up US sanction, since AU can’t export the goods to any other country as none of them have processing plants. AU must be like Canada, where 96% of the land is owned by the King. The balance by Indian Treaty…. And they think they are independent nations … ha, ha. Controlled by USA and owned by UK.
"Beware of the military industrial complex."
– DDE
And once they are productive, the US will take them over in the guise of national security!
Yeah America gets their business model from the lawyers that rule it. It's an authority based economy. It produces nothing of value.
YOU FORGOT – THE US LOVES TO CONFISCATE ASSETS UNDER THE GUISE OF NATIONAL SECURITY – WHO IN THE RIGHT MIND WANTS TO INVEST IF THE LAW CANNOT BE TRUSTED?
YES. JP & KR need US navy's business as existing business taken over by CN BUT they want to be paid in other currencies or GOLD, NOT the USD ! Has US any of such ? NO, so sorry then …. People are quitting USD & USD assets as otherwise when the USD crashes one will sustain a capital loss !@#$