[Why the US Chose "MASGA"] (Part 2) Exploring the Dispatch of Retired Senior Technicians and Famous Artisans to the US ... The South Korean Government and National Assembly Initiate a "Race for Policy and Legislation Process"

Lee Young-jun, Vice Chairman of Hyundai, and US Navy Secretary Del Toro, visiting the modern heavy industry's special shipyard, introducing the ship under construction.

The South Korean-US tariff negotiations reached an agreement on the 31st, and on the same day, the South Korean National Assembly proposed the "MASGA Support Act (South Korea-US Shipbuilding Strategic Cooperation Act)." This bill, initiated by common people's party members such as Lee Yeon-joo, includes establishing a South Korea-US shipbuilding cooperation fund and designating special areas specifically responsible for the production and maintenance of military ships. The three major South Korean shipbuilding companies, HD Hyundai Marine, Hanwha Ocean, and Samsung Heavy Industries, decided to discuss specific cooperation plans at the level of the South Korea-US shipbuilding cooperation special task force (TF). The shipbuilding industry also plans to submit joint opinions on a $150 billion (approximately 209 trillion won) shipbuilding fund. The Ministry of Planning and Budget and the Ministry of Trade, Industry and Energy have also started specific work, discussing investment plans for the shipbuilding fund with various scenarios in mind. The South Korean government is also considering dispatching retired senior technicians and famous craftsmen from South Korea to the United States to address the shortage of skilled welders and other manpower, as well as to develop shipbuilding talent.

A government-civil society "race for speed" has begun for the project aimed at "making American shipbuilding great again (MASGA: Make American Shipbuilding Great Again)". This project will become an unprecedented overseas expansion venture in the history of South Korean manufacturing. In response to President Donald Trump's request to quickly advance domestic shipbuilding in the US, discussions were rapidly held on government-civil cooperation and support.

Production efficiency increased five times, costs halved... US ministers were amazed by the K shipyard

This unprecedented project in the history of the shipbuilding industry actually began during the Joe Biden administration.

In February last year, during the Biden administration, the then US Navy Secretary Carlos Del Toro visited HD Hyundai Heavy Industries (Ulsan) and Hanwha Ocean (Geoje) shipyards. He said, "This is the first time I've seen such a digital shipbuilding system. I was amazed by the technical strength of South Korea in real-time monitoring of production processes.".

The olive branch extended by the South Korean shipbuilding industry became even more enthusiastic after the change of power from the Democratic Party to the Republican Party in the US. When President Donald Trump, as a candidate, called then South Korean President Yoon Suk-yeol in November last year, he requested, "The US shipbuilding industry needs help from South Korea." After the second term government of Trump took office, key officials of the US government and high-ranking military officials visited South Korea. In April this year, current Navy Secretary John F. Richardson visited a South Korean shipyard as a Trump government official, saying, "If the South Korean shipyards with excellent capabilities cooperate with the US Navy, US ships will perform at their best. I will share this experience with President Trump." On the evening of the 30th, he visited the Hanwha Philadelphia Shipyard in Philadelphia, USA, together with the Director of the Office of Management and Budget, Russell Vought. Soon after their visit, Trump announced the conclusion of the South Korea-US tariff agreement.

US Navy officials said they were very surprised by the South Korean shipyards' ability to accurately propose delivery dates from the stage of ship contracts and have systems for real-time monitoring of construction progress. This is a matter of course in South Korean shipyards, but it is unimaginable in the US shipbuilding industry where the ecosystem has collapsed. Production efficiency cannot be compared. In the past 10 years, South Korean shipyards have built 2,405 commercial ships, while the US only built 37. It costs about 600 million dollars to build an Aegis ship in South Korea, while it costs 1.6 billion dollars in the US. South Korea can build commercial ships, Aegis ships, and submarines in one shipyard, while each shipyard in the US struggles to build even one ship per year.

Biden and Trump's SOS

During this tariff negotiation, the South Korean negotiation team was able to propose the "MASGA" project, which was based on the high-density communication that had been ongoing before Trump took office. Personnel in the Ministry of Trade, Industry and Energy who had been designing cooperation plans even named the project "MASGA" and submitted it to the negotiation team. On March 3rd, Kim Yong-bum, the head of the presidential policy office, appeared on KBS's "Sunday Diagnosis," and stated, "In fact, without shipbuilding, the negotiations would have gone parallel. We even specifically discussed repair and maintenance and talent development projects. They were surprised by our comprehensive research, so we concluded the shipbuilding project."

The US has two main reasons for urgently expecting MASGA, namely, "restoring the competitiveness of the US commercial shipbuilding industry" and "strengthening the US Navy's maintenance, repair, and overhaul (MRO) capabilities." This is hoping to revitalize the shipbuilding capabilities and maritime human resources that have been neglected for decades, meeting the maintenance and repair needs of the US Navy due to the faster retirement than construction speed.

South Korean shipbuilding industry once expanded overseas in the 2000s, operating local shipyards. However, MASGA is "unparalleled" in terms of difficulty. It must build or upgrade local shipyards, cultivate talent, and even transplant equipment supply chains. This is equivalent to doing everything from A to Z.

After Hanwha took over the Philadelphia Shipyard and established a base, it is expected to take a long time to achieve competitive levels of production locally. There is no local ship component and equipment supply chain, nor are there skilled workers. Therefore, they plan to use mid-sized shipyards with low utilization rates in Gunsan and Geoje to prioritize the maintenance and upkeep of US Navy ships, and gradually transplant the South Korean shipbuilding industry's ecosystem to the US. The shipbuilding industry is also discussing a "modular" cooperation system, i.e., manufacturing US commercial and military ships in multiple modules in South Korean shipyards, then transporting them by sea to the US, and conducting final assembly at local US shipyards. This is also the method mentioned by personnel of the Congressional Research Service (CRS) during a House hearing in March last year.

The biggest obstacle to this idea is the long-standing US domestic shipbuilding protection laws that have lasted for several decades, even up to 100 years. Among them, the Jones Act of 1920 is the most representative. This law stipulates that all vessels used for domestic transportation in the US must be built in the US and must be owned and operated by Americans. The Burns-Jones Amendment of the 1960s prohibits the construction of American ships and their main components overseas. US Navy ships are strictly limited to being built and maintained in US shipyards.

The US Congress has proposed bills to repeal these restrictions. In June last year, Republican Senator Mike Lee and Representative Tom McClintock separately introduced the "Open America’s Waters Act." The content of this bill is to repeal the Jones Act to ease the maritime transport restrictions in the coastal waters of the US.

Transferring South Korean technological capabilities to the US becomes crucial

No matter whether the restrictions are relaxed or not, the South Korean shipbuilding industry is building various forms of cooperation frameworks. Hanwha Group has even established a shipping company (Hanwha Shipping) locally, aiming to target the US LNG transportation by building LNG carriers at the Philadelphia Shipyard. HD Hyundai is advancing joint construction with the largest US naval shipbuilder Huntington Ingalls Industries and commercial shipbuilder ECO. Both sides are sending engineers to improve the process efficiency in the US. HD Hyundai will also cooperate with US AI defense companies Palantir and Anduril for a long time to develop unmanned ships.

A shipbuilding industry source said, "South Korea must be the main player in the entire process from planning to technology transfer and operations, not just a subcontractor, so this will become an unprecedented cooperation model."

Sources: Chosun Ilbo

Original: https://www.toutiao.com/article/7534676513342358067/

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