US Navy chief's visit adds fuel to HD Hyundai-Hanwha shipbuilding rivalry

HD Hyundai Executive Vice Chairman Chung Ki-sun, center, showcases naval vessels under construction to U.S. Navy Secretary John Phelan, second from left, at HD Hyundai Heavy Industries' shipyard in Ulsan, Wednesday. Courtesy of HD Hyundai

Competition between the heirs of HD Hyundai and Hanwha heated up as U.S. Navy Secretary John Phelan visited the two conglomerates' shipyards in the southeast of Korea on Wednesday.

According to industry officials, HD Hyundai Executive Vice Chairman Chung Ki-sun and Hanwha Group Vice Chairman Kim Dong-kwan personally showcased their respective shipyards' capabilities during Phelan's visits to discuss cooperation in reviving his country's naval shipbuilding.

Last year, Chung also hosted then-U.S. Navy Secretary Carlos Del Toro at HD Hyundai Heavy Industries' shipyard in Ulsan. Kim reportedly rushed to Geoje Island, home to Hanwha Ocean's shipyard, after meeting Donald Trump Jr., the U.S. president's oldest son, earlier that day in Seoul.

The shipbuilding rivals are believed to have sought not only maintenance, repair and overhaul (MRO) contracts, but also new construction orders from one of their most important potential clients.

Hanwha Group Vice Chairman Kim Dong-kwan, third from left, briefs U.S. Navy Secretary John Phelan, fourth from left, on the maintenance of USNS Yukon at Hanwha Ocean's shipyard on Geoje Island, South Gyeongsang Province, Wednesday. Courtesy of Hanwha Ocean

Both companies have worked to expand their presence in the U.S. shipbuilding market, as the Donald Trump administration has sought partnerships with Korea and other allies to revitalize the country's shipbuilding sector and counter China's maritime expansion.

Hanwha has a track record of winning two U.S. MRO contracts for naval ships. It also owns the Philly Shipyard in Philadelphia. During his visit to Japan before arriving in Korea, Phelan reportedly encouraged Japanese officials to consider emulating Hanwha's acquisition of the Philadelphia shipyard.

HD Hyundai, on the other hand, has strengthened its partnership with Huntington Ingalls Industries, which operates a shipyard in Mississippi. Phelan has also shown interest in the companies' agreement to explore expanded production in both commercial and defense sectors.

Before his tour of the shipyards, Phelan met with acting President and Prime Minister Han Duck-soo in Seoul.

The Prime Minister's Office said Han referenced ongoing trade talks between the two countries as part of efforts to maintain the seven-decade-long alliance, and asked Phelan to help Korean shipbuilders contribute to the U.S. defense industry.

"The acting president touted Korea as the optimal partner to support the revival of the U.S. shipbuilding industry, expressing hope that the two countries will strengthen shipbuilding cooperation based on the trust built through a Korean company's successful MRO of U.S. naval vessels," Han's office said.

"The U.S. Navy secretary responded that he would make every effort to pursue shipbuilding cooperation with Korean companies in the future."

The Navy secretary also met with Korean Ambassador to the U.S. Cho Hyun-dong in Washington on April 23 (local time).

"Great discussion today with the Republic of Korea's Ambassador Cho Hyun-dong about our nations' ironclad alliance, cooperation on shipbuilding and strengthening our maritime relationship," Phelan said of the meeting.