*

Talking to multiple companies on possible buying US

shipyard,

executive says

*

Company targets $2.2 billion in annual revenue from

warship

sales to US Navy by 2035

*

Sees lack of skilled labour, visa issues in the US as

challenges

By Heejin Kim

ULSAN, South Korea, Sept 18 (Reuters) - South Korea's HD

Hyundai Heavy Industries is in talks with multiple companies

about buying a U.S. shipyard, a senior company executive said,

seeking to tap into President Donald Trump's push to revive

America's ailing shipbuilding industry.

The world's largest shipbuilder based on orders is targeting

3 trillion won ($2.2 billion) in annual revenue by 2035 from

building warships for the U.S. Navy, said Woo-maan Jeong, head

of planning and management for HD Hyundai's naval

and special ship unit, in an interview at its Ulsan

headquarters.

"It seems to be clear that we need to build a manufacturing

base in the U.S. sometime in the future," Jeong said on

Wednesday, declining to name any companies involved in the talks

or to give the scale of any potential investment.

"The U.S. is apparently facing a situation that pushes it to

inevitably open the shipbuilding market," said Jeong, given the

widening gap in naval capabilities between the United States and

China and the lack of sufficient U.S. capacity for building

warships.

The U.S. "will have to utilise the infrastructure and

capacities built already by its allies to overcome a short-term

ship shortage."

U.S. shipyards, which had the world's highest production

capacity during World War Two, had a global market share of just

0.04% in 2024, according to U.N. Trade and Development data.

China and South Korea are now responsible for 83% of global

commercial shipbuilding, the data also shows.

Shipbuilders still operating in the U.S. include Philly

Shipyard, bought in 2024 by Korean shipbuilder Hanwha Ocean

, and a full-service shipyard run by General Dynamics ( GD )

on the West Coast. Huntington Ingalls Industries ( HII )

is also building ships as a large supplier for U.S. Navy.

South Korea pledged in July to invest $150 billion in U.S.

shipbuilding, as part of $350 billion in investment funds that

Seoul agreed to put into U.S. projects as part of negotiations

over lower tariffs.

In late August, HD Hyundai also announced a merger with

affiliate HD Hyundai Mipo to utilise Mipo's yards to

expand its warship business and help lead U.S.-Korea

shipbuilding projects.

Jeong said challenges to building ships in the United States

include a shortage of skilled workers.

"Another issue is retention. Many U.S. shipyard workers quit

within a year," he said.

It could take between three and five years for Hyundai to

train U.S. workers to boost productivity, Jeong said, citing the

company's experience in setting up a shipyard in Peru.

Another obstacle could be U.S. immigration policy, he said,

as he called for better visa policies for Korean trainers, after

the recent arrest of hundreds of Korean workers at Hyundai

Motor's ( HYMLF ) battery plant in the state of Georgia.

US LAWS RESTRICT FOREIGN SHIPBUILDERS

HD Hyundai Heavy christened on Wednesday in its Ulsan yard

an 8,200-metric ton, Aegis-equipped destroyer to be delivered to

the South Korean Navy by end-2026.

The company touted the ship, built in just 18 months, as a

"symbol of U.S.-Korea cooperation" since its combat system uses

technology supplied by U.S. companies such as Lockheed Martin ( LMT )

.

The company can build such warships in less than two-thirds

of the time required by U.S. peers, Jeong said.

U.S. laws restricting foreign firms from building ships are

among the other challenges.

The U.S. Merchant Marine Act of 1920, better known as the

Jones Act, restricts domestic shipping to vessels that are

U.S.-built and U.S.-flagged, while the Byrnes-Tollefson

Amendment prohibits foreign shipyards from constructing naval

vessels.

Jeong said the U.S. Congress is considering amendments to

those acts to help foreign companies build ships for the U.S.,

although it's unlikely the century-old laws would be scrapped

entirely.

Still, despite the challenges, there is no other market for

warships as attractive as the U.S., he said.

But, "the undeniable reality is that if you want to do

business with the U.S., you need to do it in the U.S.," Jeong

said.