Latest news with #shipbuilding
Japan Times
a day ago
- Business
- Japan Times
South Korea faces a triple challenge ahead of its election
Few countries have transformed themselves as dramatically as South Korea has over the last half-century. A poor, authoritarian country with annual per capita income of less than $400 has become a vibrant and prosperous democracy, with direct presidential elections, peaceful transfers of power and a per capita income of more than $33,000. But South Korea lately has been grappling with slowing economic momentum, rising political instability and an increasingly fragile security environment. Can the country transform itself again and meet these new challenges? Begin with the economy. After decades of rapid gross domestic product growth — averaging over 7% in the 1970s-1990s — the economy has slowed, growing by 2% to 3% in recent years. The growth rate is expected to fall further, to 1%, over the next decade. A key reason for this is demographic decline. With South Korea's fertility rate having dropped to just 0.75 — the world's lowest — its population is shrinking and aging fast. The country is set to cross the 'super-aged' threshold, with more than 20% of the population aged 65 and older, this year. Low productivity growth and high household debt are additional brakes on consumption and investment, increasing the risk of long-term stagnation, akin to Japan's 'lost decades.' It does not help that China is becoming increasingly competitive in sectors that South Korea once dominated, such as shipbuilding, steel, smartphones and, increasingly, semiconductors. More fundamentally, the export-driven model that fueled South Korea's past success is now vulnerable to protectionist trends and geoeconomic fragmentation. Domestic political volatility has risen as well. Corruption scandals and partisan gridlock persist and both Freedom House and the Economist Intelligence Unit have reported signs of democratic backsliding. Former President Yoon Suk Yeol's attempt to impose martial law for the first time since 1980 revealed that South Korea's democracy remains fragile, though the fierce backlash — including popular protests and a vote by the National Assembly to rescind the declaration — also highlighted the resilience of public support for democratic institutions. Mounting security risks further complicate the picture. North Korea, bolstered by deepening military ties with Russia and an enduring strategic alignment with China, has continued its regular provocations, including ballistic-missile tests. Meanwhile, South Korea is grappling with the question of how to approach the escalating geopolitical competition between China, with which the country maintains close economic ties, and the United States, an increasingly unreliable ally. U.S. President Donald Trump's past threats to scale back America's security commitments and cut deals with North Korea have revived calls within South Korea for an independent deterrent capability. Recent polls indicate that a growing share of South Koreans want their country to develop nuclear weapons. While the government remains committed to nonproliferation, the pressure for South Korea to ensure its own security is intensifying. Against this backdrop, South Korea will hold its next presidential election on Tuesday. Whoever wins — whether the progressive or conservative candidate — will have to confront head-on the intertwined challenges of boosting economic growth, implementing democratic reforms and providing strategic clarity. On the economy, a top priority must be shifting from export-led to innovation-led growth. This will require major investments in research and development, as well as support for startups in frontier industries such as AI, biotechnology, green energy and digital health care. It will also require continued industrial policies in key sectors (especially semiconductors, electric vehicles and batteries), together with regulatory streamlining. Revitalizing the underperforming service sector — especially through structural reform and digitalization — can unlock potential growth and help reduce inequality. Labor-market reform is also essential. Policymakers must tackle two features of South Korea's labor market that are undermining productivity and inclusion: its dual structure ('regular' workers enjoy more job security, better benefits and higher wages than their 'nonregular' counterparts) and its focus on seniority, rather than performance, in determining wages. To help offset demographic decline, policies aimed at boosting female labor-force participation, attracting skilled immigrants and retaining older workers are also needed. For example, the government could promote lifelong education and more flexible work arrangements. As for democratic reforms, South Korea's next president should focus on measures to strengthen the National Assembly's legislative capacity, uphold judicial independence and foster a civil society and media culture resilient to polarization and disinformation. The next administration might even consider pursuing constitutional reform, to allow presidents to serve up to two four-year terms (rather than one five-year term). Above all, the winner must demonstrate a commitment to restraint, institutional integrity and inclusive governance, especially by rejecting winner-takes-all politics and engaging constructively with the opposition. Finally, to strengthen South Korea's security posture, the next administration should reiterate its commitment to the alliance with the U.S., while seeking stronger security guarantees — possibly including deployment of nuclear weapons. It should maintain and deepen trilateral security cooperation with the U.S. and Japan, particularly on missile defense and intelligence. At the same time, South Korea should pursue greater strategic autonomy. While it must uphold all alliance commitments vis-a-vis China, it should limit participation in anti-China initiatives and maintain an open economic dialogue with the People's Republic. As for North Korea, any engagement should hinge on a credible, fundamental change in the regime's behavior. South Korea has shown a remarkable capacity for renewal in the past. With wise, unifying leadership that delivers a forward-looking vision that addresses economic vulnerabilities, bridges political divides and strengthens national security, this time will be no different. Lee Jong-Wha, professor of economics at Korea University, is a former chief economist at the Asian Development Bank and a former senior adviser for international economic affairs to the president of South Korea.
Zawya
2 days ago
- Business
- Zawya
MSC Cruises signs orders for two new world class ships to be built in France by Chantiers de l'Atlantique
Dubai, United Arab Emirates – MSC Cruises today signed two new orders for their globally successful World Class ships. The order with French ship builder Chantiers de l'Atlantique, will see the total number of World Class ships in the MSC Cruises fleet expand to six. The two new ordered vessels – currently referred to as World Class 5 and 6 – will be delivered in 2029 and 2030 respectively and demonstrates the Company's ongoing commitment to France and European shipbuilding. Pierfrancesco Vago, Executive Chairman, MSC Cruises, said, 'The confirmation of the orders for the two new World Class ships marks a new milestone in our remarkable journey of shipbuilding in France and the continuation of our long-term industrial plan. This milestone underscores our commitment to building some of the highest performing ships in the world, creating a legacy of excellence and innovation in collaboration with the Chantiers de l'Atlantique – our long-term partners of more than 20 years. The highly successful World Class platform combines the very best in environmental technology with the latest advancements in guest experiences.' Laurent Castaing, General Manager, Chantiers de l'Atlantique added, " We thank MSC Cruises for their continued trust. It is the synergy of our two companies' expertise that has led to the creation of this high-potential World Class series, meeting the challenges both in terms of passenger experience and environmental performance. World Class V and VI mark a milestone in the history of the cruise industry, with the best energy efficiency.' The new ships will join MSC World Europa and MSC World America along with MSC World Asia and MSC World Atlantic, which are currently under construction and will enter service in 2026 and 2027 respectively. The World Class ships are already the most energy efficient ships in service, significantly outperforming the International Maritime Organization (IMO) Energy Efficiency Design Index (EEDI) and the new vessels will continue to uphold the high energy efficiency standards set by their sister ships. All World Class ships are ready for a variety of alternative fuels including bio and synthetic LNG. Additionally, they will feature a new configuration of the latest generation dual fuel internal combustion engines, which feature new technology to further reduce methane slip. The new vessels will feature shore power plug-in connectivity to reduce carbon emissions in port, the most advanced wastewater treatment systems designed in line with the IMO, new advances in waste management, and a comprehensive range of onboard energy efficient equipment to optimise engine use and hotel energy needs to further reduce emissions. As with the other World Class ships, the new vessels will seamlessly blend MSC Cruises' signature elegant European design with comfort to offer an unparalleled guest experience centred around a districts concept with facilities, and experiences tailored to the needs of different types of traveller. Each new ship MSC Cruises builds offers something new and distinctive and World 5 and 6 will be no different. The two new orders will be subject to access to financing, as per industry practice. NOTES MSC Cruises' first LNG ship, MSC World Europa was launched in November 2022 and the latest ship in this class, MSC World America entered service in April 2025 and is operating in the North American cruise market. There are currently two vessels under construction at the Chantiers de l'Atlantique shipyard in Saint-Nazaire in France, MSC World Asia and MSC World Atlantic. These ships will be delivered in 2026 and 2027 respectively. All World Class ships feature dual engines and as bio and synthetic fuels become available at scale, emissions from MSC Cruises' World Class vessels will be further reduced. LNG is key to the development of low carbon solutions for shipping as emerging technologies such as fuel cells can be operated with LNG until zero emissions bio and synthetic LNG become available at scale. MSC Cruises and Chantiers de l'Atlantique are actively involved in several projects to develop and make these technologies viable in partnership with regulators, academia, and industry. About MSC Cruises Headquartered in Geneva, Switzerland, the privately-owned MSC Cruises is the world's third largest cruise line and the market leader in Europe with a strong and growing presence in North America. A global cruise brand with 23 modern ships offering cruises across five continents, guests can visit more than 100 countries worldwide with more than 300 destinations, making unforgettable memories and enjoying the finest hospitality. About Chantiers De L'Atlantique Thanks to the expertise of its teams and its network of subcontractors, combined with top industrial technology, Chantiers de l'Atlantique is a key leader in the design, integration, testing and precise delivery of cruise ships, naval vessels, electrical substations for offshore wind farms and fleet services. The company is a pioneer in the challenges of tomorrow. Thanks to its research and development, Chantiers de l'Atlantique offers ships with the highest environmental performance, as well as equipment for offshore wind farms, making it a major player in global energy transition. For further information, please contact: Ghida Abou Zaki | Elise Nacouzi Belarabi Group ghida@ | elise@
Japan Times
3 days ago
- Business
- Japan Times
Japan offering fund to aid U.S. shipbuilding as part of tariff negotiations
Japan has offered to establish a fund to help revive the U.S. shipbuilding industry as part of tariff negotiations between the two countries, it was learned Wednesday. The administration of U.S. President Donald Trump aims to strengthen his country's shipbuilding capacity from an economic security perspective, and Tokyo hopes that offering cooperation in this field will lead to concessions from Washington in tariff talks. On Wednesday, the steering committee of the House of Councilors approved a four-day trip to the United States from Thursday by economic revitalization minister Ryosei Akazawa, Japan's chief tariff negotiator. During the trip, Akazawa will hold the fourth ministerial-level session of the tariff talks on Friday local time. The session is expected to be attended by U.S. Treasury Secretary Scott Bessent, who was absent from the previous session. The committee also approved Akazawa's three-day trip to France from Tuesday to attend a meeting of the Organization for Economic Cooperation and Development. Akazawa voiced his eagerness to advance the tariff negotiations with the United States, even during the trip to France. "If we have an opportunity to engage in tariff discussions with the United States, we will prioritize that above all else," he told reporters at the Prime Minister's Office. In the global shipbuilding market, China holds a dominant share. That has sparked national security concerns in the United States, where the shipbuilding industry has declined. The United States has called on allies including Japan to help revive the sector. "The United States is interested in whether U.S. warships can be repaired in Japan," Prime Minister Shigeru Ishiba told reporters in Maizuru, Kyoto Prefecture, on Sunday. Referring to the growing importance of Arctic shipping routes and icebreakers, Ishiba also noted that "Japan has an advantage in icebreaker technology." Also on the agenda for the upcoming tariff session is Japan's support for maintaining repair docks in the United States. Tokyo hopes to accelerate the tariff talks, with a view to striking an agreement at a possible bilateral summit on the sidelines of the Group of Seven leaders' meeting next month. As the two countries are still divided over matters such as additional auto tariffs, it remains to be seen how much middle ground the two sides can find on shipbuilding cooperation.
Times
3 days ago
- Business
- Times
Why Navantia rescued Harland & Wolff — and what it expects in return
They have a saying in Spain, says the new boss of Harland & Wolff, which translates literally as 'when you are hungry, then eat'. More figuratively, you might say 'needs must'. Donato Martinez, the newly-appointed chief executive of the newly-created UK end of Navantia, the state-owned Spanish shipbuilder, is explaining why it acquired Harland & Wolff out of administration. It was the second time the Belfast shipyard had gone bust in five years, capping a chequered history all the way back to Victorian times. The British government was in want of the three 216-metre long supply ships that it had ordered from the yard to service the aircraft carrier flagships of the Royal Navy. Navantia, already part of that contract, did not want to turn its back on a lucrative opportunity for that and future orders for Royal Navy or Border Force vessels. Yet the £93 million takeover resonates more than just political and industrial expediency. On the one hand the historic Harland & Wolff yard, home of the Titanic, has been saved and is arguably on its surest footing in decades. On the other hand, it means for the first time in the history of the Royal Navy, vessels will be built by a foreign military power. Sir Francis Drake for one must be spinning in his watery grave. The immediate goal is to get the three vessels — fleet solid support (FSS) ships in the naval argot, charged with delivering munitions, stores and provisions on the high seas — back on track. Despite a year lost to the spiral into bankruptcy of InfraStrata, the stockmarket-listed previous owner, Martinez speaking at a Navy Leaders conference in Farnborough, says the newly-created Navantia UK can deliver all three vessels to the planned 2032 timeline. Once a final critical design review is signed off this autumn, Belfast could be in production by the end of the year. The original order with InfraStrata and Navantia was controversial because of the implied amount of Spanish content, that is only 60 per cent by value of the vessels would be made in the UK. Martinez says the commitment to UK content remains but will depend on how things go: 'The key priority is meeting the delivery date.' • Ministers accused of 'backdoor bailout' for Harland &Wolff Details of 'revised terms' with Navantia on which ministers came to in the deal to sell Harland & Wolff have not been disclosed. The programme is now expected to come in at £2 billion, compared to the £1.6 billion previously quoted. Navantia says that is because of inflation on a programme priced in pre-pandemic times. Navantia has committed to spend £115 million on its acquisition which also comes with the Appledore yard in North Devon, and the offshore wind and oil and gas yards of Methil on the Firth of Forth and Arnish on the Isle of Lewis in the Hebrides. Harland & Wolff needs to be redesigned, new panel fabrication lines and workshops installed. Safety, environmental, maintenance, welfare and training facilities need upgrading. 'That has not been looked at for some years, for some decades in some cases,' said Martinez. 'We need to do this to build confidence and to be able to win more contracts.' Harland & Wolff will remain a ship repair and maintenance yard for the likes of Stena, the shipping line. But as a construction yard it will now only be naval, no longer chasing commercial vessel contracts in competition with China and Korea. The job is now to ramp up for the three FSS ships and win future work. 'As the phoenix rises from the ashes we need to hire. We currently have 600 people in Belfast including 170 apprentices. For FSS we will need 800 people next year and by 2029-30 [at the height of the programme] we will need 1,500.' By the early 2030s, the business across all the yards will be aiming to employ 2,000 people. Navantia UK has its eyes on the next major Ministry of Defence contract for up to six multi-role strike and support ships — vessels to rapidly deploy Royal Marine commandos and other special forces. 'We would hope to have a major role,' said Martinez of a contract whose cost is as yet unspecified but is expected to produce work for ten years. Navantia UK is also keen to develop Appledore with a capability for offshore patrol vehicles for the likes of the UK Border Force and uncrewed surface drone vessels of the future. The Royal Navy also has a requirement for floating dry docks for submarines and warships and Navantia believes Methil and Arnish have the fabrication and welding capabilities for those. The arrival of Navantia UK at Harland & Wolff creates a Big Three naval construction capability alongside BAE Systems building Type 26 warships on the Clyde and the nuclear submarines at Barrow and Babcock building Type 31 at Rosyth near Edinburgh. 'The pipeline is such that there is room for three of us,' said Martinez. 'Everybody will be busy.'
New York Times
4 days ago
- Business
- New York Times
U.S. Ships Championed by Trump Cost 5 Times as Much as Asian Ones
President Trump and some members of Congress want to revive a depleted American shipbuilding industry to compete with China, the world's biggest maker of ships by far. It is such a daunting goal that some shipping experts say it is destined to fail. More hopeful analysts and industry executives say the Trump administration and Congress could succeed but only if they are willing to spend billions of dollars over many years. One of the places where Washington's maritime dreams might take shape or fall apart is a shipyard on the southern edge of Philadelphia that was bought last year by one of the world's largest shipbuilding companies, a South Korean conglomerate known as Hanwha. 'The shipbuilding industry in America is ready to step up,' David Kim, the chief executive of Hanwha Philly Shipyard, said in an interview. But to do that, he said, the yard must have a steady stream of orders for new vessels. And the federal government will need policies that subsidize American-built ships and penalize the use of foreign vessels by shipping companies that call on U.S. ports. Last month, Mr. Trump issued an executive order aimed at revitalizing American shipbuilding. 'We're going to be spending a lot of money on shipbuilding,' he said when announcing the order. 'We're way, way, way behind.' The Office of the United States Trade Representative set new rules in April that penalize Chinese ships and require that certain commercial vessels be built in the United States. In Congress, lawmakers from both parties are pushing a sprawling bill that contains significant subsidies to bolster American shipbuilding. But there is much to overcome. The Philadelphia yard won't have space for new orders until 2027, and other American shipyards are so tied up with filling orders for the Navy that they don't have the capacity to produce commercial vessels. It takes far longer to build ships in the United States than in Asia, and costs nearly five times as much. The Philadelphia yard makes roughly a ship and a half a year, compared with around a ship a week at Hanwha's larger facilities in its home country, Mr. Kim said. But the company would bring methods, like automated welding, he added, to speed up production at the roughly 115-acre yard in Philadelphia. Mr. Kim declined to say how much the company intended to invest in its U.S. shipyard, which it bought for $100 million. Colin Grabow, an associate director at the Cato Institute, a research organization that favors fewer government regulations of business and the economy, said the shipbuilding push gave him an uneasy sense of déjà vu. Previous government efforts to encourage domestic shipbuilding largely failed, including an effort to produce more commercial vessels in Philadelphia after the closing of the naval base in the city in 1995. 'We've been down this road before,' Mr. Grabow said. In addition to China, ships that transport goods to or from the United States are built in Japan, South Korea and other friendly countries. These vessels are typically owned and operated by global shipping companies, many of them based in Europe and Asia. But as Chinese commercial vessel production soared in recent years, lawmakers in Washington became concerned that China was gaining a nearly unassailable strategic advantage. 'It's just become a stampede,' said Michael Roberts, a senior fellow at the Hudson Institute, a conservative research group that favors government backing for American shipbuilding. In the last 10 years, Chinese shipbuilders delivered 6,765 commercial ships, nearly half of global deliveries, according to data from BRS Shipbrokers. Japan delivered 3,130, South Korea 2,405 and the United States just 37. The few American-made vessels that shipping lines do buy usually transport cargo solely between American ports. Under the Jones Act, a more-than-100-year-old law, such voyages can be served only by U.S.-built vessels. An order for three Jones Act-compliant container ships, struck by the previous owner of the Philadelphia shipyard, cost around $330 million a vessel. A similar size ship built in Asia would cost about $70 million, said James Lightbourn, founder of Cavalier Shipping, a ship financing advisory firm. In their shipbuilding bill, Democratic and Republican lawmakers seek to address the cost difference by subsidizing shipping companies to put 250 American-made vessels operated with American crews into a 'strategic commercial fleet.' The secretary of defense could call on the vessels for supply missions. Lawmakers hope that assembling such a fleet and other incentives will not only provide a steady stream of orders for American shipbuilders, but also help them grow and become more efficient. Senator Mark Kelly, a Democrat of Arizona and a sponsor of the legislation, described it as 'the most ambitious effort in a generation to revitalize the U.S. shipbuilding and commercial maritime industries, and counter China's dominance over the ocean.' Critics of the bill contend that it would provide endless subsidies to high-cost shipbuilders. A better approach to countering China's dominance, they say, would be to make up the strategic fleet with vessels made in Japan and South Korea, both U.S. allies and proven shipbuilders. But Mr. Kim, the Hanwha executive, said many products, not just ships, cost more to make in the United States, and he added that outsourcing shipbuilding to other countries had contributed to the withering of American production. 'It's not just about business,' he said. 'It's about the country, it's about labor, and it's about priorities and strategic decisions.' Washington's grand designs for shipping include the tankers that carry liquefied natural gas, which are much more complex to manufacture than ships that carry containers. The Trump administration's new shipping rules require that an increasing portion of these ships be built in the United States within several years. Hanwha has produced 200 such vessels in South Korea, and Mr. Kim said the dry docks at the Philadelphia yard were big enough to accommodate certain L.N.G. carriers. But even if Hanwha successfully transfers its manufacturing expertise to the United States, it may struggle to find skilled workers. It is planning to double the size of its work force from 1,500 employees in less than 10 years, Kelly Whitaker, a spokeswoman for Hanwha Philly, said. Next year it wants to double the size of its apprentice class to 240 trainees. Niecey Zlomek, who moved to Philadelphia from Baltimore eight years ago, joined Hanwha Philly as an apprentice in January and is earning $22 an hour. 'This is probably the best job I've had since I've lived here,' she said. Ms. Zlomek has so far worked on three vessels, helping to install a bow thruster, a type of propulsion system, and a conveyance system for large rocks. Even when shipbuilders do manage to recruit workers, they have often struggle to keep them. Shipyards building naval vessels lose many of their first-year employees, Brett Seidle, an acting assistant secretary of the Navy, said at a congressional hearing in March. The Trump administration and lawmakers favor policies aimed at training many more mariners to work on American-built vessels. The shipping bill would subsidize the cost of using more expensive U.S. crews. Roland Rexha, secretary-treasurer of the Marine Engineers' Beneficial Association, a union for American maritime officers, said such policies were necessary. 'As China subsidizes their industry completely,' he said, 'we have to find a way to make incentivizing cargo a centerpiece to maritime revitalization.' Mr. Rexha said being an officer on an American vessel serving international routes could be a lucrative, satisfying career. Officers make over $200,000 a year and can retire with a pension after 20 years. Though mariners are away for three months at a time, he said, they are at home for three-month spells. 'You are focused on your family. You are focused on your children.'
