[Interview] The US desperately needs warships — can Korea help fill the demand?

Eric Labs, senior analyst for naval forces and weapons at the US Congressional Budget Office, speaks to the Hankyoreh on March 19, 2025 (local time). (Kim Won-chul/Hankyoreh)

US naval shipbuilding is in the “worst condition” it’s been in in nearly three decades. 

That’s the assessment offered by Eric Labs, a senior analyst for naval forces and weapons at the US Congressional Budget Office and the US’ foremost naval expert, during an interview with the Hankyoreh on Wednesday, March 19. 

Labs said one potential solution was for Korea to invest in the American shipbuilding industry, with the caveat that there is only a limited role for Korean domestic operations.

Under US law, US combat ships cannot be built or repaired in Korea. Overseas repairs are only allowed for support ships, which only make up a fraction of the US Navy. Even then, there’s still opposition from members of Congress.

It was Labs who remarked that the Navy would need to spend US$1 trillion over the next three decades building new ships in a January report analyzing the US Navy’s 2025 shipbuilding plan.

Living witness of US naval history says wages should be raised to retain talent
 
Hankyoreh: I understand you’ve spent about 30 years focusing on the Navy.
Eric Labs: The CBO hired me 30 years ago, actually to do a job related to international affairs. But then about two years later, I took over the Navy shipbuilding portfolio when our ship-building analyst at that time left for a different job. So I’ve been doing this job ever since. I’ve certainly been doing it a long time, and have learned a lot and remember a lot too. We help provide Congress with a lot of institutional and historical knowledge, because of their staff turnover. We know the whole history.

Hankyoreh: What’s your main job?
Labs: The Navy, in most years, puts out a shipbuilding plan, which is sort of their agenda for how they want to build a larger fleet. That’s a requirement the Congress imposed upon the Navy, that they produce such a report each year. They also have a requirement that CBO produce an independent analysis of that ship-building plan, an independent assessment of the effects on the force structure, and especially an independent assessment of what the cost of that ship-building plan might be. That leads me into looking over a lot of aspects of the Navy budget and doing analysis related to that.

Hankyoreh: Given your 28 years of experience analyzing the US Navy, do you think the Navy is facing a crisis?
Labs: Yes, it is. It’s really in the worst condition I’ve ever seen. The Navy is having a difficult time building ships, crewing ships, maintaining ships, and operating ships, which is pretty much everything the Navy is supposed to do.

Hankyoreh: What’s the reason for these challenges?
Labs: They want to build even more than what we’re having problems building right now. If we’re already having difficulty in building the amount of tonnage the industry can produce now, increasing that amount in the future is going to just make those challenges, in my view, greater.

Hankyoreh: Why does the Navy want more ships?
Labs: The issue is that China is rapidly increasing its fleet. China’s already got a fleet of around 400 ships today. And the projections would have them going further over the next decade and a half.

Hankyoreh: Is there a big difference in the two countries’ shipbuilding capabilities?
Labs: I believe the United States, over the past 10 years, delivered somewhere in the neighborhood of 67 new warships. Whereas the equivalent number for China was more in the 130-240 range. They were delivering more than twice that number.

 
The central issue in the US shipbuilding industry is that naval ships are gradually taking longer to build. It currently takes 11 years for the US to build one aircraft carrier and nine years to make a destroyer or a nuclear-powered attack submarine. The turnaround time has gotten steadily longer over the past 15 years. During World War II, an aircraft carrier could be built in a year and a submarine in a matter of months.

 
Hankyoreh: What do you see as the fundamental issue here?
Labs: The biggest problem, in my view, is the high attrition rate for skilled workers. They’re experiencing 30% attrition for welders, ship fitters and pipe fitters, which are the most critical trades for building a ship. We need to reduce those attrition rates. By reducing those rates and getting workers to stay for years, they’ll get much better at their job, and the number of labor hours required to build a ship will come down. As I said, 15 years ago, we built destroyers in five years, and now we’re taking nine. We need to get back to at least five.

Hankyoreh: It sounds like that could be fixed by investing more money into raising wages.
Labs: They have started to increase wages in the yards, but I believe they need to raise their wages much more. The gap between, say, the retail sector and entry-level workers now is still only a few dollars. The government and the industry kind of agree that wages need to go up, although they don’t necessarily agree on how much or how to best do that. For example, the contracts for ships that are currently under construction are built on these lower wages. So those contracts needed to be opened up and renegotiated, but that’s very complicated.
 

The US push for domestic investment doesn’t mean more contracts for Korean shipbuilders
 
Cooperation between the Korean and American shipbuilding industries can be categorized into construction and repairs. The US Navy wants cooperation with Korea in both areas. But there’s a disconnect between the US’ focus on domestic investment and the Korean focus on more contracts for its shipyards. US law will have to be revised before more US naval vessels can be built and repaired in Korea.

The USS Carl Vinson docks in Busan in November 2023. (courtesy of the ROK Navy)

 
Hankyoreh: I would presume that repairs are an easier area for cooperation than construction.
Eric Labs: Under current law, combat ships in the US Navy cannot be repaired at overseas shipyards. Only support ships without a home harbor can be repaired overseas. [Note: Combat ships account for 70% of Navy ships.] The ships that were recently repaired by Hanwha Ocean were support ships. While that kind of cooperation is permissible, there are several concerns. In contrast with shipbuilding, the repair industry in the United States does have the capacity to handle most of the Navy’s work. Members of Congress don’t necessarily want that work going overseas, if it can be done in US yards, by US workers. So while the Navy wants to arrange overseas repairs to increase the operational efficiency of support ships, the mood in Congress is rather different. I’ve got a colleague who’s working on a report on this.

Hankyoreh: If Korea wants to build military ships, will that require a change in US law?
Labs: There are actually provisions in two different places in US law where the Congress says we cannot buy ships from foreign shipyards. That shows up in the National Defense Authorization Act. But it also shows up every year in the appropriations law. It is a longstanding view of the US Congress that if you’re going to build an American warship, it needs to be built in an American yard. 

Hankyoreh: Could those sort of restrictions be circumvented by an executive order?
Labs: That is not something that could be done by an executive order. The laws are very explicit that you cannot use money for that purpose. That’s why it’s both in the authorization law and the appropriation law. Building a new ship or a new class of ships in a foreign yard would require explicit legislation and acts of Congress. 
(Note: While US law includes a provision allowing the president to authorize exceptions to the prohibition of the construction of warships at foreign shipyards in the interest of national security, because the laws concerning appropriations and authorization that determine how funds are actually used prohibit this, it would require congressional approval.)

Hankyoreh: The representative from Guam has called for investment in Guam, drawing attention to its numerous facilities for repairing ships. What if Korean companies invest in Guam? It’s very close to Korea, and it’d be easy to bring skilled workers from Korea. Plus, it’s US territory.
Labs: I’m not a lawyer here, but I would think that because it is a US territory, it would meet the requirements of the law. That’s my impression. But, and I don’t know if this is a law or whether this is just federal regulation, all of the workers in the shipyards that build naval ships in the United States must be US citizens. You have Guamanians there, but I don’t know there would be enough [of a labor force] there. 

Hankyoreh: So for now, you would say the US’ No. 1 priority is strengthening its domestic shipbuilding capacity?
Labs: Yes. You could invest in those shipyards. But whether the United States government chooses to go down the path of buying ships in foreign shipyards or not is something that remains to be seen.

By Kim Won-chul, Washington correspondent

Please direct questions or comments to [english@hani.co.kr]