Rebuilding American Shipbuilding Through Allied Investment

Allied investment, stable ship designs, workforce development, and a stronger maritime supply chain can help expand American shipbuilding capacity and deliver mission-ready vessels faster.

Credit: U.S. Navy photo by Chris Oxley, courtesy of Newport News Shipbuilding

The United States needs more ships, but the American shipbuilding industry cannot currently build, repair, and sustain them at the rate national security demands.

Years of inconsistent orders, aging infrastructure, workforce shortages, supplier constraints, design changes, and cost growth have weakened the U.S. maritime industrial base. These challenges affect more than the Navy’s ability to expand its fleet. They also affect military readiness, commercial shipping, supply chain security, and America’s ability to respond to growing competition from China.

President Trump’s new National Security Presidential Memorandum on rebuilding the Navy and America’s shipbuilding industrial base recognizes the scale of the problem. The memorandum calls for new acquisition strategies, greater cooperation with allied shipbuilders, a fifth public Navy shipyard, a centralized submarine component repair center, and a review of Naval Sea Systems Command.

One of its most important proposals is an expanded version of the “Finland Model,” which would allow qualified allied shipbuilders to construct the first vessels of selected classes overseas while simultaneously investing in American shipyards, training American workers, establishing domestic supply chains, and transferring production knowledge to the United States.

This approach could help deliver ships sooner while rebuilding the industrial capacity needed to produce future vessels in America. However, foreign investment alone will not solve the U.S. shipbuilding crisis. Success will require a complete industrial strategy that connects shipyard capacity, mature designs, workforce development, supplier readiness, predictable demand, and disciplined execution.

Why American Shipbuilding Capacity Matters

The strength of the U.S. maritime industrial base is a national security issue.

The Navy depends on a small number of private shipyards to construct its battle force ships. At the same time, four public Navy shipyards are responsible for much of the maintenance performed on nuclear-powered submarines and aircraft carriers. When construction or maintenance falls behind schedule, the effects spread throughout the fleet.

Ships remain in maintenance longer. New vessels arrive later. Deployment schedules become harder to manage, and the Navy places additional operational pressure on the ships already in service.

The U.S. Government Accountability Office has found that infrastructure and workforce limitations are contributing to persistent cost and schedule problems across Navy shipbuilding programs. GAO also reported that none of the seven manufacturers constructing the Navy’s battle force ships were positioned to meet the Navy’s delivery goals.

This is not simply a matter of ordering more vessels. The industrial base must have the physical capacity, equipment, skilled workers, suppliers, materials, and stable designs required to turn those orders into mission-ready ships.

The Ford-class aircraft carrier program illustrates the consequences of limited capacity and complex execution.

USS Gerald R. Ford was procured in fiscal year 2008, commissioned in 2017, and did not reach initial operational capability until December 2021.

USS John F. Kennedy was procured in 2013 and is expected to be delivered in 2027.

USS Enterprise was procured in 2018 and is scheduled for delivery in 2030.

Each carrier requires approximately 12 to 15 years to move from procurement to scheduled delivery. That timeline makes it difficult to replace retiring Nimitz-class carriers, increase fleet size, or respond quickly to changing operational requirements.

Similar pressures exist across submarine, surface combatant, amphibious ship, auxiliary vessel, and Coast Guard programs. According to GAO’s 2026 testimony on Navy and Coast Guard shipbuilding, American shipbuilding programs have collectively experienced billions of dollars in cost growth and years of delays during the past two decades.

The United States cannot close this production gap through procurement policy alone. It needs more capable shipyards and a stronger network of American maritime manufacturers.

Expanding U.S. Shipyard Infrastructure

The presidential memorandum calls for a plan to establish a fifth public Navy shipyard. That additional capacity could help relieve pressure on the Navy’s existing public yards, improve maintenance availability, and create a more geographically distributed naval repair network.

The Gulf Coast deserves serious consideration, particularly Alabama and Florida.

Mobile, Alabama, has deepwater access, an established shipbuilding workforce, and a network of maritime manufacturers. Florida brings major naval installations, commercial ports, ship repair capabilities, and access to both the Gulf and Atlantic. Additional public and private investment in the region could support ship construction, vessel maintenance, workforce development, and supplier growth.

Geographic distribution also improves resilience. Concentrating too much of the nation’s shipbuilding and repair capacity in a limited number of regions creates operational and supply chain risk. A broader network of capable facilities would give the Navy more options when managing maintenance workloads, construction schedules, natural disasters, and other disruptions.

A new shipyard will take years to plan, permit, construct, equip, and staff. The country should begin that work now, but it also needs a strategy for delivering ships before the new capacity becomes operational.

That is where allied shipbuilding investment can play an important role.

How the Finland Model Supports U.S. Shipbuilding

The Finland Model is designed to address immediate fleet requirements and long-term industrial capacity at the same time.

Under the naval version outlined in the memorandum, a qualified foreign shipbuilder could construct the first two vessels of an approved ship class at an established overseas yard. To participate, however, the company would also be required to build a new American shipyard, acquire an existing U.S. facility, or take a majority equity position in one.

The allied shipbuilder would be required to train American workers, license applicable production methods, establish a domestic supply chain, and construct all subsequent vessels in the United States.

This is not traditional outsourcing. It is a structured form of foreign direct investment intended to transfer proven shipbuilding capabilities into America.

The approach builds upon U.S.-Finland cooperation on Arctic Security Cutters. Finland has decades of experience designing and building icebreakers for extreme environments. Under the current acquisition strategy, initial vessels can be produced using established Finnish expertise while most of the cutters are constructed at American shipyards.

The U.S. Coast Guard’s Arctic Security Cutter plan includes 11 vessels, with up to four constructed in Finland and seven planned for American production. The strategy allows the United States to receive initial vessels sooner while bringing specialized design knowledge, production processes, and shipbuilding expertise into the domestic industrial base.

The Navy’s proposed Finland Model would apply the same principle to as many as three ship classes, potentially including surface combatants, replenishment tankers, and roll-on, roll-off vessels.

If implemented correctly, the model could reduce startup risk, introduce greater competition, accelerate initial deliveries, and create permanent American shipbuilding capacity.

Design Stability Is Essential to Faster Ship Production

Foreign shipbuilding expertise will provide limited value if the United States imports a mature design and then repeatedly changes it.

Design instability has long contributed to higher costs, delayed deliveries, material shortages, out-of-sequence work, and production rework in naval shipbuilding. When construction begins before a design is sufficiently complete, workers may have to remove finished sections, reroute systems, reorder components, or wait for revised technical information.

Section 3(c) of the presidential memorandum addresses this problem by restricting iterative changes to mature parent designs used in Finland Model programs without senior approval.

That requirement is critical.

Allied manufacturers can transfer proven ship designs, production methods, and technical knowledge, but the United States will lose much of the schedule and cost advantage if the Navy continually modifies the designs after production planning begins.

Commercial shipyards achieve higher production rates partly because they build mature designs in repeatable series. Naval vessels are more complex and must meet demanding mission requirements, but the basic manufacturing principle still applies. Stable designs improve material planning, workforce productivity, quality, supplier performance, and schedule predictability.

The Navy must define operational requirements early, complete design work before construction, and tightly control changes after production begins.

South Korea Can Be a Major Shipbuilding Partner

South Korea should be one of the leading allied partners in America’s maritime industrial strategy.

Korean shipbuilders operate some of the world’s largest and most productive shipyards. They bring experience in serial production, modular construction, production automation, advanced manufacturing, and the delivery of complex commercial and naval vessels.

Korean manufacturers are already developing partnerships with American shipyards and maritime companies. These relationships can support knowledge transfer, infrastructure modernization, workforce training, and the introduction of proven shipbuilding practices at U.S. facilities.

The $150 billion Make American Shipbuilding Great Again initiative, known as MASGA, provides another potential mechanism for accelerating that cooperation. MASGA is the maritime component of a broader $350 billion investment agreement between South Korea and the United States.

The remaining $200 billion is intended for other strategic American industries, including energy, semiconductors, pharmaceuticals, critical minerals, and artificial intelligence.

MASGA could direct Korean capital, financing, technology, and industrial expertise into American shipyards and maritime manufacturers. With clear domestic production requirements, it could help modernize facilities, install advanced equipment, train workers, and expand U.S. shipbuilding capacity.

The value of the initiative should not be measured only by the amount of money announced. It should be measured by the additional production capacity created in the United States and the number of mission-ready vessels delivered.

Rebuilding the Maritime Supply Chain

A shipyard cannot build faster than its supply chain can support.

Naval vessels require thousands of components from Tier 1, Tier 2, and Tier 3 manufacturers. These include castings, forgings, valves, pumps, propulsion equipment, electrical systems, controls, piping, specialty metals, and other highly engineered products.

Many of these components come from a limited number of qualified domestic sources. When one manufacturer lacks capacity, loses skilled employees, experiences a quality problem, or falls behind schedule, the delay can affect an entire shipbuilding program.

The Navy has already invested heavily in its maritime suppliers. Its Maritime Industrial Base Program reported funding nearly 800 projects across 39 states since fiscal year 2018 to improve supplier capacity and capability. Its 2025 Year in Review identified 169 supplier projects across 32 states, representing $648 million in investment.

Those efforts are important, but they must be connected to measurable production outcomes.

Investments should target known constraints, increase throughput at critical manufacturers, reduce single-source dependencies, improve quality, and support consistent on-time delivery. The Navy and prime shipbuilders must also provide suppliers with better forecasts so they can justify investments in facilities, equipment, inventory, and employees.

Foreign direct investment should extend beyond the major shipyards. If allied manufacturers are going to participate in American shipbuilding, their investments should also help qualify and strengthen the domestic suppliers that will support future U.S. production.

Building the American Shipbuilding Workforce

American shipbuilding also faces a significant workforce challenge.

Shipyards and maritime manufacturers need welders, pipefitters, electricians, machinists, engineers, planners, designers, quality professionals, and production leaders. These positions often require specialized training, security clearances, certifications, and years of experience.

GAO has identified recruiting, training, and retaining skilled trades workers as a continuing source of risk for Navy and Coast Guard programs. Workforce shortages affect submarine production, surface ship construction, auxiliary vessels, and cutter programs.

The solution requires more than short-term hiring campaigns.

The United States needs regional workforce systems that connect shipyards and manufacturers with community colleges, technical schools, apprenticeship programs, universities, veterans, and local economic development organizations. Training must also align with real production needs so workers develop the skills required by nearby employers.

The Navy’s maritime workforce programs are beginning to build these connections.

Regional talent pipeline initiatives have placed workers with hundreds of suppliers, while education programs have introduced thousands of students to maritime careers.

Allied investment can strengthen those programs by transferring practical production knowledge. American workers should have opportunities to train at experienced foreign facilities, learn proven manufacturing methods, and bring those capabilities back to U.S. shipyards.

Predictable Demand Must Support Private Investment

Shipyards and maritime manufacturers will not make major capital investments without confidence that demand will continue.

New dry docks, manufacturing equipment, workforce programs, and production facilities require significant upfront spending. Manufacturers must know that future orders will justify those investments.

Annual uncertainty in defense appropriations and frequent changes to long-term shipbuilding plans weaken that demand signal. A shipbuilding strategy cannot succeed if funding arrives late, vessel quantities change repeatedly, or programs are restructured after manufacturers have already invested.

Congress and the Department of Defense should use predictable multiyear procurement, block purchases, stable ship designs, and clear production schedules to support private investment.

Longer production runs can also improve performance. Repetition allows workers to become more efficient, suppliers to plan materials and capacity, and shipyards to spread infrastructure costs across more vessels. Stable demand makes it easier for manufacturers to invest in equipment, hire employees, and develop additional suppliers.

Congress must complete the fiscal year 2027 defense appropriations process and provide the funding certainty required to move these initiatives from policy into production.

From Foreign Investment to American Industrial Capacity

The United States does not need to choose between allied cooperation and domestic shipbuilding. A well-structured co-production strategy can use allied investment to expand American capacity.

The first vessels can be constructed at experienced allied shipyards to meet urgent operational requirements. At the same time, those manufacturers can invest in American facilities, train U.S. workers, strengthen domestic suppliers, and prepare American production lines for the remaining vessels.

This approach will work only if the United States protects the underlying industrial objective. Agreements should include enforceable requirements for domestic investment, workforce development, technology transfer, supplier growth, and future U.S. production.

The country must also maintain design discipline, provide predictable demand, and manage investments according to measurable outcomes.

Success will not be determined by dollars committed, shipyards announced, or vessels placed under contract. It will be determined by mission-ready ships delivered at the required speed, cost, and quality.

America has spent years documenting the problems facing naval shipbuilding. The new presidential memorandum creates an opportunity to begin solving them.

Allied co-production, including the Finland Model and partnerships with South Korea, can help deliver initial ships sooner. More importantly, it can help build the American shipyards, maritime manufacturers, skilled workforce, and supply chain needed to produce the rest here at home.