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Just this section of a US Navy ship has been under construction for half a year. That's crazy because it's like it's a big part. It's still just a small part of a ship. From first plate cut to when we actually launch the ship is usually about 2 years. So this ship is nowhere near finished. But this US shipyard is moving as fast as it can. Because right now, America is racing to catch up with China, the world's top ship builder. China produces about 1,700 commercial ships a year. The US builds just five at best. I don't think I will ever, ever touch the bottom of a ship. This is crazy. Today, America is so far behind that Washington is calling it a threat to national security. And it's turning to South Korea, the second largest ship
builder, for help making ships again. But we're going to make them very fast, very soon. We went to one of the US's last major shipyards to understand why American ships take so long and cost so much to build and to ask the question at the center of the global ship race. How long do you think it's going to take for us to catch up to China? In 2016, the US Navy asked a simple question. How many battle force ships would America need if a war broke out with its rivals, including China? Its answer, 355. Because back then, China had about 255, but today it's estimated to have more than 400. America still hasn't reached the goal it set 10 years ago. It's about 60 ships short of that, and the goal is even higher today. Now, the Navy
is betting on at least seven shipyards to help it close that gap fast. Oel USA is one of them. To film here, we had to agree to blur out anything that could be top secret and compromise national security. This shipyard builds all kinds of vessels, including search and rescue ships for the US Coast Guard and this expeditionary fast transport or EPF for the Navy. to build one. Oel USA first needed special government clearance because Navy designs are classified, which is why where we're about to go is really rare. We're going to go inside. Not to be rude, but I mean, this ship isn't really a beauty. It's not a beauty.
This is uh we've made some pretty ships. This is the pickup truck that the Navy needs, right? Uh it's it's a work vessel. It's not a warship. It doesn't have a lot of weapons. But even without all the time spent arming this ship, building this Navy pickup still takes years. Ever since you cut the first piece of aluminum for this ship. How long has it been since then? We're 4 months from delivery. So it's been about 32 months. 33 months. In that span of time, America could once build about 3,000 ships.
This is what US shipyards looked like. The last time America was responding to a ship shortage. No sooner is one launched than they swing a new keel into place for another. Not a minute is wasted. During World War II, German submarines were sinking merchant vessels that carried the food, weapons, and fuel Allied forces needed to keep fighting. The present rate of Nazi sinkings of merchant ships, it is more than twice the combined British and American output of merchant ships today. So in 1941, President Roosevelt called for an emergency program.
We must build more cargo ships and still more cargo ships. The government poured about $900 million, the equivalent of $20 billion today, into expanding shipyards and mobilizing factories to support ship building. Within just 3 years of Roosevelt's announcement, the US went from building about 50 ships annually to more than 1,900. Sea power from Maine to California, 27 ships launched in one day. But back then, the US had a big advantage. A huge industrial workforce already skilled in building things. Today, the Navy estimates America is short about a quarter of a million people with the skills to build the ships it will need in the next decade. If the goal is to build more ships,
well, we have to have a good workforce. That's first and foremost. So, our electricians, our pipe fitters, welders, those are high demand jobs. That's Shelley Thigpen. She's overseeing the build they're starting on today. A Coast Guard cutter due in 3 years. But to hit that deadline, the shipyard needs 365 people. Finding enough people is one of the biggest ongoing challenges for the business. Oel USA can't just hire anyone who wants this job. For security reasons, the government only lets it hire US green card holders and citizens. I mean, US can be spies, too, right?
We follow the requirements of our contracts to make sure that we're doing the necessary background checks. Then, OEL USA has to spend four years training them as part of its apprenticeship program. This has to be very precise. Uh, but this is basically spot-on from the design to this cutting table. Everything is right on. What if it was like 1 millm off? Could be a big problem on down the line. It could throw bulkheads off. It could throw frames off. The rework that would cause uh would be many, many hours. That's why every job here takes skill
and precision. I mean, if I'm off by any amount, it might leave too big of a gap the deck that it's going onto. To train just 200 apprentices, Austel USA has to spend over $3 million. And once you've invested that much, the next big challenge becomes getting them to stay in the business. And you understand why that's hard when you see workers layering up in 100° Alabama heat. Are you putting that sweater on? Yes. It's so hot. Why? Uh to keep the classrooms up and all drying up. It's a hot job. It's a hot job most of the time. We are lucky to have everything undercover to where we're not in the sun. So, that's better. At many American shipyards, most of this
work happens outside, which makes hot days even hotter. But when it rains, sometimes work stops. Employees get paid hourly, so when the weather is bad, they're likely looking at a smaller paycheck. That's another reason there's so much turnover in this industry. Why not salary people? An hourly worker, uh, they can get paid overtime. It's just how it's set up really. The Navy says worker attrition has been a major driver of delays on its new constellation class frig, which was being built at Finantiier Marinette Marine in Wisconsin. The first ship ran three years late and the Navy ultimately cancelled the whole class.
Every time you lose somebody, you've got to replace their experience. You got to find a new person. You've got to train them up to it. And so you lose a lot of time every time. That's the biggest challenge to scale. America began losing its ship building workforce after World War II. The building boom left it with more ships than it needed. So Washington stopped pouring as much money into the industry. And so an era ends. The Brooklyn Navyyard, cradle and haven for US warships, becomes 217 acres of silence. At the same time, South Korea began pouring big money into ship building to help counter threats from the North.
Labor there was cheaper than in America, and that also attracted orders for commercial ships from companies around the world. As money poured in, shipyards could reinvest to modernize and expand. Until 1981, the US government helped offset some of the higher costs of building ships in America. But when the Reagan administration ended that support, Americanbuilt ships got even more expensive. The Jones Act, enacted decades before, helped protect a small domestic market. It mandated that ships moving cargo between US ports be made domestically, but that guaranteed business also insulated American yards from global competition, pushing prices even higher.
Big commercial orders stopped coming altogether. So many shipyards shuttered. By 2000, South Korea had become the world's top ship builder, winning more than 35% of global vessel orders by tonnage. Commercial ships aren't naval ships, but they keep a huge workforce ready when the Navy needs it. Meanwhile, the US today accounts for just.003% of the world's commercial ship building. And without a workforce ready to step in, if the Navy says it needs a ship faster, yards need to make a tough call. We have to investigate, you know, is that possible? If it is possible, what will that take? What other programs will we, you know, have to maybe push out or pull people from?
You're trying to grow naval capability directly as opposed to just, you know, as part of that is converting commercial capacity. And so that does make that growth harder. But experts say that right now the US can't afford to grow slowly because America's naval fleet is being stretched thin. Since the conflict with Iran started, the US has moved some of its ships from the Pacific to the Middle East. Ships that were there to help deter China and respond fast if a crisis broke out, like an invasion of Taiwan. That's the trade-off when you don't have enough ships. Send them to cover one conflict and you have fewer to cover another. So building ships quickly matters more than ever. But when shipyards build exclusively for
the US Navy and Coast Guard, delays can easily snowball. There's a lot of changes that happen throughout the life of the ship. The design we start with, you know, is constantly being upgraded and updated. even after work is in full swing. The Navy sometimes changes its mind on a design midbuilt. That's especially common on the first ship in a class, which the industry calls a lead ship. And that's also where a lot of the kinks get worked out. You know, the first in class comes with a series of challenges as you build the ship for the first time and activate it and test it. But once you're this far along, a single change can cost shipyards months and add tens of millions of dollars in labor alone.
And so the investment and the challenges required to work through, you know, a lead ship are very, you know, expensive and timeconuming. And this isn't a hurdle naval shipyards face just once in a while. In the ship building industry, if you think about it, uh, and compare it to airplanes, you might develop, you know, a couple of prototypes of an airplane and then you might go off and build 500 of that airplane. On the ship building side, you build a class of 10 ships. That means for every 10 ships you build, you're facing a new lead ship with more potential delays and more expenses. When that's happening every few builds, your shipyard can constantly be operating years behind schedule. And if you're short on labor, you can't just throw
more people at the problem. China can. The country entered the global ship race in 2000. At the time, China was importing huge amounts of raw material and paying foreign companies to ship them in. That's where Beijing saw an opportunity. Build those ships at home. It poured big money into Chinese shipyards and steered its orders there. In just 10 years, China went from receiving just 7% of the world's major ship orders in tonnage to about 45%, outpacing South Korea. Today, it's by far the biggest ship builder on Earth, producing more than 53% of the world's ship tonnage. China builds some of its naval ships in the same yards as commercial ones, so it can more easily convert capacity to handle big orders
from its navy. And that's one reason the country can build some naval ships faster than America. Over the next four years, the US expects to gain just two battle force ships. reaching a grand total of 293. If we compare that to China, which is projected to have 435, does that make you nervous? Nervous isn't really the right word. It is impressive, right? It is very impressive, but you know, obviously what I'm more interested in is okay, how is you know, how is the United States responding? We reached out to the US Navy to see what it has to say about this disparity. and the chief of naval operations had nothing to add. So in 2025, the Trump administration issued an executive order to rebuild America's maritime industry
and asked South Korea for help. Today, the country is the world's second largest ship builder. With high-tech shipyards that rival China's, South Korea uses robots for welding and digital systems to track huge ship sections in real time. As part of a trade deal with the Trump administration, South Korea pledged to invest $150 billion into helping modernize US shipyards. One of the country's largest ship builders, Hana Ocean, has even bought an American shipyard and is training local workers on how to use new tools. If ship building is so important to American national security, how is it possible that this is something we're looking to foreign countries to teach us? A lot of the lessons in general about ship
building have come from the number and the size of ships that some of these foreign countries have built. And so they have some very good production related uh lessons for us. Oel USA is one of America's newest and most modern shipyards just 27 years old. So parts of this facility were built around automation early on. So I'm not seeing in this facility right now, I'm not seeing a ton of people. That's correct. So the automated welding processes don't require a large team. So this here is the weld that machine made. It can put multiple plates together and once they become one large plate, we call it a blanket, like a big blanket plate. What part of the ship will this be? This looks like it's going
to be a deck. But many US shipyards are still either completely shut down or continue to rely heavily on the same equipment they used half a century ago. Even with help from South Korea, a recent government analysis found that upgrading four public yards could cost over $200 billion and take more than 50 years. So, if South Korea is already so good at building fast, why haven't we let it build our Navy ships? US law largely prohibits military vessels from being built outside the country. We have a lot of things that are proprietary to naval vessels and Coast Guard vessels like this part of the process where the
walls of the ship start coming together. We can't film behind these walls, and that gives you a sense of just how critical what happens here is to the US's national defense. The way these sections are built can help determine how well the ship holds up in a fight. You can't just give that information to other countries to go and build. There are certain things that we can't farm out. We can't take away from our country. Ship building being one of those. But in an emergency, the president can grant an exception. And in August 2026, the Trump administration did. America can now outsource two initial ships in up to three naval classes to foreign shipyards under the condition that those companies
then invest in a US, bring in their tech, train American workers to build the next ships, and develop a domestic supply chain. Because that's the other thing America is missing today. There are millions of parts in a ship and they have to get here from all over the world. We have hundreds of suppliers really across the world that supply everything from nuts and bolts to steel to equipment. Logistically, it makes it a little easier um to just truck something over if we're getting it locally. We have parts that are coming from other parts of the world. We have to, you know, uh, coordinate that time it takes in transit to get here from overseas.
It's a lot of moving pieces, a lot of parts that have to come together at just the right time. You realize how many parts Shelley is talking about when you see these giant modules start coming together. So, I'm standing underneath about 1,800 tons of metal right now. We do have things that sometimes don't make it. Uh but we usually do other work. Will it delay the delivery of the ship? There are some very critical pieces um and equipment sometimes that is uh could delay a milestone. China makes up to 60% of its key ship systems and equipment at home, which can mean less time waiting for parts and less money shipping them in.
But if we were to have to get one thing really quickly, that might cost a lot. We had to bring it in. But bringing it in fast can come with another risk. The longer the supply chains, the more apt an opportunity for exploitation. There's no question about it. We don't have total control over those supply chains overseas. A Senate investigation found about 1,800 suspected counterfeit parts in the US military supply chain. Many traced back to China. the chance for espionage, nation state interference really opens up significant opportunities for malfeasants and for
access by the adversary. So in July 2026, the Trump administration mandated that defense contractors vet every supplier and trace every critical part before it goes onto a Navy ship. Oel USA says it already does that and tries to buy as much as it can domestically, but that may not be the case at every yard if we're trying right to build ships faster. What do you think that will do to our rate of output? It's a great question. Uh quite frankly, we have to find a way. That cost is frankly defeat. But however long it takes to vet all of this, a ship can't sit unfinished forever. So, how long would you estimate that's been sitting out there for?
Um, probably a couple of weeks. You get a lot of rain and humidity here. All steel has to be coated with a paint coating. Every year, the Navy spends about $3 billion just priming and painting its fleet because a single ship can cost millions to coat. And that's when these ships price tags start to make sense. So, we're entering the bridge area. We got special access, but many of the systems they use here have to stay secret. There's no big steering wheel like you see in the World War II movies. Nothing like that. This is how they drive the ship now. So, you can see it's it's
pretty automated. So, you can sit at that spot and look at the monitor similar to these monitors. and see everything going on with the ship. There's cameras, there's remote operating systems, all of that. So, they can turn things on and off, speed the engines up, do whatever they need to. Wow. So, you really have a great view from here. Yeah. All of this computer technology, how much does that cost? I can't tell you all of that because a lot of this stuff is furnished by the government, but it would be double digit millions.
And that's just upstairs. Oh boy, this is steep. There's just one thing we were allowed to show on camera inside this room. This is a Rolls-Royce and it comes from Germany. And based on our research, it costs about $3 million. Several nice houses down here. There were several nice Oh, wow. Yeah. And there's four of them, if you can believe that. And once you start adding it all up, this ship comes out to about $230 million, which, believe it or not, is on the cheaper side for a US Navy ship.
There's a lot of labor. Uh, all of the material has u is expensive. It's there's nothing cheap, especially when you're talking about application in a marine environment. By the time a US is done assembling a ship and launches it into the water, it can cost four to five times as much to build it in the US than it would in China or South Korea. But OEL USA says it tries its best to keep things cheap. We go and get the best value for the Navy. And we're obligated to do that under the contract, right? We're obligated to compete. Shipyards compete for government contracts on a couple big promises like schedule and cost. If a project runs over, it can
hurt the shipyard's chances of getting the next one. That sometimes creates pressure to keep estimates low and in some cases to hide when costs are rising. In 2024, Austel USA pleaded guilty to accounting fraud for allegedly under reporting costs on some of its Navy ship building programs. What do you think that can ultimately do perhaps to the government's expectations of shipyards like this and what it will cost them to deliver? I wasn't here during that time and I'm not really in a position to comment. What I will say is I think it's you know the better that we are about being you know providing credible ship building estimates through the entire process uh
the better off the industry will be. Experts say that matters because the US literally cannot make more ships in America if it doesn't know where the costs are snowballing. The Navy has a finite ship building budget to buy 34 ships in 2027. The Navy asked Congress for $65.8 billion, but its 11 most recent lead ships alone came in at least $8 billion over budget. Roughly 1/8 of that entire request. Every dollar pulled into those overrun ships is money the Navy can't spend on the next hulls or the workers and suppliers needed to build them faster. And while the US tries to close that
gap, China keeps building. What do you think the stakes are if we can't get those costs down soon? One of the important aspects of ship building is continuing to make it as affordable as possible. And I think the more that we're able to do that, the better off we will be. But what if we don't? We'll figure it out. I'm confident that we will figure this out. But figuring it out starts with a massive choice. What ships should the US prioritize next? In 2025, President Trump announced a new class of battleships outfitted with hypersonic missiles and highowered lasers. They'll be the fastest, the biggest, and by far 100 times more powerful than any battleship ever built.
The Navy wants to order the first one in 2028. and estimates it can build it in eight years. From your experience seeing what it takes to build ships, right? How realistic do you think that expectation is? We are standing by to, you know, help the government build whatever, you know, products they decide are most effective for them. Trump's full 15 ship program is expected to cost $275 billion. more than four years of the Navy's entire ship building budget.
The lead ship alone could cost $23 billion, about as much as a new Ford class aircraft carrier. And the two types of ship may compete for more than just money. The Navy expects this shipyard in Virginia to assemble both in the same dock. It's already behind on three carriers. So, as America's fleet ages, the next question becomes, if you can't pump out ships fast enough, how do you repair the ones you already have? Especially when you're thousands of miles away from a shipyard. During naval exercises like this one, the Navy is testing a potential shortcut, making replacement parts at sea, which requires moving huge machines onto a ship. So we put that machine on an aircraft carrier and we noticed that each time a
plane would land and hit the flight deck, it made just a tiny little thud, which when you have a laser that has to be operating at certain just microns of finness, it will very quickly get it out of alignment. But if the Navy can get this right, it could ease a much bigger bottleneck. Over the past decade, destroyer repairs have run 10,000 days late, partly because of supply and worker shortages at US shipyards. The goal is to relieve strain and augment the supply system so that you don't have folks waiting on, you know, a small component that you could manufacture yourself. Every little bracket that you can produce on the ship frees up a little bit of space. But for
now, there's still more work to do before warships can become floating ship repair yards. I don't [snorts] think that technology yet is to that kind of Star Trek replicator level where you can just push a button and then suddenly you're getting what you're asking for. So one day in the future, we might be at that point. Until then, all eyes will remain on shipyards like this one. The Trump administration says that it's done the most out of any recent administration to revive ship building in America. From your experience being in this industry, do you think that's accurate?
It is certainly fair to say that over the last 30 years, I have not seen as much interest in expanding the ship building capacity as I'm seeing today. In 2025, the administration signed into law $30 billion for new Navy and Coast Guard ships. And for 2027, it's asking Congress for another $65.8 billion, more than twice what President Biden requested in 2024. To put that in perspective, America's ship building budget alone is about equal to the entire defense spending of nuclear powers like France. Yet, this historic naval expansion represents just over a 4.3% slice of President Trump's unprecedented $1.5 trillion total defense request for 2027. And spending all that money is still just the first step. How long do
you think it's going to take for us to catch up to China's rate of output? I would say it's really a question of uh national priorities and national will and so it'll just depend on what sort of uh requirements and investment we decide we want to put into it. In August 2026, OEL warned of major losses on several US Navy ship building programs. That same month, the Korean ship builder Hana put in a non-binding offer to buy Oel USA. What would you say to those who argue there's absolutely no way the US can catch up? Priority and national will. The United States has always responded, you know, to any challenge that comes up. And if we decide that's the challenge that we want to respond to, I'm confident that the ship builders in this country
will respond to the challenge that we need to rise to.
