Hanwha Philadelphia (Hanwha Philly Shipyard) has achieved a significant milestone in its efforts to enter the U.S. military shipbuilding industry by signing a $269 million contract to build a Medium Landing Ship (LSM) for the United States Navy and the Marine Corps.
Contract Details
TOTE Services announced on Friday that Hanwha Defense USA has been selected as the first shipbuilder under a $2.2 billion Vessel Construction Manager (VCM) contract for the LSM program. This contract includes the construction of one ship at the Philadelphia shipyard, with options for three additional ships. Construction is expected to begin in the fourth quarter of 2027, with the first ship scheduled for delivery in 2030.
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Selection Process and Future Plans
The selection of Hanwha Defense followed a competitive bidding process that began in July, just days after Hanwha announced that the Philadelphia plant would come under the control of its defense subsidiary. Michael Coulter, President and CEO of Hanwha Defense USA, stated, "Since acquiring the Philadelphia plant in 2024, Hanwha has made significant investments in workforce and technology to pave the way for building ships for the U.S. Navy and other federal customers." This contract is seen as the first shipbuilding award for the U.S. Navy for Hanwha Defense USA and an important step in the company's efforts to transform the former commercial facility into a dual-use facility serving military and commercial customers.
TOTE announced that Hanwha was selected based on competitive pricing and acceptance of subcontractor terms and conditions. The company is also continuing contract negotiations with Bollinger Shipyards and Fincantieri Marinette Marine, which are expected to participate in the construction of the LSM fleet.
LSM Program and the Future of Military Shipbuilding
The LSM program is designed to provide smaller amphibious ships for the Marine Corps capable of transporting personnel, equipment, and supplies between islands and coastal areas, particularly in the Indo-Pacific region. The Navy and Marine Corps plan to create a fleet of 35 ships, with the initial TOTE contract including the construction of up to eight ships.
This contract is also based on an existing relationship between TOTE Services and the Philadelphia shipyard. Under a separate VCM agreement with the U.S. Maritime Administration, TOTE has been overseeing the construction of the National Security Multi-Mission Vessel (NSMV) program at the Philadelphia shipyard. Of the five training ships, four have been fully delivered.
The announcement of this contract comes amid significant changes in Hanwha's shipbuilding operations in the United States. Hanwha Defense USA has recently announced plans to acquire a controlling stake in the Hanwha Philadelphia plant and place the facility under its defense ownership while continuing to expand its military shipbuilding business in the United States.
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