Australian Report Says Trump Administration Pressure Is Driving Possible Sale of Mobile’s Austal USA to Korea’s Hanwha
The report quotes Austal Ltd. chairman Richard Spencer saying the tide turned when the Pentagon took over shipbuilding contracts and refused to renegotiate money-losing deals.
MOBILE, Ala. — A report published in Australia says the Trump administration is the driving force behind a possible sale of Mobile-based shipbuilder Austal USA to a South Korean conglomerate.
The report, published Tuesday, says top U.S. officials, including Deputy Secretary of Defense Steve Feinberg, made a deliberate decision to pressure Austal USA’s parent company, Australia-based Austal Ltd., by flatly refusing to give any more relief on money-losing Navy contracts that have been costing it tens of millions of dollars.
The story was written from an Australian perspective for an Australian audience, and much of it asks why Australian officials have not opposed selling the U.S. subsidiary. It does not include a response from Austal USA or U.S. officials.
Trouble with the Navajo-class ships
The report offers a look at Austal USA’s long-running struggles with programs such as the Navajo-class towing, rescue and salvage ships. They were the first steel ships the Navy contracted Austal USA to build, but losses have been so heavy that Austal Ltd. has described the deal as “onerous.”
“All of a sudden, the tide changed”
Among those describing a harder line from Washington is Richard Spencer, an American who has served as Austal Ltd.’s chairman and a board member of Austal USA since 2024. Spencer is a former Marine Corps helicopter pilot and former secretary of the Navy. He also briefly served as acting secretary of defense and as deputy secretary of defense under President Donald Trump in 2019 before being fired.
“We were talking about how we would take possible losses on the existing ships we had, and the navy was going to make up margin,” Spencer says in the report. “Then the secretary of the navy [John Phelan] got fired … and the Department of War took over the contract. All of a sudden, the tide changed. They told us there’ll be no renegotiation of contracts. We had no idea where this came from.”
A busy few days in August
The timeline suggests the shift was related to the administration’s interest in using foreign shipbuilders to speed up American military shipbuilding. Within a few days in mid-August, three significant developments unfolded:
- Korea’s Hanwha made a nonbinding offer to buy Austal USA for up to $1.2 billion. It has continued to develop that offer but has not made a binding proposal.
- Austal Ltd. revealed that Austal USA would post a substantial loss for the year because of difficulties with Navy contracts. That took Austal Ltd.’s fiscal-year outlook from an estimated profit of about $78 million in U.S. dollars to an estimated loss of about $80 million.
- In an Aug. 13 memorandum, Trump offered a pathway for foreign shipbuilders to build U.S. military ships. One requirement is that they build or buy a U.S. shipyard to take advantage of it.
John Rothwell, an Austal Ltd. founder who was chairman until Spencer succeeded him, said in the report that the administration was playing favorites.
“There has been a change. The Trump administration has said they would like bigger and better shipbuilders,” Rothwell says in the report. “Trump is looking at Korean shipbuilding expertise, and they’ve got very deep pockets.”
Hanwha’s interest has been a running story on the Mobile waterfront, including its renewed lobbying push in Washington on shipyard investment. Any sale would change the ownership of one of the best-known shipyards on the Mobile River.
