europe, and the united states come together to strengthen our collaboration and enhance our defense capabilities. only that will ensure an effective and coordinated response to many challenges to global peace and security we face. that is why today's event is so important. although there are many ways our nations can cooperate, i want to focus first on the ship building which has always been a significant element of global strategic competition. the u.s. congress recently released a report highlighting the disparity and building capacity between the united states and china. to be blunt, it found that china is far ahead. right now china has 230 times the ship building capacity of the united states, while also possessing the world's largest

maritime fighting force operating 234 warships to the u.s. navy's 219. the great 19th century naval historian famously side, whoever rules the water rules the world. and the power dynamics. and there's strong bipartisan support in the u.s. to address this challenge. the bad news is that by working together the capacity exists for korea and the united states to build a stronger industrial foundation and one that will jointly support our friends aallies national security and economic prosperity. korea is the world's second largest ship building country with a 30% market share and reputation for efficiency and

excellence. visiting korea's ship yard earlier this year to see our swift ship building, as he mentioned himself during the korea national day reception two weeks ago. of course, challenges remain, there are various-- full cooperation that we must address. for example, u.s. low mandate that u.s. military ships must be built in america which have limited the expands with foreign partners. this is salient as approaching elections, increase the core to protect american manufacturing and the associated jobs. nevertheless, this is a pivotal moment and we must recognize that cooperation creates benefits than protection. while the u.s. remains

unmatched in its ability to produce the most technology advanced military force, strengthening the military base cannot be accomplished overnight or by itself. we can best enhance our capabilities and innovation to ensure a secure future at sea only by working together with trusted partners with the strength to compliment our own. recognized this and introduced a regional sustainable framework. it's a creative way to expand cooperation within the boundaries of the current u.s. law. it provides opportunities for allies and partners to help maintain and repair u.s. military system closser closer to the point of their name. korean companies have found

ways to deepen our mutual cooperation, including participating in naval -- ammunition ship mro and acquiring yard. the momentum is there, but we must do more. this is the moment to deepen our partnership and strengthen our industries even further. ship building is only one potential area of cooperation, but there are others as well. the u.s. national defense industry strategy rightly emphasized that we can enhance production capacity and address the critical capability gap by working together. the ongoing conflict in the middle east and europe that i mentioned earlier have shown how critical and strong and resilient the defense industrial base remains. the ability to produce defense capabilities at both speed and scale is absolutely vital.

korea, the u.s., now european allies, all bring our own unique strength to the tables. strength that ought to be leveraged for our mutual benefit and shared responsibilities. korea, as the world's 10th largest exporter in 2023 offers many reliable approval and quick and effective solutions, particularly with the conventional weapons. consider, for example-- refound nor for fire power, and the tank, with speed, strength and surviability in the most tense combat situation. and the rocket launcher, one of the most formidable rocket launchers and trainer which was

developed in cooperation with lockheed martin and cost effective. i'm glad that the u.s. house of representatives also recognized the benefits of mutual cooperation by including a language in the 2025 ndaa, mutual enhanced defense cooperation between korea and the united states. similarly, our u.s. and european partners bring their own strength and expertise to the table. for example, they are both leaders in aerospace, cyber defense, and advanced autonomous weapons systems technology. today's forum is an excellent opportunity to identify how we can each leverage our effective strength to deepen our collaboration. by working together, we can create more resilient and

improve and level of success out of reach for any of us on our own. working together, will also let us better purse a research and development project, emerging technologies like ai integrated weapons systems, unmanned aerial vehicles and undersea capabilities. collaboration ensures that we stay-- we stay ahead of the competition and enhance our readiness with the challenges that we have. let me close with a brief reflection of the launch we saw over the weekend. once it was thought that saving the booster from the rocket was impossible. but we can take inspiration from the amazing scene we saw on sunday as the booster floated back down and was plucked out of the air by two giant arms. tasked with a clear goal,

people made it happen. that is why i know that although we face difficult barriers in defense cooperation, our commitment can and will make it a reality. so once again, i want to thank hudson institute for inviting me to bring us together today and now i look forward to hearing from all of you. thank you very much. [applause] >> time for a couple of questions from the audience. so, let's see. who would like-- chris, could you introduce yourself and your affiliation. >> (inaudible) >> good morning, mr. ambassador. christopher bellow from provision advisors and defense and aerospace report. in your conversations with the administration and with the congress here in the united states do you feel like you are

getting the right support and what else can be done in the short and medium term to help bring the needed, whether it's technology or whether it's actual armaments here to the united states so that together, as you said, we are a more formidable alliance when facing the chinese and the russians? >> well, that's a good question. but when you say-- it depends who you are. the defense industry cooperation is something, from my experience, it's something it takes longer than cooperation other than just the normal industries. because first of all, you have to build a trust between the partners. without trust, you cannot have defense industry cooperation. korea has become one of the

indisdefensible -- indispensable allies of the united states. so far so good. to me i have -- well, i've been ambassador to the united states for year and a half, but i now already realize some difference and progress since my arrival last year. so we are working hard to build on our trust and alliance and i think not only ship building, but also, we have many areas for future cooperation. including the items that i mentioned already. so, i'm quite optimistic. so, as i said, i'm this cooperation always takes time, but probably, i will make some kind of kind of progress within a few weeks' time frame.

thank you. >> any last question? >> sir, can you introduce yourself. >> i'm at the office of the austrian defense attache and i was going to ask, south korea is sending significant amount of troops to russia, whether this in any way shape or form with decision making concerning north korea right now? thanks. >> yeah, that's very serious issue. i'm dealing with right now today. first of all, we are still analyzing that information. we don't have any confirmed intelligence information on how many or weather the north korean troops are in the battlefield or how many of them are in the front.

but i think it's quite likely that it might already happen, but if that is the case, i think this is something we have to deal with in a very serious manner. together -- not just between korea and the united states, but also together with allies and partners from n.a.t.o. members. we need to have, first of all, some coordinated response, so we have to, i think, hold some confrontation, as we have some information. but as i've said, this is clearly showing that the security of the indo-pacific and the security of the surrounding area is closely connected. that's why, i think n.a.t.o.

invited members in july as permanent partner of the n.a.t.o. cooperation. >> thank you. thank you so much, mr. ambassador. thank you. >> thank you very much. [applause]. [inaudible conversations] >> oh, good, great, jim, good to see you. perfect. mr. lee, the center vice-president and head of design in the special naval unit and mr. jim shurmur deputy managing director of american

metal vehicles. thank you so much, everyone. looking forward to the conversation today. we'll start with the navy side of things and allied cooperation in this domain. in preparation for the panel i was reading the recent bipartisan congressional report on the u.s. maritime capabilities overall and it presented some pretty alarming pictures as the ambassador said, china has 230 times the capacity of the united states in terms of shipping orders. the united states had five last year. china had something like 1,700, so it's pretty stark. mr. brock, can you tell us a little about how the department is feeling about this problem? i know you have been and i know the department of the navy has several initiatives underway? >> yes, the secretary's maritime initiative at its core is intended to restore the maritime power of the nation

for several reasons. the first reason, of course, is that our ability to build on naval combatants and the numbers we need in the time frame we need and for the cost that the american taxpayer can afford requires a broader industrial base, maritime industrial base to make that happen. you know, as over the last 30 to 40 years, as our maritime capacity, other than the naval, has almost entirely disappeared and china has risen as we've traded places with them as far as global ship building and the amount of flagged ships that we have. the cost and difficulty in building naval combatants has gone in the opposite direction. so at its core, the navy will benefit from a revival of the broader maritime industry in the nation and also, we will deliver what we need and also,

it's pretty apparent that over the last 30, 40 years, we've outsourced the transport of our economy, so 99.6% of our imports and exports that go by sea and over 90% of our economy does go by sea are carried on non-u.s. flag ships. so, it's imperative, also, for economic security and for the maintenance of our vital trade in times of crisis and in times of competition and not just in times of conflict, that we gain greater control over those broader aspects of american industry. >> thanks, steve. mr. lee, can you comment a little on the problem that i mentioned in the opening. you're in asia in the middle of what china is doing in the region in terms of its capabilities and how you see that landscape? >> well, the china ship building industry, commercial ship building to challenge our

nation's ship building a long time ago. i think the issue is the-- they took over the conventional merchant ship like the carrier and tankers. for now, they even start to building like the lng carrier which requires high technology and high quality, so, it's a bit challenging for us as well and china's ship building industry, they have a combined capability of both commercial and military, and so it can get synergy from to the military ships and a big concern for all of us as well. >> can the u.s.-- what can the u.s. learn from hyundai's model of that working together with your commercial building and i know that the navy in september to sort of

discussed to look at what's going on. what are your perspectives on that and then i'll ask mr. lee? >> yes, we've made several trips to hyundai and the secretary himself was there in february of last year meeting with the leadership in seoul and also at the ship yard. a great deal was learned and a great deal more can be learned. the amount of automation, digitization, the efficiency at the ship yard, used commercial ship building to underwrite to the economy of scale to bring efficiencies and affordability to naval and special project building. we in the united states don't do dual commercial ship building, we build only naval at shipyards and that makes it extraordinarily expensive and also, our shipyards are, you know, not nearly as modern or

up-to-date. so some folks like to say we build the most advanced naval combatants in the shipyards, which you look at that further not on time and more expensive. we need more modernizing our shipyards, 21st century shipyards and 21st century construction practices and those are many things that our friends in korea are already doing. and one of the big reasons for that. they have a competitor in china and nothing makes you more lean and more capability and more efficient than a competitor that is working hard to take the market share. >> my understanding is last year, actually, korea surpassed china in terms of ship orders. congratulations. so, tell us a little about the visit at the ship yard. i was reading about that and it's remarkable how modern, how many ply employees, something

like 40,000 employees using technology in manufacturing. >> yes, in the hyundai industry as a single ship yard, we are the largest ship yard 6.8 million square meter area. so, we have a dry dock and -- to improve our productive we have 15,000 our own employees and 20,000 subcontractors. so we deliver 50 ships per year. this year i think that 48 ships year so that's the annual capacity and we're operating a small ship yard inside the world's biggest ship yard. and we have the state of the art technology from commercial yard to the navy ship yard might be something that the u.s. ship building industry, mainly for navy ships, but we

have commercial ship building, we have a big competition in china so we have to develop our technology continuously and that comes to the navy ships as well. so some model of really embedding, embedding naval work within the commercial ship yard that we might not be doing and could be interesting to think about those types of models. now, i'll move from sea to land, mr. shurmur. can you tell us a little about the model in terms of its approach to defense cooperation? because it does really team that you have a really particular successful mod until working through subsidiaries and actually doing the nuts and bolts, the nitty-gritty of cooperation. >> right, to think our model primarily has been one of developing intellectual property to date, primarily in germany at the headquarters, but when we find international partner to buy that product,

we'll set up production facilities in their home country, so we built factories in australia and in hungary, recently to builds combat vehicles for those two countries. obviously the governments appreciate the job that that provides locally and the independence it gives them in a crisis to build their own product. but additionally, it gives the company and frankly, the collection of allies, more capacity globally to have those plants and i say that because i think one of the greatest constraints on growing capacity right now is skilled labor. if you have a factory, you can conceivably go to a second shift or perhaps even a third shift, but if you can't find enough skilled labor there, that's just impossible. there's only so much you can pay and a lot of blue collar workers, particularly in america, it's not worth an extra $10 an hour to move across country to give up the local family that helps watch the kids, interest rates, it's

difficult to buy a home, et cetera. so if you have several plants that are operating between typically 80 and 90% capacity and you actually have a lot more growth potential with that dispersion, a very large plant, you just have difficulty attracting enough talent. >> if you faced obstacles overall in opening of up factories in the united states, how are you balancing a sense of, is it easy? are states making it easy? is the federal government making it easy, the dod? has there been a change? >> there are still significant barriers, so, in the case in the united states and i work in the vehicles business unit, that's what i'm most familiar with, in order to do classified work for the u.s. government, of course, we had to become mitigated. it's not impossible, but it's challenging. >> can you explain that for a minute, just what the acronym means. >> stands for fortune ownership

and controlling interest, so to oversimplify, it's essentially a firewall between my company and the united states, american rheinmetall. my boss who runs it does not report to germany, he reports to the director. there are two employees, one is a german, one from the united kingdom and outside who are not employees, who are u.s. citizens has to outnumber the inside directors so they can vote down anything that's not in the united states national interest. so we have three u.s.-- two retired three-star generals and a u.s. security expert. >> and this is with an allied country so you can see how the bureaucracy works. >> and i think it works very

well and gives us an amazing amount of autonomy because my boss can go right to the small boards and the decision making rights that he has were substantially greater than someone who worked in a corporation of similar size and allowed us to be very agile and flexible, but i will say that it was a long road to get there. it cost a fair amount of money. you have to hire experts from consulting groups and law firms to help you navigate that and then, also to get a facility clearance to handle secret data. so companies that are not already operating in the united states and they have to be willing to make that investment without a contract in hand in order to get in the game and that's challenging. and the second part building factories expensive and we looked at that option and decided to acquire a firm, that deal is not closed yet, but we're buying, planning to buy an american company that has four factories already

operating in the u.s. to give us that manufacturing footprint. >> so you've highlighted a bit how dod, the problem with allied defense cooperation in many ways comes down to working through some of these bureaucratic hurdles to enable us to move faster in that domain. could you speak a little about your perspective? are we working on that? because it's a very practical obstacle to our ability to cooperate more effectively together. >> through the-- you know, the primary message that the secretary has been delivering on trying to work with allies and get through some of these challenges is invest in america. to come to america and have u.s. subsidiaries and implement many of the things that you just said right now to make some of that possible. but the goal is to, number one, obviously, the law does not

allow us from a ship building perspective not a weapons perspective, but the law does not allow us to build ships abroad. they have to be built in the united states. now, we have two u.s.-owned subsidiaries of ship builders from allied nations and we have one up in marinette, wisconsin and alabama, an australian firm, and so the secretary has opened that others would follow, follow that lead, including some of the world's, you know, best and most capable ship builders and of course, there's the ongoing effort to acquire the philadelphia ship yard that's working its way through the system. but, there's a lot of advantages to having a u.s. subsidiary, right? it's not only the political support you get from u.s. jobs and u.s. economic activactiviti especially in places that are

currently, you know, not-- that would require more economic vibrancy in the coastal areas, et cetera. but there's also real strength in diversification of not only where we can get our domestically, but advantage for the ship builders themselves to be located in the united states. if you think about the strategic depth that that offers, right? if you're building or repairing ships in northeast asia, you might not be doing that in crisis or conflict. so, it also offers the world's ship builders the depth to be able to do it in more of a sanctuary space in the united states and also allows the united states to have more capability than ship building. we as an alliance, we often think of alliance as strength in numbers, and the powerful deterrent effect and also, if conflict was to arise, you

know, many, including the secretary austin says, hey, our navy is much bigger, because we'll add in the combatants of the navy that are there with us. what is bigger deterrents than that is what our industrial capacity that they can bring. the ability not only to have ships, but the ability to produce many more ships and leverage the collective strength of our alliance and i mentioned we don't have much maritime capability in the u.s. anymore, it's pretty much naval and our competitor is a full spectrum global power across the entire industry, from shipping to ship building. but what we do have, as tremendous advantage, we have very close allies that are the best ship builders, not only in asia and korea and japan, but you've heard about who builds the ice breakers, an n.a.t.o. member. so we have a lot of industrial

gas capacity among our alliance and we need to pool that effort in ways that has fighting capability not only in our navy. >> and what has been your experience in working in the u.s. with american companies, the exchange of ideas. with can you tell us, what we just mentioned we have to figure out the opportunity and so, start to have that and with the technology we can share and we can co-develop for the future market. that's the area that we are taking the opportunity for the future program, but in the meanti,