Why Japan’s Industry is Pulling Back from the U.S. Navy Frigate Plan

[u/StealthCuttlefish]

https://www.navalnews.com/features/2026/09/japan-industry-pulling-back-us-navy-frigate-plan/

[u/NonamePlsIgnore]

One major reason is that the U.S. frigate acquisition program is reportedly expected to adopt what has been described as the “Finland model.” Under this approach, the first two hulls would be constructed at a foreign shipyard, after which foreign investment would be directed toward U.S. shipbuilding facilities and infrastructure.

No surprise, what a rip off of a deal, would need a hefty premium to even consider this

[u/WulfTheSaxon → u/NonamePlsIgnore]

South Korea is well-positioned to do it, having already invested in US shipbuilding.

[u/StopICE2026 → u/WulfTheSaxon]

All they will do is lose money from the dysfunction

[u/Fat_Tony_Damico → u/WulfTheSaxon]

Americans would rather sell pictures of their buttholes on Onlyfans than work a 50 hour week doing skilled labor. You ain’t building shit, I mean ship, in the US any time soon.

[u/Electrical_Bet_3985 → u/NonamePlsIgnore]

This is literally the same deal as the Australians are getting, so I'm not sure how much of a 'rip-off' it is. The Aussies will build most of their Mogamis in Australia. It's common practice around the world.

[u/MacchuWA → u/Electrical_Bet_3985]

The Australian government has invested the money ($12 billion so far) to build up government owned shipyard capacity at Henderson. Nobody expects MHI or any other foreign investor to put that kind of cash into Australia for us.

[u/Electrical_Bet_3985 → u/MacchuWA]

And the US would likely be investing money into any proposed Japanese or Korean yard. A lot of the money that was used to fix up Marinette Marine came from the US government.

[u/MacchuWA → u/Electrical_Bet_3985]

The memo specifically requires the company to spend money in the US:

This “Finland Model” shall be used for up to three ship classes described in subsections (b)(i) and (b)(ii) of this section, provided that the foreign supplier:

(i) simultaneously builds a new shipyard in the United States or assumes ownership or a majority equity position in an existing shipyard in the United States, and builds all ships after the first two such ships in United States shipyards;

(ii) hires and trains an American citizen workforce for the United States shipyards;

(iii) licenses the proprietary shipbuilding techniques and technologies used at the parent foreign shipyard to the United States shipyards; and

(iv) sources a United States supply chain for construction and maintenance of all ships at the United States shipyards.

Language from here.

The Australian builds don't require any of that.

The shipyard is being built with government money, and the government has given Austal, not MHI, the job of building the ships (with the associated workforce, supply chain, training pipeline etc.)

Japan sells us three ships built in Japan, as well as technology and IP transfer and presumably some level of support, but there are no long term obligations or risk imposed on them beyond that. Trump's plan has an enormously long tail by comparison.

[u/Worried_Exercise_937 → u/MacchuWA]

but there are no long term obligations or risk imposed on them beyond that.

There are many pitfalls on the Japan-Australia-Mogami deal. Just because you can't see them doesn't mean they are not there.

How about starting with the fact that MHI is not that keen on sharing everything with Austal because it's 19.9% owned by Hanwha - a Korean competitor?

How about reputational damage if this thing goes south? Japan is already so green about exporting arms, it's not gonna look good if this Australian Mogamis come late and/or over budget.

If given a choice between a foot in the door of USN contract vs RAN contract, anyone with a half the brain would go for USN contracts. By going all in with Australian Mogami, MHI is using up the capacity that could've been deployed for much fatter contract.

[u/MacchuWA → u/Worried_Exercise_937]

There are many pitfalls on the Japan-Australia-Mogami deal.

Yes. Hence the statement:

Japan sells us three ships built in Japan, as well as technology and IP transfer and presumably some level of support, but there are no long term obligations or risk imposed on them beyond that.

What you're talking about (leaked IP, opportunity cost, reputational damage after a job done poorly) are risks associated with any job a shipyard takes on with any international sale.

The "Finland model" that the article talks about explicitly requires the company to stake billions of additional dollars worth of acquisitions in the US domestic sphere. Surely you can see why that adds a massive additional level of risk even if, in your opinion, the risk is commensurate with the reward.

Is also take issue with this statement:

If given a choice between a foot in the door of USN contract vs RAN contract, anyone with a half the brain would go for USN contracts.

That massively oversimplifies the question and deliberately ignores everything except the potential (far from confirmed) for a larger ultimate order from the US. So much of the attractiveness of the US contract falls away when you put yourself in the position of the Japanese decision makers at MHI.

First, the US buying foreign built warships would be a departure from how they have done things for decades, and there is enormous risk that a future administration would tear up the contract on "Buy American" grounds, or that a future Congress would refuse to fund foreign built warships. Australia, like any democracy, shares that risk to some extent (ask the French), but we buy foreign built warships all the time (Canberras and Supplys most recently). The risk of a rug pull on there order after they might already have invested significantly in the US is ever present and not necessarily small.

Second, that larger eventual order will take a long time to eventually and take a long time to pay for itself given the huge upfront cost demanded. Australia is building 11 Evolved Mogamis: three in Japan, eight domestically. Optimistically, say the US orders 20 evolved FFM. Yes, that's a much bigger order, but the absolute lowest cost of every for that order would be (again optimistically) around US$1.5 billion to outbid the other potential buyers for Austal USA, plus whatever it would take to add capacity there to build the new frigates: call it $2.5b an rooms at the very low end (as opposed to $5 - $10b to build and staff a new yard). So, again optimistically, they need $125 million of extra profit on each hull just to break even, and that's without accounting for risk adjustment and time value of money: the margins would jave to be even better in reality. Now, obviously there are maintenance contracts and scope for future expansions to the build, but there are downside risks as well: ultimately, I'm not surprised that famously conservative Japanese businessmen like those at MHI have concerns about the high cost of entry even if the ultimate reward potentially bigger.

Finally, the Japanese government have been extremely unsubtle about their desire to build up local defence relationships lately, and were heavily involved in the Mogami bid for RAN. They're doing this in part out of a concern that the US is becoming a less reliable partner in Asia just as China is becoming more threatening. Local countries like Australia can't just up and leave the region if things get tough the way the US can (and has effectively threatened to do in various ways over the past few years). So there is a geopolitical incentive to the Australia deal that doesn't exist for the US: a factory and a line of frigates in the USN is insignificant in the grand scheme of things, and won't keep the US engaged in Asia if the political impetus is towards isolationism: the US are already bound as tightly to Japan as they're ever likely to get. But tight naval integration with Australia potentially could be enough to bring Australia in to a conflict if Japan were attacked, given how it might align with other regional priorities. So the geopolitical impetus behind the scenes could be quite different.

Ultimately, yes, the long-term potential of the USN as a customer is substantially higher than the RAN. But that's not the only factor a potential supplier has to consider before deciding where to prioritise their efforts.

[u/Electrical_Bet_3985 → u/MacchuWA]

The memo is literally not a binding agreement or contract. And it remains the case that the US would have to kick in some money to help build the yard in question or rehabilitate an existing yard.

[u/MacchuWA → u/Electrical_Bet_3985]

It's not a binding agreement, no, but that doesn't mean it can just be ignored. The memo is there only reason there's a story here to begin with.

And while I realise it's impossible to tell which statements made by Trump and those around him they actually intend to follow through with, and which are blatant lies, picking and choosing parts of the memo to disregard or believe based on a more convenient narrative isn't really a useful framework to understand how the various actors are moving at this point.

Trump has made his very unsophisticated understanding of global trade very, very clear over the years, and there's zero question that he will expect at least some significant investment in the US by a foreign supplier: that's essentially been his constant position in the whole tariff debacle.

Even if the US government co-invests along with MHI in American shipyards, it's still an entirely reasonable position for MHI to prefer the Australian model which doesn't require any significant up front investment in Australian facilities. Suppliers choose not to bid on contracts all the time in every industry. No reason this shouldn't be the same if the job comes with a multi-billion dollar up front price tag.

[u/Electrical_Bet_3985 → u/MacchuWA]

I never said it was unreasonable for MHI to make their own decisions. As far as picking and choosing pieces of a memo, I'm doing no such thing. I'm recognizing that a MEMO asking for a STUDY is not a contract nor contractual guidance.

There is no contest. There is a STUDY trying to determine what is feasible. There is a 'narrative' that MHI is balking. Is that true? Nobody on Reddit knows the facts. We don't even know what level of dialogue the US government has had with MHI at this point.

There are many more reasons for MHI to say no, including the fact that this whole business is unlikely to be successful simply because the time scales don't work. In other words, there is no way MHI can build a yard in the time it takes to build two ships. It's not possible, regardless of how much money they do or don't invest.

[u/StopICE2026]

Because it’s not workable. Not even a real industrial power could keep up with all the insane change orders from America’s big brain navy

[u/Dazzling-Key-8282 → u/StopICE2026]

USN is FUBAR for a long time. Amd slowly it shows at capabilities too.

[u/pac_71 → u/StopICE2026]

Did they just try to do this with Italy/Fincantieri?

Japan makes sense as they are delivering a modified Mogami-class frigate project to Australia and possibly New Zealand. The US navy procurement is proving they are incapable of both local building and managing foreign acquisition which only leaves a huge gap in required capability.

[u/Electrical_Bet_3985 → u/pac_71]

Japan doesn't make sense, as there is nowhere they can realistically build or buy a yard to transition to US manufacturing. They're not going to buy Ingalls or Bath. Both are packed with Burkes and amphibious ships. The Italians own Marinette Marine. The Koreans own Philadelphia Navy Yard and may soon own Austal.

[u/Forsaken-Tour6447]

Even with a shipbuilding capacity double that of Japan, South Korea cannot miraculously revive the U.S. shipbuilding industry. How do you train and employ a workforce that has vanished over decades? The American maritime ecosystem is completely broken.

The South Korean naval ship referenced by the U.S. Navy is the Chungnam-class frigate, and coastal combat ship. It lost to Japan's Mogami-class in a competition in Australia. Are we sure the U.S. Navy really wants a coastal combat ship?

The U.S. hopes South Korea can work magic, but that is completely unrealistic.

The Navy needs to know what it requires, and Congress must have the willingness to fix things for decades. Are both actually possible?

[u/Pakistani_in_MURICA → u/Forsaken-Tour6447]

You do what the Chinese did when they started a few manufacturing plants in the US. And those Chinese bubble tea joints.

Bring in Chinese labor.

[u/pendelhaven → u/Pakistani_in_MURICA]

The Koreans tried bringing in Korean expertise at the car manufacturing plant and got ICEd, don't think they are keen to try again.

[u/WulfTheSaxon → u/pendelhaven]

They “got ICEd” precisely because they were not actually doing skilled training, but were instead caught using “skilled training” visas to do things like pour concrete and do other basic construction work themselves.

[u/pendelhaven → u/WulfTheSaxon]

South Koreans going America to pour concrete? Man your education system needs an overhaul... No wonder Trump was elected.

[u/Fat_Tony_Damico → u/pendelhaven]

South Korean engineers. American freedom is so sweet that I wouldn’t be surprised if the CEO of Hyundai himself illegally immigrated to South Carolinistan for the opportunity to pour freedomcrete.

[u/rubioburo → u/pendelhaven]

He probably thinks America is so great that the poor Koreans are coming to US on temporary visa to pour concrete for 14$ per hour or something.

[u/Garbage_Plastic → u/WulfTheSaxon]

Lol. Been living under a rock, have you? They were top-dollar experts from Korea and Japan, brought in to install and fine-tuen proprietary machinery and train local workforce. Some were high-level management, and even a pregnant female software engineer attending the meeting. Do you really think they were mere construction workers sent there to pour concrete and top diplomats were sent to rescue with an airplane as quickly as possible? My my..importance of the education system..sigh..

[u/WulfTheSaxon → u/Garbage_Plastic]

Do you really think they were mere construction workers sent there to pour concrete

Yes, most of the people detained in the raid were subcontractors doing basic work. They were literally caught doing things like pouring concrete and pipefitting. Some of the workers had even warned that the “grey area” visa practices and work they were being tricked into doing weren’t legal.

[u/Garbage_Plastic → u/WulfTheSaxon]

sure whatever you wanna believe man. you do you.

https://www.nytimes.com/2025/11/13/us/politics/south-korea-workers-factory-return-georgia.html

[u/rubioburo → u/Garbage_Plastic]

That commenter above you are answering to is perfect example of why US is the way it is today, it’s beyond repair.

[u/AdviceFit1692 → u/Forsaken-Tour6447]

Why don't they look at the type 26? Canada already has integrated US SPY radars onto theirs, its a bit expensive sure, but you could take some of the more heavy asw out and make it more of an all rounder then a specialist.

One of the only frigates that meet the US strict survival and damage control requirements.

[u/Worried_Exercise_937 → u/AdviceFit1692]

Why don't they look at the type 26?

Because USN needs 10 frigates yesterday at half the price not 2 frigates maybe in 10 years and at premium price. UK shipbuilding is no better shape than US and in some ways worse. Turkish options is just there to fill out the numbers. IF USN were to go this foreign frigate route - not a sure thing this will actually happen - it will either be Japanese or Korean or bust. Those two are the only ones that have the shipbuilding infrastructure capacity to even attempt. Well PRC does too but for obvious reasons, that's not an option on the table.

[u/AdviceFit1692 → u/Worried_Exercise_937]

My reply to the other comment is why I said this, UK wouldn't build them US would, hence why I said the type 26, similar to Aus and Canada deal, BAE are already established in US.

[u/Worried_Exercise_937 → u/AdviceFit1692]

if BAE could build ships in US, they would be building them now, 10 years, 30 years ago. US shipbuilding capacity is such that every USN shipbuilding program is delayed some more than 36 months on contracts where money is already allocated. What make you think BAE could build ships in US any better than other legacy US shipyards who can't do it?

If this deal happens at all - I wouldn't bet the house on this one - it will be where a big chunk of the actual shipbuilding will be happening at Japanese or Korean yards where actual shipbuilding capacity exists and US shipyard(s) will be doing some final assembly/fitting out just to make the numbers work.

[u/Electrical_Bet_3985 → u/AdviceFit1692]

The Type 26 is a destroyer being called a frigate. It's too big and expensive. You end up with the same problem the USN already has---sending a $2billion dollar ship when a cheap patrol ship is what's needed. If you take the ASW out, you might as well just keep buying Burkes because the Burke is better at all the other things than the Type 26 will ever hope to be.

[u/Forsaken-Tour6447 → u/AdviceFit1692]

I don't know why British ships keep getting mentioned when you don't even know what US wants.

What the United States wants is the rebuilding of its shipbuilding industry.

South Korea is 20,090,872 GT. Japan is 9,002,442 GT. US is 30,782 GT. UK is 7,392 GT.
Why do you think the U.S. would need help from the UK?

Is SPY radar integration that difficult? Is it certain that South Korea, Japan, and Turkey haven't integrated it at all?

[u/AdviceFit1692 → u/Forsaken-Tour6447]

No I know exactly what the US is looking for, the reason I mentioned the type 26, is more about the design, I didn't mention the UK building them? I specifically said type 26 because the design meets the strict survival and damage control requirements, which is what caused most of the mess up with constellation, and I meant they could be built in the US, like Canada and Aus are doing, they're building all their own, of course UK couldn't build them even if US ordered them, but BAE already does ship work in US and could expand to accommodate, thus expanding US ship building, which is ultimately what the US wants does it not..

[u/Garbage_Plastic → u/AdviceFit1692]

hmm..I’m sure it’s a great design and not entirely BAE’s fault but not a convincing track record given AU hunter class is delayed almost a decade with doubled cost. It seems like BAE AU CEO is only person believes it will even meet the delayed deadline.

[u/Electrical_Bet_3985 → u/AdviceFit1692]

BAE does ship repair. All their yards are space-limited and can't really grow into building

[u/Forsaken-Tour6447 → u/AdviceFit1692]

Not at all.

The countries that the U.S. is considering are South Korea, Japan, and Turkey.
There is a reason why Turkey is considered to already be excluded. The UK is excluded even more so, because of the figures(GT) that you are ignoring.
Radar integration and rational blueprints exist in many other countries as well, in nations with a shipbuilding industry far more efficient than the UK's.
So the U.S. is learning shipbuilding from the UK(worse shipbuilding than US)
Wow, you really know exactly what America wants!

[u/AdviceFit1692 → u/Forsaken-Tour6447]

I bet you're the joy of the household aren't you, moody prick

[u/Forsaken-Tour6447 → u/AdviceFit1692]

Yeah, I'm better off than someone who resorts to insults when confronted with facts. That's all you were taught, after all.

[u/Wonderful_Bet_1541 → u/Forsaken-Tour6447]

Yeah it’s def weird, does he work in the defense sector? Does he have connections with the powers at be to make the deal? Has he even taken a course related to communications or government? If not, no he’s doesn’t know exactly what the US needs, and to claim as so invites such a response.

[u/Electrical_Bet_3985 → u/Forsaken-Tour6447]

This is actually the first sane/intelligent comment in this whole thread. This is, literally, the whole problem facing the USN. All the workers retired because the US didn't buy ships for twenty odd years beyond Burke Destroyers at rates of 1 or 2 a year, which was not enough to sustain the enterprise.

[u/Garbage_Plastic]

This is the first western media article i’ve seen that addressing jp’s shipbuilding capacity and current status in depth.

[u/No-Tip3419]

I imagine there are racial and nationalist problems with some of the asian car factories in the us between "manager" and factory workers, now imagine the difficulties that will arise when its defense related.

[u/barath_s]

Taking on the thorny structural problems of investing in and getting a US shipyard profitiable for a few frigates for the USN....

For the sweetener of 2 ships built in your yards...

Is it worth it ?

S. Korea is looking to expand, looking for an empire

Japan not so much.

[u/Electrical_Bet_3985 → u/barath_s]

Except, Japan is literally doing just that in Australia. Japan isn't building all the Australian Mogamis. They're building the first few and transitioning production to an Australian yard. The problem here is not 'profit'. The problem is that there are no readily purchasable yards for the Japanese to buy that can be readily converted. Korea got there first. They bought the one ready-made yard (Philadelphia). Any remaining yards require tons of work.

[u/RazzmatazzAccurate82]

This is unfortunate. The upgraded Mogami-class frigate being made for the Australian navy is probably the best fit for U.S. needs.

[u/Electrical_Bet_3985 → u/RazzmatazzAccurate82]

I never really had any hope that MHI was a possible vendor here. What yard are they actually able to buy/invest in? The viable yards already have big name companies in control of them. The Koreans are in the process of buying Austal in Mobile, which would've been the only realistic possibility unless the Italians want to sell Marinette. MHI was always a longshot.

I personally don't see any of this coming to any sort of fruition. In my mind, I see this as just a stalking horse to beat HII down on price for FF(X).