KAI Union: "Hanwha Must Take Responsibility for LAH Engine Defects Before Questioning Performance"

Engine defects delay helicopter deliveries, hurting earnings, union claims

The Korea Aerospace Industries (KAI) labor union urged Hanwha Aerospace to explain its responsibility for disruptions in the supply of engines for the Light Armed Helicopter (LAH) before criticizing KAI's business performance.

Members of the Korea Aerospace Industries (KAI) labor union hold a rally at the fountain in front of Cheong Wa Dae in Seoul on the 14th, opposing Hanwha's bid to acquire KAI and calling on the government to state its position. Yonhap News.

In a statement issued on October 27, the KAI union said, "Before discussing KAI's management capabilities, Hanwha must first explain its responsibility for the quality and delivery schedule of the engines it assembled and supplied."

According to the union, corrosion and cracking were found in LAH engines this year. The engines are assembled and supplied in South Korea by Hanwha Aerospace, using technology from France's Safran.

Citing a securities firm's analysis, the union said it estimated that deliveries of five of the six LAH helicopters scheduled for delivery in the second quarter of this year were delayed due to defects in engine components, postponing the recognition of about 130 billion won in revenue and about 18 billion won in operating profit.

The union emphasized that KAI has also undertaken projects with low profitability in the interests of national security and technological self-reliance. According to documents submitted to the National Assembly, operating losses amounted to about 64 billion won on the LAH system development project, about 212.4 billion won on the utility helicopter project, and 11.7 billion won on Gyeonggi Province's dedicated emergency medical helicopter project.

The union argued, "If Hanwha, a supplier, exerts influence over KAI's management, it could become difficult to objectively determine responsibility for component quality and delivery issues. Do not use KAI's short-term results as a justification for securing management control while ignoring supply chain disruptions and the burden of carrying out national projects."

The union also called on Hanwha Aerospace to disclose the cause of the LAH engine defects, its schedule for normalizing deliveries, and measures to prevent a recurrence. It urged the government to maintain the basis for KAI's independent management.

This content was produced with the assistance of AI translation services.