Will Korea Aerospace Industries Be Privatized?

Korea Aerospace Industries (KAI) has played a pivotal role in developing South Korea’s domestic technical capacity for aircraft manufacturing. KAI has license-produced F-16 fighter jets since the 1980s and jointly developed the T-50 Golden Eagle training jet with Lockheed Martin. It also has collaborated with General Electric to develop and produce jet engines

The South Korean government — through the Export-Import Bank of South Korea — owns the majority stake in KAI. Privatization of the partly state-owned company has been a recurring topic for over a decade as various conglomerates express interest in an acquisition deal.Firms like Korean Air, Hyundai Motor and Hanwha Defense have previously floated acquiring KAI, to much public interest.

The latest rumor once again surrounds Hanwha, especially after it acquired Daewoo Shipbuilding and Marine Engineering in December 2022. Hanwha — as South Korea’s largest defense firm — has vowed to be the “Korean version of Lockheed Martin” and seeks to build on a successful year exporting howitzers and tanks to Egypt and Poland.

There is a good reason why there is so much prolonged attention on privatizing KAI: the debate surrounding the KAI acquisition represents the fundamental questions about the future of “K-Defense” as it comes off its most commercially successful year.

Read the full article on The Diplomat.