Samsung, Daewoo and Hyundai Team in Aerospace as Koreans Restructure

South Korea has responded to world economic pressures by beginning discussions to consolidate its aerospace industry around economies of scale in civil and military aircraft, and engine production programs

"The Korean government and industries have made proactive decisions to restructure Korea's aerospace industries to withstand current economic difficulties and to achieve world-class competitiveness," said Samsung Aerospace president and CEO Hai Kyoo Lee. "In order to pursue this rationalization and to further exploit future niche markets, we are currently working industry restructuring under the guidance of the Korean government.

In early September, Korean giants Samsung, Daewoo and Hyundai agreed to establish a separate, single legal entity to consolidate their aircraft business and attract foreign investment.

Samsung's participation in such a restructuring would be significant due to its numerous partnerships with Western manufacturers. In addition to being prime contractor for the Korea Fighter Program (KFP), as well as the Advanced Trainer and Light Combat Aircraft, Samsung is a partner with Lockheed Martin on the development program for the KTX-2 jet trainer and with Bell Helicopter on co-development of the SB427 helicopter.

"The new legal entity will be able to establish the economy of scale in most of its businesses," said Lee, "and the systematic industry development and achievement of synergy and competitiveness will be possible through the consolidation of each company's facilities and manpower.

"Samsung Aerospace is proactively participating in this restructuring effort, and will hand over its KFP, KTX-2, aerostructures programs and related resources to this new entity," Lee said. "Samsung will then concentrate its business effort in the engine and ground equipment programs."