Due to repeated delays in South Korea’s next-generation destroyer (KDDX) project, the HD Hyundai Heavy Industries union (hereinafter referred to as the union) has strongly protested the project’s continued chaotic competition process.
Recently, the union stated via social media: “The government and the Defense Acquisition Program Administration’s recent wavering approach to advancing the KDDX project has pushed employment insecurity among shipbuilding workers to an extreme level. Past illegal actions are being conflated with ‘workers’ right to survive today,’ while policy confusion persists. Throughout this process, the project has exhibited serious fairness issues favoring specific companies.”
The union’s statement came in response to recent remarks made by Lee Jae-myung, leader of South Korea’s main opposition Democratic Party, regarding corruption in the country’s defense industry: “It is absurd that some have even proposed adding enterprises penalized for leaking military secrets to the list of designated contractors; such cases must be subject to stringent scrutiny.”
The prevailing interpretation within South Korea’s shipbuilding industry is that President Lee Jae-myung’s remarks directly targeted HD Hyundai Heavy Industries, which had previously lost security points due to a military classified information leak incident. Nine employees of HD Hyundai Heavy Industries were convicted for leaking military secrets related to the KDDX project. By convention, HD Hyundai Heavy Industries, having completed the basic design, should have been selected as the project contractor. However, due to objections raised by Hanwha Ocean, the bidding process has been delayed for nearly two years.
Regarding past incidents of confidential information leaks, the labor union emphasized: “This matter has been concluded through judicial rulings and penalties. HD Hyundai Heavy Industries workers are safeguarding the technology and quality of Korea’s shipbuilding industry, and are unrelated to historical violations. Policy confusion should not undermine the job security of frontline workers.”
The union specifically pointed out that although the KDDX project is a core initiative directly impacting shipyard employment, key decisions regarding the project’s main body, design approach, and order allocation remain opaque and subject to change.
The union has put forward four demands: Punish illegal acts in accordance with the law, but do not infringe upon the right to livelihood of frontline workers; Eliminate project structures that benefit only specific companies; Government agencies and the Defense Acquisition Program Administration should maintain consistent policy direction; Cease secret decision-making processes that exclude union participation.
Additionally, the union warned: “If the chaos surrounding the KDDX project persists, it could destabilize the entire ecosystem of South Korea’s shipbuilding industry. We will take decisive measures to defend our members’ livelihoods if necessary.”
It is understood that South Korea’s KDDX project is valued at approximately 7.8 trillion won. The plan is to construct and deploy six 6,000-ton class destroyers by 2030, utilizing entirely domestically developed Korean technology from hull to weapon systems. Upon completion, South Korea will become the sixth country in the world to achieve full indigenous production of destroyers.
The project is being advanced in phases: conceptual design, basic design, detailed design, construction of the lead ship, and construction of subsequent ships. The conceptual design was completed by Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) in 2012, while Hyundai Heavy Industries completed the basic design by the end of 2023.
In December 2023, the Defense Acquisition Program Administration of South Korea began selecting contractors for the detailed design and construction of the lead ship (Ship No. 1) phase of the KDDX project, with plans to complete the selection in 2024. However, due to a conflict of interest between Hyundai Heavy Industries and Hanwha Ocean, the project has been delayed by nearly two years.
At present, HD Hyundai Heavy Industries and Hanwha Ocean are competing for the bid on South Korea’s KDDX project. The Defense Acquisition Program Administration (DAPA) plans to convene the Defense Acquisition Promotion Committee this week to determine the final project approach from among three models: designated contract, competitive bidding, and joint design.