HD Hyundai-Hanwha rivalry leads to conflict between municipalities

Hanwha Ocean's conceptual design of the KDDX-class destroyer is on display during the Korea Institute of Military Science and Technology's symposium at the International Convention Center Jeju, Wednesday. Courtesy of Hanwha Ocean

The Geoje city government is actively opposing HD Hyundai Heavy Industries (HHI) to help Hanwha Ocean secure a contract for the Republic of Korea Navy’s next-generation destroyers. Geoje Island, located in the southeast, is home to Hanwha Ocean’s shipyard.

Geoje Mayor Park Jong-woo urged the central government, Thursday, to select Hanwha Ocean as the company to build the KDDX-class destroyers. He cited the convictions of former HD HHI employees for stealing warship technologies from Daewoo Shipbuilding & Marine Engineering, now renamed following its acquisition by Hanwha last year.

“It is nonsense to select HD HHI as the only company to handle the KDDX project, considering the shipbuilder’s theft of military secrets from Hanwha Ocean,” the mayor said in a statement.

He also called for a competitive bidding process to select multiple companies as participants in the KDDX project, instead of a sole-source or non-competitive procurement contract that appears to favor HD HHI.

His remarks came about a month after the Ulsan city government pledged to make every effort to support HD HHI continue 추천 working on the KDDX project. Ulsan claimed that the central government should sign a sole-source contract with the shipbuilder, as it was selected previously as the company in charge of the basic design of the destroyers.

“HD HHI is the nation’s leading defense systems exporter and plays a major role in the regional economy,” Ulsan Mayor Kim Doo-gyeom said last month.

Lawmakers representing the constituents of the two southeastern cities have already supported the shipbuilders located in each of their respective districts.

In particular, lawmakers of the ruling People Power Party (PPP) have been divided over this issue, as Geoje is the constituency of Rep. Seo Il-jun, of the ruling party, and four out of six lawmakers representing the constituents of Ulsan belong to the PPP.

Amid the intensifying political dispute, the legal battle between HD Hyundai and Hanwha continues.

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