[Yang Nak-gyu's Defence Club] KAI Next CEO... Yoon Dangsanein's Choice Is

[Image source=Yonhap News]

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] Attention is focused on the appointment of the president of Korea Aerospace Industries (KAI), which leads the aerospace industry. President-elect Yoon Suk-yeol promised the establishment of an ‘Aerospace Administration’ as a campaign pledge, and it is expected that KAI will play a leading role in this, with related corporate restructuring anticipated.

KAI was established during the Kim Dae-jung administration by consolidating deficit-ridden airlines, with the Korea Export-Import Bank, a state-run bank, as its largest shareholder. This is why it carries the label of a ‘company without an owner.’ Given this situation, the appointment of the KAI president has typically been a government patronage appointment. Such patronage appointments led to decisions made in a bureaucratic manner rather than a private enterprise style. This made government-conscious management inevitable. In particular, there have been criticisms that indiscriminate hiring of acquaintances severely damaged the organizational culture.

The first president of KAI, former president Lim In-taek, served as the 35th Minister of Transportation. The second president was former Army Chief of Staff Gil Hyung-bo. At that time, Gil was appointed president just 10 days after retiring as Army Chief of Staff, earning a reputation as a typical parachute appointment. Subsequently, presidents from bureaucratic backgrounds followed in succession. The third president was former Minister of Commerce, Industry and Energy Jeong Hae-joo, and during the Lee Myung-bak administration, the fourth president was Kim Hong-gyeong, former Deputy Minister of Industry and Resources. Under the Park Geun-hye administration, President Kim, who had more than a year left in his term, was replaced by Ha Seong-yong. When the Moon Jae-in administration took office, Kim Jo-won, a former Secretary for Public Service Discipline at the Presidential Secretariat and former Secretary General of the Board of Audit and Inspection, was appointed president.

During former president Kim Hong-gyeong’s tenure, KAI experienced serious management disruptions. Profit margins plummeted due to penalties for delays in the P-3CK patrol aircraft, delays in the delivery of Surion helicopters, and losses from the corps-level UAV project.

The same applies to former president Ha Seong-yong. Although Ha is a KAI insider and considered an internal executive, his work experience suggests he is effectively an external appointment. In 2017, the first year of the Moon Jae-in administration, Ha was targeted in the first major corruption investigation and the first defense industry corruption case of the new government.

The investigation was directly led by Yoon Suk-yeol, then the head of the Seoul Central District Prosecutors’ Office. The prosecution announced plans to investigate Ha’s corruption allegations along with overall defense industry corruption. However, the investigation ended inconclusively. The prosecution applied 11 charges including accounting fraud and embezzlement against former president Ha and sought a 12-year prison sentence. Recently, most charges were acquitted, and a suspended sentence was handed down. This situation inevitably makes KAI uncomfortable for President-elect Yoon.

President-elect Yoon’s discomfort was evident during the presidential campaign. When the KAI labor union reportedly supported presidential candidate Lee Jae-myung, Yoon did not visit KAI despite campaigning in the Sacheon area. In contrast, candidate Lee Jae-myung visited KAI and wrote in the guestbook, “The core of future advanced industries. The center of the aerospace industry. Supporting KAI.”

President-elect Yoon Suk-yeol pledged to establish the Aerospace Administration during his candidacy. He proposed the ‘establishment of the Aerospace Administration’ as a pledge for the Gyeongnam region and repeatedly emphasized it during his campaign in Jinju. The center of the Aerospace Administration must inevitably be KAI. There are voices calling for the thorough exclusion of public officials and politicians who line up for the KAI presidency or the head of the Aerospace Administration. A professional manager is necessary to truly open the aerospace era.

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