KAI faces cost-cutting pressure for T-X program: KAI chief

By Won Ho-jung
  • Published : Nov 10, 2017 - 16:32
  • Updated : Nov 10, 2017 - 16:32
Korea Aerospace Industries is facing pressure to continue cutting costs in its joint bid for the US Air Force’s T-X program together with Lockheed Martin, according to the company’s chief executive Friday.

“In effect, the bidding has come down to Lockheed Martin and Boeing. We are a partner of Lockheed Martin,” newly appointed KAI chief Kim Jo-won told reporters. “We are continually discussing ways to cut costs so that we can offer a lower bid.” 

KAI President Kim Jo-won (KAI)

However, Kim said that after a certain point it would become necessary for KAI’s partnering companies to “make sacrifices” to cut costs even further.
Lockheed Martin and KAI are jointly bidding with the T-50A, an upgraded version of the T-50 Golden Eagles used by the Korean Air Force, to replace the US Air Force’s Northrop T-38 Talon fleets. They are up against Boeing and Saab, who are said to be pursuing aggressive price cuts in their bidding.

The bid is one of many challenges lying ahead for Kim, who is just 12 working days into his term. Kim replaced Ha Sung-yong, who stepped down amid allegations of corruption including inflating expenses.

Kim said that he believed transparency was the most important factor in changing perceptions about KAI as a corrupt institution, and that he would ensure transparency in the future by consulting outside experts in upcoming reforms. 

With those changes, Kim said KAI will “undoubtedly” grow to become one of the top five aerospace companies in the world by 2030. 

By Won Ho-jung (