Hyundai Rotem said it will introduce a new profit-sharing program and sharply expand financial support to help its partner companies grow alongside the firm.
The company said Monday it unveiled its strategy at the “2026 Hyundai Rotem Defense Co-Growth Cooperation Conference,” held March 6 at its Changwon plant in Changwon, South Gyeongsang Province. The plan focuses on supporting suppliers’ localization of parts and research and development for future advanced weapons.
The strategy is aimed at expanding access to financing and widening opportunities for technological self-reliance, Hyundai Rotem said, as part of efforts to strengthen the quality of South Korea’s defense industry ecosystem.
Attendees included local district lawmakers, representatives from 67 partner companies and Hyundai Rotem employees. In welcoming remarks, CEO Lee Yong-bae said the world is paying attention to the capabilities and role of South Korea’s defense industry amid rapidly changing international conditions. He called on Hyundai Rotem and its partners to “bind together as a community of shared destiny” and deepen mutual trust.
Hyundai Rotem said it will significantly expand financial support for partner companies starting this year. It will introduce a new “co-growth profit-sharing program” under which, when the company wins new overseas orders, it will share results with suppliers that helped improve export competitiveness.
Under the program, after a localized parts development succeeds and a first contract is signed, Hyundai Rotem will return 100% of cost savings from localization to the supplier in the contract year and 50% the following year. If transactions for the localized part or technology continue over the long term, the company said it will provide additional support by guaranteeing order volumes for the supplier.
To help suppliers raise funds, Hyundai Rotem said it expanded its “co-growth fund” to 150 billion won, more than double the previous 70 billion won. On March 6, it signed a three-way memorandum of understanding with partner companies and Shinhan Bank on “Hyundai Rotem partner company co-growth and productive financial support.” The company said it plans to support trade finance, guarantees and preferential loan rates, alongside efficient operation of the fund.
Hyundai Rotem also said it will invest 200 billion won in R&D through 2027 to support development of future advanced weapons, localization of parts and performance improvements. The scope includes next-generation manned and unmanned ground weapons platforms, aerospace, artificial intelligence and unmanned systems, as well as localization and performance upgrades of key components.
The company said it will also run technical support and training programs. It plans to form a consultative group with partner companies, universities and research institutes to facilitate technical exchanges, and to support self-reliance by linking partner proposals and business needs to government projects. Hyundai Rotem said it will expand training for partner-company employees through its technical training institute, with more than 5,600 participants expected this year.
Hyundai Rotem said it will step up efforts to prevent leaks of partner companies’ technology and personnel. It will provide expert consulting to improve security management systems, including simulated hacking and training to respond to malicious emails. When requesting technical materials from partners, the company said it will require a strengthened security system, and it will add a clause to its ethics code aimed at preventing poaching of partner-company personnel to protect key talent.
The company also reorganized to strengthen co-growth cooperation. Previously handled by the purchasing planning team under the purchasing division, the work will now be led by a newly created co-growth cooperation office directly under the purchasing division, with a co-growth cooperation team under it. The office will form a consultative body with all relevant departments and provide on-site support for partner companies’ technology and quality in coordination with the government and related agencies, Hyundai Rotem said.
A Hyundai Rotem official said the technological competitiveness of South Korea’s defense industry comes from growing together with partner companies, and the company will continue support to build a solid industrial foundation where all can grow.
* This article has been translated by AI.
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