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The rise of South Korea’s weapons business

politico.com

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Re: The rise of South Korea’s weapons business

#51

Post by Loic »

ReptileMan wrote: post #41
thephyber wrote: post #39

Earlier quoted context omitted.

Do you have any evidence of this? Also “and margins” seems like a stupid thing to add. Margins are high during peacetime and wartime alike. And it’s not parallel to bribes / kickbacks which are corrupt and illegal. Margins are the natural outcome of capitalism + monopoly. Having S Korean competition means those margins would likely drop over time.

>Do you have any evidence of this? I have been advisor to some people signing the deals. I would say that depending on the project in my slice of the industry at least 25-30% were outright redistributed to various stakeholders.

Confirmed. The second industry with such redistribution is oil and gas, 5-15%.

My figures are from ~2005.

Re: The rise of South Korea’s weapons business

#52

Post by throwaway27448 »

thephyber wrote: post #39
ReptileMan wrote: post #19

Earlier quoted context omitted.

The majority of military hardware costs are bribes, kickbacks and margins. Nobody thinks that they will fight a real war in which they will need a lot of hardware. If the US or Germany get in situation they need thousands of those - I guess their cost will fall to under 1M.

Do you have any evidence of this? Also “and margins” seems like a stupid thing to add. Margins are high during peacetime and wartime alike. And it’s not parallel to bribes / kickbacks which are corrupt and illegal. Margins are the natural outcome of capitalism + monopoly. Having S Korean competition means those margins would likely drop over time.

> Margins are high during peacetime and wartime alike

Countries with high margins during wartime don't typically win wars against peer powers. Cf nazi germany vs the soviet union. This is typically a luxury you see when rich countries fight poor ones (in absolute terms, including capital in the form of production capacity and tech IP/know-how)

Re: The rise of South Korea’s weapons business

#54

Post by gaiagraphia »

Loic wrote: post #51
ReptileMan wrote: post #41

Earlier quoted context omitted.

>Do you have any evidence of this? I have been advisor to some people signing the deals. I would say that depending on the project in my slice of the industry at least 25-30% were outright redistributed to various stakeholders.

Confirmed. The second industry with such redistribution is oil and gas, 5-15%. My figures are from ~2005.

Fun stories of hearing about key equipment gets caught up in Libyan customs. Weeks and weeks of meeting various officials, learning about each others families, drinking tea, etc, before 'the cost of compliance' is finally raised.

Re: The rise of South Korea’s weapons business

#55

Post by graeme »

0cf8612b2e1e wrote: post #33
graeme wrote: post #13

Earlier quoted context omitted.

>The US didn’t stop its offensive because of Iranian weapons. I would say they did. Gulf countries ran out of missile and drone defenses and a lot of infrastructure was getting hit. Long run loss of capacity here would be worse than temporary strait closure and there were a lot of assets left to hit.

There has already been significant infrastructure capacity destruction. Hard to get an inventory on exactly what, but even if there were an actual peace agreement with full strait traversal, it will be years to resume previous production numbers. Qatar lost LNG trains and facilities which are estimated at 3-5 years to replace. Just restoring shut in oil wells will take months. It is unlikely all wells will ever reach…

Yes that's correct, thank you, I see my comment implied otherwise.

There had also been Iranian strikes on desalination plants and near the end strikes on Saudi Arabia's red sea assets. I believe these were very convincing.

Re: The rise of South Korea’s weapons business

#56

Post by trillic »

mohamedkoubaa wrote: post #24
ReptileMan wrote: post #19

Earlier quoted context omitted.

The majority of military hardware costs are bribes, kickbacks and margins. Nobody thinks that they will fight a real war in which they will need a lot of hardware. If the US or Germany get in situation they need thousands of those - I guess their cost will fall to under 1M.

If the US is ever in that situation again we won't be measuring cost of any manufacturable thing in dollars

Correct it’ll be in Yen

Re: The rise of South Korea’s weapons business

#57

Post by overfeed »

petesergeant wrote: post #49
dredmorbius wrote: post #20

Earlier quoted context omitted.

Cost is a factor, and a significant factor, but not the only one. Flip-side of cost is effectiveness , and it would be interesting to see real-world data on the accuracy, reliability, and longevity of Korean weapons systems in active combat. I suspect the Koreans are also anxious to see this given their own geopolitical situation and northern neighbour. The article doesn't go here either. It does, correctly IMO, focu…

> I suspect ROK counterartillery systems are well developed, and that given the effectiveness of drones in recent years and the likelihood PRK might rely on these that there are, or soon will be, effective countermeasures against them. I mean the obvious problem here is that they are completely untested in combat. Surprised there haven’t been some sweetheart deals to get these into Ukrainian hands

> I mean the obvious problem here is that they are completely untested in combat

The article mentions interceptors deployed to the UAE that recently successfully hit 29 Iranian drones out of 30.

Meta: this entire comment-chain accuses the article of not focusing on "the real reason" for success, but the article touches on everything mentioned: cost, IP sharing, IRL performance, and more (fast turn-around) are all mentioned in the article.

Re: The rise of South Korea’s weapons business

#58

Post by overfeed »

thephyber wrote: post #39
ReptileMan wrote: post #19

Earlier quoted context omitted.

The majority of military hardware costs are bribes, kickbacks and margins. Nobody thinks that they will fight a real war in which they will need a lot of hardware. If the US or Germany get in situation they need thousands of those - I guess their cost will fall to under 1M.

Do you have any evidence of this? Also “and margins” seems like a stupid thing to add. Margins are high during peacetime and wartime alike. And it’s not parallel to bribes / kickbacks which are corrupt and illegal. Margins are the natural outcome of capitalism + monopoly. Having S Korean competition means those margins would likely drop over time.

> Margins are high during peacetime and wartime alike.

Perhaps when fighting foreign jaunts against a minnow. Preserving high margins in an grinding, existential war against a peer would be considered anything from unpatriotic, to outright illegal war profiteering, and carries a real risk of the shareholders losing control and/or ownership of the organization through various war-time instruments.

Re: The rise of South Korea’s weapons business

#59

Post by dredmorbius »

overfeed wrote: post #57
petesergeant wrote: post #49

Earlier quoted context omitted.

> I suspect ROK counterartillery systems are well developed, and that given the effectiveness of drones in recent years and the likelihood PRK might rely on these that there are, or soon will be, effective countermeasures against them. I mean the obvious problem here is that they are completely untested in combat. Surprised there haven’t been some sweetheart deals to get these into Ukrainian hands

> I mean the obvious problem here is that they are completely untested in combat The article mentions interceptors deployed to the UAE that recently successfully hit 29 Iranian drones out of 30. Meta: this entire comment-chain accuses the article of not focusing on "the real reason" for success, but the article touches on everything mentioned: cost, IP sharing, IRL performance, and more (fast turn-around) are all men…

The thread head (https://news.ycombinator.com/item?id=48612438>) makes the accusation of omission, but specifically as regards cost.

In my own initial response, I explicitly note "It does, correctly IMO, focus on..." and continue to list several of the issues raised, in addition to expanding both on those and adding others. Subsequent discussion seems to evolve from there, no longer anchored to the root.

Overall, the article isn't great insofar as it omits or demphasises some factors; but no, it's not obtusely bad or incomplete either. And your own characterisation of the discussion as a whole is itself inaccurate.

Re: The rise of South Korea’s weapons business

#60

Post by jedkkrkt »

dredmorbius wrote: post #20
tristanj wrote: post #10

This article uses so many words to focus on the political reasons, but completely ignores the primary driver: Cost. Korean weapons systems are 40-60% cheaper than their American counterparts. The Korean K9 Thunder 155mm self-propelled howitzer costs $3.5 to $4 million per unit. For comparison, the American M109A7 Paladin costs around $8 million. The German PzH 2000 runs approximately $7 to $8 million. The K239 Chunmo…

Cost is a factor, and a significant factor, but not the only one. Flip-side of cost is effectiveness , and it would be interesting to see real-world data on the accuracy, reliability, and longevity of Korean weapons systems in active combat. I suspect the Koreans are also anxious to see this given their own geopolitical situation and northern neighbour. The article doesn't go here either. It does, correctly IMO, focu…

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