Major domestic defense industry corporations said they need special extended work hours, citing difficulties from the 52-hour workweek, in a message to the Ministry of Employment and Labor (MOEL). With orders piling up thanks to several years of strong defense exports, they said it is hard to meet deadlines because of on-site labor shortages and work-hour limits. But the MOEL is negative about allowing it. The ministry said it already granted exceptions to defense corporations over the past three years, and "making special measures routine" would be a burden.
According to the defense industry on the 15th, major defense conglomerates and small and midsize corporations such as Hanwha Aerospace(012450), Hyundai Rotem(064350), and Korea Aerospace Industries (KAI) met with the MOEL in Seoul on the 13th and stressed the need for special extended work hours. With domestic and overseas deliveries overlapping, they said they cannot meet deadlines under the 52-hour workweek. The industry argued that extended work by employees is needed even if it means paying 1.5 times the regular wage.
The special extended work system allows extended work beyond the 12-hour weekly overtime limit for up to three months, with employee consent and approval from the Minister of the MOEL, when unavoidable special circumstances arise. Corporations can work extended hours for three months once a year by simply filing with a regional labor office. If additional extended work is needed, they use the special extended work system, which, upon approval, allows up to six months of 64-hour workweeks.
◇ Defense industry: "Even with more staff, it's hard to keep up"
Under the Labor Standards Act, special circumstances that allow special extended work include disasters, protection of human life, unexpected situations, surges in workload, and research and development. The basis for defense corporations' request is a surge in workload. Backlogs of orders at defense corporations have risen sharply over the past three years. The defense order backlogs of Hanwha Aerospace, LIG Defense&Aerospace(079550), Hyundai Rotem, and KAI increased to 13.3526 trillion won in 2023, 17.8482 trillion won in 2024, and 21.029 trillion won in 2025. An order backlog means work that must be processed.
Defense conglomerates have continued hiring over the past three years as workloads grew. According to a sustainability report released last month, the total number of employees at the four defense companies was 20,200 in 2023, 21,877 in 2024, and 23,600 in 2025. They increased headcount by about 8% each year. By distribution, some corporations even increased the number of managers, but the numbers of general staff and mid-level managers grew the most. That means they expanded junior hiring.
Even so, the defense industry's chronic labor shortage continues. In defense materiel production, worker proficiency is cited as a key competitive edge. The industry said that even with additional hires, it is hard to perform immediately given the sector's characteristics. At least two years of training is essential, making it difficult to secure skilled workers in a short period.
Small and midsize corporations are said to be suffering even worse shortages. They said that after recruiting with difficulty and training over time, workers soon move to conglomerates or quit midstream. A manager at a small defense corporation said, "After three to four years of learning the job, they move to a conglomerate," and added, "On-site labor gaps are inevitable, and to meet the requirements of the prime contractors, those who remain have to work more."
◇ A fourth straight approval would be a 'burden' for the MOEL
The MOEL, meanwhile, was said to have expressed in the meeting that allowing special extended work is burdensome. It already approved special extended work for the defense industry over the past three years, and allowing it for a fourth straight year could look like favoritism, it said. The MOEL approved special extended work for manufacturing such as autos and shipbuilding during the COVID-19 period, given the unusual circumstances, but over the past three years there have been none outside defense, it said.
Analysts say that beyond reasons such as longer work hours, the MOEL's hesitation also reflects concern about a heavier defense budget. The Defense Acquisition Program Administration calculates costs for defense corporations' deliveries to the military based on actual expenses incurred. This is called "actual incurred cost," meaning a principle of calculating and compensating costs based on expenses actually incurred. Because defense is a state-led industry with the government as the sole customer, the system was devised to guarantee corporations a minimum profit.
The key metric in cost calculation is labor cost. As defense corporation employees work more hours, the costs the government must guarantee also rise. While general manufacturing cuts expense by reducing labor through automation and unmanned systems, in defense, beginning automation effectively reduces the calculated cost. This is why critics say the current cost calculation system actually hinders defense companies from improving productivity.
A military official said, "Domestic defense corporations know the need for automation, and some processes are partially automated," but added, "However, if exceptions were applied for the past three years, defense corporations should also have found ways to increase productivity."
Meanwhile, the meeting held the previous day was said to be a session to review the MOEL's and the industry's views on special extended work. No formal application procedures for special extended work were carried out. The Korea Defense Industry Association will first gather opinions by arranging a session next month in Changwon, South Gyeongsang, to explain available alternatives such as the flexible work-hour system to defense companies there. After that, each defense corporation is expected to decide whether to apply for special extended work.