Send to

Hyundai Rotem blasted for sloppy handling of U.S. rail car project

Jan. 17, 2013 - 17:38 By 윤민식

Hyundai Rotem was pounded by a U.S.-based public transportation agency for failing to follow through with a $190 million contract for providing new commuter rail cars.

The U.S. company -- the Massachusetts Bay Transportation Authority, or MBTA -- has consequently threatened to terminate the contract in case of further delays.

According to a letter sent to Hyundai Rotem on Dec. 21 last year from Jonathan Davis, the MBTA’s chief financial officer, obtained by The Boston Globe, the procurement contract with the Korean company has reached “a point of crisis.”

Davis said he had written to convey his “profound disappointment for Hyundai Rotem’s seemingly lack of commitment to improve its chronically unsatisfactory performance.”

He also said that due to Hyundai Rotem’s “inaction, inattentiveness and generally poor performance,” the MBTA would terminate the contract if the Korean company fails to respond and take corrective measures by Jan. 11, which was last Friday. 

Hyundai Rotem, an arm of the Hyundai Motor Group specializing in building mostly trains, ground weapon systems and vehicles, in 2008 signed a contract with the MBTA to replace part of the company’s aging rail cars with up to 75 modern coaches by October 2010.

Only four of the coaches -- said to be undergoing testing -- reached the MBTA just two months ago.

In that waiting period, the MBTA had been forced to renegotiate the deal with Hyundai Rotem to push back the delivery date in return for discounts.

The quality of the cars has also become an issue with the MBTA, which said the workmanship has degraded “at an alarming rate” at both the Changwon factory in Korea and the Weccacoe facility of Hyundai Rotem USA.

Wire bundles, for example, were drilled through in multiple locations on a number of cars, the MBTA said, lamenting that there was “no apparent effort on behalf of Hyundai Rotem to remedy the myriad causes for the overall lack of quality.”

Nonetheless, the U.S. agency said the Korean company has recently demanded payment on an unfulfilled milestone, which has caused the MBTA up to $4 million in damages.

After the letter was sent, Hyundai Rotem’s Cho Sang-whui, president and CEO of Hyundai Rotem USA, and Kim Jong-han, executive vice president of procurement at Hyundai Rotem, met the MBTA general manager on Jan. 11, the final day of the deadline issued by the U.S. agency.

Hyundai Rotem said the MBTA is also at fault, adding that despite the letter, the MBTA has no intention of terminating the contract, and that the two sides plan to amicably settle the matter.

Some progress has been made since the fallout, the MBTA said in a statement, although “certain areas of concern remain.”

The agency also said, “It’s important that HRU’s new leadership team not only understand the procurement’s ongoing issues, but also take the corrective actions necessary to address the shortfalls.”

Hyundai Rotem has over the past decade actively wooed the U.S. with promises of low prices and advanced technology.

It has four contracts in the U.S., including the one with the MBTA. 

Inexperience and miscalculated business plans are cited as other causes behind the Korean company’s delay. 

Hyundai Rotem, while working on the assembly of the MBTA cars, is still in the middle of completing an order for 120 coaches for the Southeastern Pennsylvania Transportation Authority. 

By Kim Ji-hyun and Lee Ji-yoon

( (

<관련 한글 기사>

현대로템, 美철도 사업 "위기"에 봉착

현대로템이 진행중인 약 2천억원 규모의 미국 보스톤 메사추세츠 베이 지역 열차 제작사업이 취소될 위기에 처했다.

발주처인 메사추세츠 베이 교통공사는 현대로템이 객차 납품 기일을 못 맞추고 있으며 심지어 초기에 납품한 일부 차량 등에서 많은 결함을 발견되는 등 문제가 심각할 지경에 이르렀다고 밝혔다.

메사추세츠 베이 교통공사 CFO인 조너단 데이비스는 이와 관련 12월 21일자로 현대로템의 한규환 부회장에게 보낸 편지에서 이번 계약 건이 “위기에 놓여있다” 말하면서 향후 21일 이내에 대책을 마련하지 못하면 불가피하게 계약을 종료 할 수 밖에 없다고 밝혔다.

특히 메사추세츠 베이 교통공사는 현대로템측이 이러한 상황을 바꿔보려는 노력조차 하지 않고 있다면서 큰 실망감을 나타냈다.

지난 2008년 4월에 체결된 이 계약에 따르면 현대로템은 메사추세츠 베이교통공사와 1억7천만 달러 규모의 교외선 객차 75대를 제작, 납품 하기로 되어있다.

하지만 메사추세츠 베이 교통공사에 따르면 2010년 10월까지 보내주기로 한 객차 75대중 4대만이 인도되었으며 그마저도 2012년 11월에 이루어졌다고 한다.

미국측은 인도된 객차들도 부실하게 만들어졌다며 분통을 터뜨리고 있다. 마무리가 미흡한 상태로 인도되었으며 안전에도 심각한 영향을 미칠 수 있다고 우려하고 있다.

상황이 이러한데도, 현대로템측은 오히려 미측에 선 대금지급을 요청하기도 했다고 메사추세츠 베이 교통공사는 밝혔다.

미측에서 계약 파기 시한으로 제시했던 1월 11일에 현대로템측 본사와 현지 임원들이 교통당국 대표들과 만나서 이러한 문제들을 협의했지만 아직도 해결해야 할 문제가 남아있다고 교통공사 관계자는 밝혔다.

한편, 현대로템 측은 메사추세츠 베이 교통공사가 실제로 계약을 취소할 목적은 아니며, 편지도 압박용 전술의 일환으로 해석했다. 또한, 양측이 성실한 자세로 협의에 임하고 있으며, 향후에 충분히 원만하게 해결할 수 있다고 전했다. (코리아헤럴드)