Under these conditions, Koreans will be unable to produce tanks as they do not understand the structure and technology of the tank even with prototypes in hand. However, Hyundai Precision Industry, which planned to produce the tank at its new factory, was excluded from direct involvement in designing the tank, and it was the biggest problem since Koreans had never made tanks before. On the other hand, South Korea benefitted from the development cost of the cooperation with Chrysler South Korea paid $60 million for the prototype development, far below the $700 million spent on M1 Abrams. In addition, South Korea will have the rights on, and be limited to, the technologies developed uniquely with the money provided by South Korea, while Chrysler also claims the rights to use them in the future. Also, 44 designated parts (gradually reduced to 14) cannot be changed without United States approval, and some parts must be purchased periodically. Exporting of K1 is strictly controlled and needs authorization from the United States as many sensitive systems are installed, and South Korea requires to pay a royalty to Chrysler Defense. According to the MOU, the United States will provide its state-of-art Special Armor Package (SAP), in which the material and protection are identical to the M1 Abrams while limiting Koreans from access until the installation due to national security reasons. Ä«etween 19, several MOUs were signed between the two nations, mostly regarding intellectual rights and royalty payments. Eventually, the American design was chosen, and a memorandum of understanding (MOU) was signed on 6 July 1978 to supply two prototypes, and the executive contract was signed on 1 December 1978. This time, Chrysler offered a new tank based on the newest M1 Abrams. In 1977, as expected, Chrysler Defense showed interest in the Korean tank project after its engineers became available and wanted to generate more profit after the development of the M1 Abrams. Both South Korea and West Germany kept the cooperation in secret because the two nations believed that the United States would intervene once the information had been leaked. Because the American offer was an outdated design, South Korea then contacted KraussMaffei of West Germany to receive technical assistance, and KraussMaffei offered a unique tank design based on Leopard 1. South Korea first asked Chrysler Defense for a solution to acquire a better tank, and Chrysler suggested purchasing the M60A3 or producing it in South Korea. Not satisfied with the M48 Patton upgrade, South Korea began looking for a new tank that could overwhelm every North Korean counterpart as the existence of the T-62 and its manufacturing facility were confirmed by satellite images in 1976. The chairman was shocked after learning about his misunderstanding from president's secretary as he was leaving the building. Chung Ju-yung, thinking that the president asked for a train factory, promised to build one. Around the same time, Park Chung-hee ordered the development of a domestic tank and personally summoned Chung Ju-yung, the founder of Hyundai Group, to recommend building a tank factory. Korean engineers were sent to the United States Army Depot in Alabama for training, such as armor cast steel welding and production, precision manufacturing, assembling skills, quality inspection, and test evaluation. Under the agreement, South Korea received the technical data package (TDP) of the M48 Patton and its upgrade kits for 12 major enhancements. However, the United States responded by transferring used M48 tanks and providing upgrades instead South Korea received 25 M48A5s from the United States Forces Korea and numerous M48A3s that were used, but in good condition, during the Vietnam War. South Korean President Park Chung-hee requested the latest variant of M60 tanks to maintain the balance of power. 7th Infantry Division began withdrawing from South Korea from 1969 to 1971 under the Nixon Doctrine. In the early 1970s, South Korea received an intelligence report about North Korea locally producing Soviet T-62 tanks. Hyundai Rotem produced 1,511 K1 and K1A1 tanks between 19.Äevelopment K1 combat firing practice, 8th Division. The K1A1 is an up-gunned variant with a 120 mm 44 caliber smoothbore gun, and outfitted with more modern electronics, ballistic computers, fire control systems, and armor. The vehicle's design was based on Chrysler's M1 Abrams. The K1 is a South Korean main battle tank designed by Chrysler Defense (later General Dynamics Land Systems) and Hyundai Precision Industry (later Hyundai Rotem) for the Republic of Korea Armed Forces.
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