Status of Russian Military Industrial Complex (MIC)

The obvious irony is that we are huge producers of Dairy products and I am sure the Russians would be interested to learn how we do it.

For Australia and New Zealand we both have large areas and small populations to watch over, which we have in common with Canada and Russia...

Now they have found out that by trying to exploit Chinese “cheap labour” and out-sourcing their IT work and IC boards, they have compromised their own security in that the Chinese now have codes and the capability to neutralise or turn their own systems.

It is worse than that. The investment going into China from the west is what is causing its growth in economic power, and I don't think the west is ready for the growth in political power that will come with that.

Even worse the western governments have lost control and western companies who don't care about ideology, they just care about dollars see much larger profits from investing in the Chinese than in the US economy.

All those trillions of dollars given to US companies that couldn't fail weren't invested back into the US economy, they were invested into the Chinese economy because the return is higher.

These banks saved by US taxpayers don't give a about the US taxpayer, their investors just want the biggest return as quickly as they can get it... and China offers faster returns...

As you read in the first post of this thread evil nasty Putin who has trillions of dollars stashed away supposedly is trying to make sure that even companies that made old obsolete crap that the Russian military doesn't want now will get funding and help to change to something that does make money and to retool and retrain their work force so they can do it. Why doesn't do what the US does and hand lots of cash to the banks and trust they will do the right thing by US workers.

US moral and perfect, Russia immoral and corrupt.

Hang on... in reality it seems to be the other way around doesn't it?

I mean market forces in the west doesn't lead to justice and prosperity for all, it leads to criminal banking institutions getting rewarded for their own corrupt practices and the average taxpayer footing the bill.

But don't let the truth get in the way of a good story.

Speaking of which I watched a US movie the other day called "Real Steel".

Very simply it is about a down on his luck ex boxer human played by Wolverine who has a kid he abandoned arrive for a visit. The core of the story is that robots are used for boxing, but being an american movie I am sure you can already guess the plot. Kid finds robot in junkyard and liberates him and trains him to box. Gets fight in local match and beats local bully. Gets seen by big league guy and is sent to the major leagues and guess what... we see two fights in the major league... a fight against a two headed CHINESE robot, and the most powerful robot in the competition is controlled by a Japanese guy with a Russian girlfriend.
Something goes wrong with the controls of the goodguys robot and he has to put it in manual and stand outside the ring and get his robot to copy his moves.

Needless to say all the major morals are there... ex-boxers fight better than robot-geeks, a robot will go down when you punch it in the head hard enough even though its anatomy has nothing at all to do that that of a humans. The little robot from the junkyard can beat a custom designed professional (just like American teenagers and fly F-16s and defeat ME countries on their own), children can win professional races/competitions against grownups... the kid in this movie even looks like Anakin Skywalker, but the obvious is that the Japanese are the best in robots and the Japanese and Russians and Chinese are our competition/enemy.

Just another cog in the propaganda machine reinforcing who the good guys are and who the bad guys are.

http://www.thefirearmblog.com/blog/2012/04/23/the-faces-of-izhmash/

While I'm saddened to see the producer of the most iconic weapon in history facing such hard times, I can't help but think that this will possibly help the Russian arms industry to come up with some new and unique designs, as well as catch up with the times.

Post your thoughts.

"Bankruptcy" for Izhmash means that the "company" shares are being "redistributed" by the various "sharholders" that happen to be government "institutions".

This must be the n-th time Izhmash is going bankrupt.


Nothing new, keep walking...

I believe the actual numbers are last year $6 million dollar loss and this year so far 25-35 million dollar profit.

I believe the problem was previous mismanagement that has been corrected and the factory will go from strength to strength with new export products and likely sales for the AK-12 family.

From the Izhmash website (the Russian section of the news translated by Google).

OFFICIAL COMMENTS ON BANKRUPTCY IZHMASH
JSC "Izhevsk Machine-Building Plant"

April 6, 2012 Arbitration Court of Udmurtia has recognized, "Izhevsk Machine-Building Plant" bankrupt, and opened for business in bankruptcy. The court appointed bankruptcy trustee member of the company non-profit partnership "Moscow professional self-regulating organization of arbitration managers' Artem Kuznetsov.

The decision on the recognition of a bankrupt company was expected to guide him the plant was ready. At the beginning of 2011, when under the control of the State Corporation "Russian Technologies" to the management team "Izhmash" came a new crisis management team headed by Maxim Kuzyukom, it was decided to conduct business through the improvement of the reorganization of the management and implementation of bankruptcy procedures, including in order to comply balance the interests of the debtor and its creditors.

To the company was able to preserve the scientific and industrial potential, was created by NPO "Izhmash" (100% subsidiary of GC "Technologies"), which combined the main production areas, previously carried out by disparate groups of businesses "Izhmash". It is important to ensure that the commitments by the state defense order in the field of military-technical cooperation. Receiving the majority of employees in the newly created company has actually been completed, as well as translation of basic obligations under the executables earlier contracts. All the necessary licenses to manufacture and sell products for civil and military purposes and has already received. The factory will continue to fully and thus more effectively than ever before, to produce the full range of products, which is famous for Izhmash, including Kalashnikov assault rifles, Dragunov sniper rifles, sporting shotguns "Saiga", "Tiger," "The Bear" "Moose," sporting rifles "Biathlon" precision artillery shells, machine tools and tools.

As a result of reorganization of the formation of a new structure of the effective management of the enterprise, many new areas of production led by professional managers, they are now completely revising existing processes and adopting modern methods of production management.

According to forecasts, the implementation of these measures will allow the NGO "Izhmash" in 2012 to enter the profit of 32 million, compared with 6.4 million net loss last year. In 2012 the amount of planned revenues 5333 million rubles, including 3756 million rubles - at the expense of military production and 1568 million rubles - at the expense of products for civilian use. According to forecasts, sales will increase by 15-20% compared to last year.

Note the bits highlighted in bold is highlighted by me.

source page: http://www.izhmash.ru/rus/news/100412.shtml

translated page: http://translate.google.com/translate?u=http%3A%2F%2Fwww.izhmash.ru%2Frus%2Fnews%2F100412.shtml&sl=&tl=en

Wouldn't that be a fascinating place to work...

I wonder if I should send my CV or just turn up...

Interview with Dmitry Rogozin

http://www.rg.ru/2012/09/26/rogozin.html

Well this is interesting.

In few years time Russian MIC will increase defense output almost two times and continue growing on unprecedented rate.

Considering types of weapons in development it means new and more lethal weapons will be introduced to Russian military and abroad

at faster rate with each passing year.

Rogozin predicts a significant increase in industrial production of the Russian defense industry


TSAMTO, October 2. The industrial output of enterprises of the Russian defense industry in 2015 will increase by 1.8 times compared with 2011. On this, as the "RIA Novosti", said Deputy Prime Minister Dmitry Rogozin in the forum "Russia Calling".

According to him, "in view of the projected trends, the volume of industrial production in total defense increase in 2015 (relative to 2011) by 1.8 times in 2020 (relative to 2015) is 1.5 times , in 2025 (relative to 2020) by 1.3 times in 2030 (relative to 2025) by more than 1.2 times, "- said the agency.

Overall, by 2030, defense production, compared with 2011 will quadruple.

Rogozin said that as of now, "about 45% of the industrial output of the Russian defense industry - is the military equipment that is made for domestic use, about 22% - is defense products, which is sent in the military-technical cooperation on export and 33% of production of defense products are purely civilian "- transfers" RIA Novosti ".

According to the Deputy Prime Minister, in the future, "the Russian defense industry should reach 50 per cent of civilian products", - said the agency.

http://vpk.name/news/76378_drogozin_prognoziruet_sushestvennoe_uvelichenie_obemov_promyishlennogo_proizvodstva_rossiiskogo_opk.html

As technology is mastered then things will improve.

A lot of old factories are completely re-equipped with all new design and production technology and tooling, so it is a question of training up workers to use them effectively.

I hope the most salient aspect of this new agency is to support the growth of private entrepreneurs in Russia who have tremendous talent . The Skolkovo Initiative can serve as a cornerstone . Given the fact that a good number of Germans , French , Italians among others Europeans are arriving in Russia in search of work they can also be given an opportunity.

Mikhail Kalashnikov Asks Putin To Save Izhmash

MOSCOW — Mikhail Kalashnikov, the Russian who designed the AK-47 assault rifle, called on President Vladimir Putin on Oct. 30 to halt the decline at the legendary factory where he invented the weapon.

Kalashnikov, 92, and 16 colleagues said in an open letter addressed to Putin that production had fallen to a record low at the Izmash motor and weaponry factory in Izhevsk, the main city in the central Russian region of Udmurtia.

“Respected Vladimir Vladimirmovich, we are forced to turn to you because of the catastrophic situation at what was once a manufacturing giant,” the letter said. “It is bitter and shameful to see how something built by more than one generation is being destroyed. Today the level of production is lower than ever.”

“In the name of the veterans who have spent most of their lives working at Izmash, we ask you to save our factory,” it said.

Read the rest of the article here: http://www.defensenews.com/article/20121030/DEFREG01/310300007/Russia-8217-s-Kalashnikov-Asks-Putin-Save-Famed-Factory?odyssey=tab%7Ctopnews%7Ctext%7CFRONTPAGE

From the Firearm blog:

It is hard to sympathise with either Izhmash or Mikhail Kalashnikov. Mikhail Kalashnikov's last open letter addressed to Putin was in 2008. In that letter he accused foreigners of spreading rumours about the collapse of Izhmash in order to undermine the power of Russia.

For most of the past decade there has been almost no innovation from Izhmash. Instead of innovating they used the Russian courts and diplomats to suppress competitors. In 1997 they obtained a patent for the 50 year old AK-47 design. Izhmash used this ridiculous patent to sue and take ownership of their Russian rival Molot.

Rest here: http://www.thefirearmblog.com/blog/2012/10/31/mikhail-kalashnikov-asks-putin-to-save-izhmash/

It is hard to sympathise with either Izhmash or Mikhail Kalashnikov. Mikhail Kalashnikov's last open letter addressed to Putin was in 2008. In that letter he accused foreigners of spreading rumours about the collapse of Izhmash in order to undermine the power of Russia.

So this guy is suggesting that Russias enemies are not spreading rumours about the impending collapse of Izhmash?, or that Izhmash or Mikhail are not allowed to make comments about this?

For most of the past decade there has been almost no innovation from Izhmash. Instead of innovating they used the Russian courts and diplomats to suppress competitors.

Sorry... what? For the last decade they have upgraded the AK to AK-100 level and developed a carbine and standard length rifle in domestic and foreign calibres, they have improved the SVD into the SVDS, and they have introduced a suppressed assault rifle (AK9), while at the same time introduced into service an upgraded PKM for the light machine gun role called Pecheneg. In comparison the Brits over the last 30 years have introduced the fairly unreliable SA-80 and LSW, and had the Germans improve the SA80 to produce the SA-80Mk2 which has achieved a decent level of performance... finally. The French still have their FAMAS and the Americans still have M4s.

Exactly what was expected of Izhmash?

Laser rifles?

They also now have the AK-200 and the AK-12 and they also had the AK-107 and AK-108 balanced recoil rifles.

In 1997 they obtained a patent for the 50 year old AK-47 design. Izhmash used this ridiculous patent to sue and take ownership of their Russian rival Molot.

Yes, what b@st@rds! They took control of a product they designed and used the law to take over control of that design.

Hang on... doesn't Coca Cola go into foreign markets and buy up or crush opposing local bottle makers and then take over the market?

Isn't that just called business?

Sorry... what? For the last decade they have upgraded the AK to AK-100 level and developed a carbine and standard length rifle in domestic and foreign calibres, they have improved the SVD into the SVDS, and they have introduced a suppressed assault rifle (AK9), while at the same time introduced into service an upgraded PKM for the light machine gun role called Pecheneg. In comparison the Brits over the last 30 years have introduced the fairly unreliable SA-80 and LSW, and had the Germans improve the SA80 to produce the SA-80Mk2 which has achieved a decent level of performance... finally. The French still have their FAMAS and the Americans still have M4s.

Exactly what was expected of Izhmash?

Laser rifles?

They also now have the AK-200 and the AK-12 and they also had the AK-107 and AK-108 balanced recoil rifles.

I agree with you. You should post your opinions on the Firearm blog, as the general opinions the members have on this issue seem to be rather one sided. .

I post on their as Esh325. It is a very good blog in general, but I don't agree with the tone of the writer on this article either. I don't think innovation is their problem, they've had many new designs. A lot of their designs have no equals in the west. Some of Izmash's problem seem be due to circumstance like when the USSR fell, but a lot of their problems are due to its poor management I believe. They weren't aggressive enough in pushing new versions of the AK, and other weapons on the world market. Picatinny rails and collapsible stocks should have been standard on the AK-100 series years ago. I suppose Izmash will just be bailed out by the government.

Izhmash's main problem is the 12 million or so AKMs and AK-74s in long term storage accross Russia. the Soviets piled up these weapons to be issued in a mass mobilization situation (WWIII).
I believe the defence Ministry is not buying AK-74s this year because thaer is more than they need in storage.

But everyone should relax, Izhmash is never going to stop making firearms. It is just impossible.

They weren't aggressive enough in pushing new versions of the AK, and other weapons on the world market. Picatinny rails and collapsible stocks should have been standard on the AK-100 series years ago. I suppose Izmash will just be bailed out by the government.

Actually at the core of their problems is the political problem of Yeltsin and Clinton signing an agreement that prevents Russian gun makers exporting weapons to the US that don't have US made components in them.

This violates the whole concept of the WTO where no country is allowed to ban a foreign product except on safety grounds.

Obviously the Russians weren't in the WTO at the time, but now they really don't have a leg to stand on.

Imagine the state of the Sukhoi company if Yeltsin signed an international accord to ban the export of fighter aircraft with an unrefuelled flight range of more than 2,000km?

They would be in economic trouble.

Izhmash is not just one factory that just sells AKs, on their weapon page alone they have over 50 different weapons from SMGs, rifles, aircraft mounted cannon, laser guided artillery shells, as well as sporting weapons.

http://www.izhmash.ru/eng/product/weapon.shtml

They also sell other products like tools, knives, and machinery.

Rogozin Sets Sights on Kalashnikov Merger

KLIMOVSK, November 3 (RIA Novosti) - Russian Deputy Prime Minister Dmitry Rogozin called on Saturday for a merger of two of Russia's leading small-arms makers, Izhmash and Izhmekh, under the Kalashnikov brand.

"We need to set up a new-old brand, named 'Kalashnikov', based on the two old factories," said Rogozin, who has special responsibilities for Russia's arms industry, during a visit to the TsNIITOCHMASH arms plant near Moscow.

Oleg Bochkaryev, a member of Russia's military-technical commission, arrived on Friday in Izhevsk, the Urals city where the two enterprises are based, for talks on a possible merger, Rogozin said.

"Izhmekh and Izhmash, with all my respect, are not a brand. Kalashnikov - that's a brand," Rogozin said.

He criticized the two plants for lacking staff, having financial difficulties and over-capacity, and making similar products

Read the rest here: http://en.rian.ru/business/20121103/177174414.html

I think he has a good argument.

I disagree.

Kalashnikov is indeed a good brand. But extending the name to all of the product lines will create nothing but confusions. I find it odd to apply the Kalashnikov name to a bolt action rifle or an airgun for example.

The name "Izhmash" does in itself have good brand value. In addition the "Saiga" brand is very well known both domestically and internationaly.

As for "Izhmekh", they use the well known brand name "Baikal". Nothing wrong with that.

The 2 companies are government owned anyways and have little overlap in their product ranges, merging them will not solve the main problems. They can survive and prosper independently. A merger will result only into a mega company...good for braging and not much else.