Military Aviation Industry: News

Russian aviation industry gets rid of ballast
19 March 2021

The Russian aviation industry is preparing for a major reform. UAC, together with Sukhoi and MiG companies, will form a single corporate aircraft manufacturing center. At one time, eminent European design bureaus found the strength to unite. This is how the world leader in aircraft manufacturing appeared along with Boeing - Airbus. Will Russia succeed?

The Russian aviation industry awaits a serious reform under the leadership of Rostec CEO Sergei Chemezov. He will head the board of directors of the United Aircraft Corporation (UAC), taking the place of the head of the aviation cluster, former Defense Minister Anatoly Serdyukov, the state corporation said.

Chemezov explained that he decided to take this post "taking into account the importance of the task" in order to "take the issue of corporate reforms under personal control." The state corporation explained that he would personally supervise all reforms in the UAC.

“Systemic reforms should improve the structure of the company and solve the issues of its financial stability, increase the competitiveness of domestic civil aircraft and cover the significant needs of Russia in modern aircraft for passenger transportation,” Chemezov said. As explained in Rostec, UAC, together with Sukhoi and MiG companies, will enter a single corporate aircraft building center, the press service of the Rostec state corporation reported. The engineering and design functions of the group will be separated into a separate center, which will be located in Moscow.

Earlier, RBC reported that the leading aviation design bureaus will be merged into one center on the Khodynskoye field, the MiG and Sukhoi companies will cease to exist as independent legal entities, but the brands well-known to everyone will remain. At the same time, the administrative apparatus of the UAC will be reduced from five thousand people to 500, but there is no talk of the dismissal of engineers.

What are the advantages and dangers of the even greater centralization of the Russian aircraft industry?

Consolidation of disparate structures will help reduce costs and debt burden of the company, and increase the economic stability of the UAC.

“It is definitely necessary to reform. The current structure of the UAC is redundant, resource-intensive and inefficient. It is obvious. The corporation has constant losses and debts accumulate, ”says Roman Gusarov, editor-in-chief of the Avia.ru portal.

This is partly due to the bloated staff of administrative workers, accounting, and the economic department. “And everywhere there are only bosses who, in fact, do not participate in the creation of the product. As a result, there is no opportunity to hire high-quality specialists, because all are sold by thousands of people who are not engineers, ”the expert adds.

“If instead of five accountants we have two accountants, will this lead to the destruction of design schools? What if there are fewer lawyers or procurement specialists? And there are a lot of such “ifs”, ”Oleg Panteleev, editor-in-chief of Aviaport, agrees.

“UAC will give one left to Boeing and Airbus in terms of the number of kilometers of barbed wire that surround all these sites. At the same time, the number of aircraft produced per square meter of occupied area, to put it mildly, does not correspond to the indicators of our competitors ", says Panteleev.

There are many different design bureaus and scattered infrastructure in Russia. Design offices occupy buildings that are more than half a century old, and they are all scattered across different geographic locations, the expert notes. Therefore, the association even optimizes the logistics for various meetings.

“The advantages of consolidating and centralizing management functions and support functions are obvious. People will be gathered at one well-equipped site, ”Panteleev says.

Combining different design bureaus under one roof will not destroy the illusory internal competition. Gusarov is confident that it will be possible to preserve the independence and autonomy of each design bureau simply because they have completely different areas of work that cannot be combined.

“The internal competition of design thought is, in fact, a thing of the past long ago. It has turned, in fact, into competition for budget funds, for resources. Without government assignments and funding, engineers cannot launch a combat aircraft. And the state cannot finance the development of two identical aircraft at the same time from different design bureaus in order to see who will get the best car. Nobody else in the world does this, neither the United States nor Europe. On the contrary, they consolidate the maximum resources in the same hands, and only then a high-tech advanced product is obtained, ”the interlocutor argues.

Creation of an airplane, especially from scratch, is very expensive, requires billions of dollars and decades of time.

“The example of Europe is indicative. At one time there were many dying design bureaus, albeit eminent ones. They found the strength to unite.

As a result, we got one of the two largest aircraft manufacturers in the world - Airbus, which occupies half of the world's civil aviation, ”recalls Gusarov. In this regard, Russia is following the already beaten path.

“We need to compete not internally with each other, when Tupolev and Sukhoi pull the blanket of budget money over themselves, but together make good products and compete with external products from Boeing and Airbus. This is a new level of competition. This requires modernization, money for new equipment, science, technology - and good specialists who need to be paid a decent salary. A large, but hungry army will be less efficient than a well-fed one, ”says an industry expert.

Another thing is that so far there is no detailed reform plan to assess how this will all be implemented in the end. The obvious disadvantage is already clear - thousands of people will have to look for a new job. However, no optimization process is complete without this.

Another threat is the risk that the reform will be carried out ineffectively.

“Even the most wonderful thing can be ruined with extraordinary ease. First, an atmosphere of mistrust and uncertainty can be created. Secondly, with the correct staff reduction, we should get an increase in the efficiency of the remaining employees, and with the wrong choice of employees, everything will be the other way around: people will stop working altogether, but they will be loyal to the management, ”says Oleg Panteleev.

“As for the promotion of internal competition in the design bureau, this can be organized. When it comes to the development of a new unit or a new aircraft, traditionally, even in one department, a large number of alternatives were considered. It's a management issue. The worst thing is when some leader makes voluntaristic decisions that he likes this way, and nothing else, ”the interlocutor believes.

Among the disadvantages may be the risks of sanctions: when instead of one enterprise, the entire industry will be subject to restrictions. However, it is not worth living with an eye on the sanctions, besides, Rostec has already fallen under them, Gusarov said. “There will be no joint projects with Western countries for decades to come in aviation, all new projects will most likely be built with domestic equipment,” says Panteleev.

In any case, experts believe that the reform of the KLA is indispensable. “The price of the issue is savings of 130 billion rubles.

Is it worth starting a transformation for the sake of saving 130 billion rubles? In my opinion, worth it. This is a really big amount.

But the paralysis of the UAC is not worth the money for a couple of years, ”Panteleev believes.

The transformation gives certain opportunities to the Russian aviation industry, the question is how the management can take advantage of these opportunities. “Sergey Chemezov will manage the process. He takes responsibility, he himself appointed the last one. I think it’s not in his interests to let things go further, ”the source concludes.

Text: Olga Samofalova

https://m.vz.ru/economy/2021/3/19/1090161.html

The MiG 41 is reportedly in its early design phase. It would be a huge shock if they presented a prototype this year. Same for LMFS and Slon.