Aviation Industry Overview
The aviation industry is the most developed branch of Russian industry. The industry is characterized by a very high knowledge intensity and the need for significant capital investment. The own aviation industry is the most important characteristic of the technological potential of the country's national economy. The industry is of great importance for the development of the state - general economic, defense and scientific. This industry makes it possible to master and launch into production new military, civilian and dual-purpose products. The aviation complex was born as a single whole system and preserved this systemic character, even in the years of strong economic transformations in Russia in the early 1990s.
Beginning in 1990, the Russian aviation industry was divided into four agencies: Ministry of Aviation Industry, Ministry of Industries, State Committee of Defense Industries and Ministry of Defense Industries. The latest change occurred in May 1997 when the Ministry of Defense Industries that was responsible for the military-industrial complex and civil aviation was dissolved and incorporated into the Ministry of Economy in the form of a Department of Aerospace Industry and Shipbuilding. On August 21, 1997 the reorganization of airspace and defense industry was formally announced to enable it to have a more equitable share of foreign arms sales. By the end of 1997, just five airliners plus seven helicopters were delivered to Russian airlines and about the same to foreign customers.
In early September 1997 after heated debates at the Ministry of Economics the plan entitled "Concept of Restructuring the Russian Aviation Industry Complex" was finally made public. Essentially the plan presupposed vertically-integrated structures and large-scale merges and consolidation among aerospace organizations and research institutions. At the initial stage the program called for integrating 39 major enterprises involved in the research and development, testing, and manufacture of aircraft engines, and 47 enterprises which develop and manufacture avionics and major aircraft system components. The immediate aim was the increased competitiveness, development of new technologies and designs, production of new aircraft and improved aftersale service. Four core enterprise groups were to emerge to promote 5-6 families of Russian aircraft within the country and in the world market: MiG-MAPO complex (military industrial group); the Sukhoi group; the Tupolev group and the Ilyushin group.
While the Russian government considered aviation a strategically important sector of economy and erects considerable protectionist barriers to aircraft import and investment, it also lacked the resources to support aerospace industry, provide subsidies, finance big orders and allow it to adjust to a competitive market economy. In 1999 aircraft manufacturing companies in Russia planned to produce a total of 23 airliners. This number included ten Tu-204, which will be built at the Ulyanovsk aviation plant; three Tu-214 airliners, to be built in Kazan; three Il-96-300, production of which is underway in Voronezh; and three Tu-154M, to be manufactured at the Samara aviation plant. According to the analysis published in "Aviation Week", "Russia may lose both Air force modernization and the industrial capability to rebuild the military... The nation could skip a generation in aircraft development. The result of this technological pause could be unparalleled aerial supremacy for the U.S." (April, 1997)
According to analysis in the late 1990s, the total production capacity of Russian aviation engine manufacturing plants exceeds that of the whole world. Considering relatively inexpensive and highly skilled labor, these factories may become attractive for the long-term investment or joint ventures once they are privatized and new management takes the necessary but extremely unpopular decision of cutting down the excessive workforce.
In 1996, the United States and Russia concluded a Joint Memorandum of Understanding (MOU) reflecting US concerns about barriers to the Russian civil aircraft market and the application of international trade rules to the Russian aircraft sector. The MOU stated that US aircraft manufacturers will be able to participate in the Russian market and share in its growth. The MOU also makes clear that the Russian aircraft industry will become fully integrated into the international economy over time. Russia pledged to eventually undertake the same international trade principles in the aircraft sector as the United States and many others have done, as embodied in the Agreement on Trade in Civil Aircraft.
Since the end of the Cold War, Russian and American companies participated in several major aviation design and production projects. Ilyushin, UTC/Pratt & Whitney, and Rockwell Collins jointly designed and upgraded the Ilyushin 96-M/T airplane. In 2001 Boeing, Sukhoi and Ilyushin started developing the joint Russian Regional Jet (RRJ) project. Boeing has also worked with the Tupolev Design Bureau on the potential development of supersonic civil transport technology and explored a feasibility study with Sukhoi for a Supersonic Business Jet. General Electric supplies engines and UTC/Hamilton Sundstrand provided propellers for Sukhoi's Su-80 aircraft. Honeywell supplied engines to Novosibirsk Aircraft Production Amalgamation for An-38 aircraft.
The Ilyushin-114-100 was outfitted with UTC/Pratt & Whitney engines, UTC/Hamilton Sundstrand propellers, and Honeywell Auxiliary Power Unit and avionics. The Honeywell Traffic Collision Avoiding system, installed on around 300 Russian built aircraft, helped Russian airlines to increase safety and comply with US and European mandates. UTC/Pratt & Whitney engines power the Kazan Helicopter Plant's "Ansat." UTC/Pratt & Whitney is a strategic investor in Perm Motors Factory and Aviadvigatel and participated in modernization of the PS-90 aircraft engine. Boeing operated a design and R&D center in Moscow and UTC/Pratt & Whitney had a design bureau in St. Petersburg. UTC/Hamilton Sundstrand manufactured components for Boeing aircraft in Moscow. Honeywell and Rubin operated a joint venture to supply wheels and breaks, which were certified for Tu-204/214 and IL-96M/T aircraft. In addition, Boeing, General Electric, and UTC/Pratt & Whitney purchased titanium for airframe and engine manufacturing from the VSMPO enterprise in Verkhnyaya Salda.
Many of the Russian-flagged carriers have aging fleets and use outmoded avionics and engines, and several are seriously considering significant purchases or leases of foreign aircraft in an attempt to be more competitive with Western airlines. The domestic civil aviation industry cannot keep up with the airlines' demand for modern, relatively fuel efficient aircraft, so Russian airlines are looking to foreign manufacturers despite a 20 percent import tariff plus VAT imposed by the GOR.
In 2001 Rosaviakosmos intended to set up the following specialised holding companies: "Combat Tactical Aviation", "Heavy Aircraft", "Russian Helicopters", "Aircraft Engines and Aggregates", "Aircraft Armaments", and "On-bBoard Equipment". In accordance with the federal program, two holdings were to be created to merge Russia's biggest aircraft building companies. MiG, Tupolev and Kamov were to be merged into one of the holdings, and Sukhoi, Ilyushin and Mil were to form a second holding. Aircraft building plants in the Voronezh, Ulyanovsk and Kazan Regions have been specified as basic aircraft building plants.
As of 2006 Russian law stipulated preferential treatment (tax holidays and guarantees on investment) for Russian and foreign investors in aviation-related research and manufacturing ventures. The law, however, limited the share of foreign capital in aviation enterprises to less than 25 percent and required that board members and senior management staff be Russian citizens. There was speculation that the 25 percent limit could be raised or eliminated to facilitate further investment. Some observers, however, doubt that recent to raise the limit to 49 percent would be sufficient to attract capital from abroad for Russia's aircraft industry from abroad.
Several Russian airlines operate Western aircraft, however, despite the import tariff plus VAT. Two airlines, Aeroflot and Transaero, previously received tariff-waivers and discounts for these planes, but have exhausted their tariff discount and are now purchasing aircraft at full tariff rates, just as other airlines have always had to do. Russian airlines and foreign governments have been vocal about seeking further tariff waivers. For the first time in 2005, Russian Ministers have suggested that the Russian domestic aircraft industry is not capable of producing the number of high-quality passenger jets Russian airlines want in a timely fashion. Discussions within the Russian government on possible tariff reductions continue.
By 2004 the combined annual turnover of Russian engine production was about $1.5-2.0 billion, or less than 1% of global output. This has to do, above all, with the virtual demise of engine production for civilian aircraft and plummeting production of military engines. Russia's biggest engine manufacturers are the Ufa Engine Production Association (Russian acronym UMPO), Salyut Moscow Machine-Building Production Association (MMPP Salyut) and Saturn Scientific Production Association Joint Stock Company (Saturn NPO JSC). Designers capable of making the first draft a new engine remain in Russia: Viktor Chepkin (Saturn), Mikhail Kuzmenko (head of Saturn civilian programs), Alexander Inozemtsev (OSC Aviadvigatel) and Alexander Sarkisov (Klimov Corporation).
The Russian government also looked to reorganize and revitalize Russia's aircraft industry in the context of a larger restructuring plan for Russia's defense industry. Specifically, large-scale consolidation of the aircraft industry took place with the government creation of the Unified Aircraft Corporation. Government officials have suggested using proceeds from Russia's Stabilization Fund to support this new corporation. The Government of Russia expected it to fulfill no less than twenty contracts in 2007 for helicopters, sports planes, and engines (worth approximately $380 million).
At a session of the Military Industrial Committee, headed by Russian president Vladimir Putin, fundamental decisions were taken in August 2007 regarding the engine industry's consolidation. Initially, 40 existing companies - out of which seven are manufacturers of finished products - would be merged into four holdings with centers in Moscow [MMPP Salyut], St. Petersburg [Klimov], Samara and Perm [Perm Motors ].
On 31 July 2008 Sergei Ilyushenkov, managing director of the Tupolev joint-stock company, said commercial production of a new Russian short-haul passenger airliner, the Tu-334, will start within the next six months. Until recently, Sukhoi's SuperJet 100 was considered the main regional project. With the government also funding the Tu-334 family, some experts believe that the latter are much better fitted for small airports in Siberia and the Far East with their obsolete infrastructure and poor maintenance. The aircraft has already gone through certification, and can be launched into serial production at a minor expense once there are reliable orders from air carriers.
Russian President Vladimir Putin said 23 November 2013 that domestic aircraft manufacturers should build their planes using parts made in the country. Developing domestic capabilities will allow Russian aircraft producers to secure independence from foreign engine manufacturers and reduce their reliance on imported components, Putin said. The Russian leader said the share of imported components for some helicopter engines had reached 80 percent.
By mid-2013 the Russian Defense Ministry was considering two possible designs for a replacement for the obsolete Antonov An-26 military transport aircraf. The ministry was considering development of a light military transport plane based on the Antonov An-140 turboprop airliner made by Aviakor in Samara, or the rival Ilyushin Il-112V transport aircraft to be made by the Voronezh aircraft plant (VASO). The development of the Ilyushin Il-112V was canceled in 2011 under former Defense Minister Anatoly Serdyukov, but his successor Sergei Shoigu reportedly approved the revival of the Il-112 program. In December 2013, it was decided that both would enter production.
One of the most significant problems of the aircraft industry in Russia is the large age of the aircraft operated. The domestic aircraft industry can not fully ensure the production of a sufficient number of new high-quality aviation equipment. As of 2015, there are 5,899 aircraft in the state register, but only 1120 vessels are in flight readiness.
Domestic aviation fleet is very outdated. This negatively affects the competitiveness of Russian airlines in the international air transportation market and threatens the loss of market share in passenger transportation. Russian airlines need to solve the problem of updating their fleet, but this is not possible at the expense of domestic production for objective reasons: lack of production capacity, lack of medium-sized aircraft, lack of proper quality of assembly and subsequent maintenance.
On April 15, 2014, the Government of the Russian Federation adopted Decree No. 303 "On Approval of the Russian Federation State Program" Development of the Aviation Industry for 2013-2025". The Federal Target Program (FTP) is aimed at addressing the competitiveness of the civil aviation sector in the domestic and foreign markets of civil aviation equipment. The goal of the program is a fundamental change in the strategic competitive position of the civil sector of the aviation industry in Russia, which consists in creating on its basis a new world center for aircraft building and winning by 2025 at least 5% of the world market of sales of civil aviation equipment.
Aviation Industry - Great Patriotic War
One of the first planes built at TsAGI was Tupolev's light, single-seat, low-wing monoplane powered by a 45 hp Anzani engine and called the ANT-l. Between 1920 and 1928 Soviet aircraft designers turned out about forty types of planes, including experimental as well as those which went into production. About twenty of the aircraft types went into serial output.
The Soviet regime throughout the 1920s was able to get some support from the Germans in the training of personnel and in the development of air tactics as the result of the collaboration between the Red Army and the Reichawehr. Both were anti-Versailles, a treaty that sought to emasculate the German military and to quarantine the Soviet regime behind a cordon sanitaire.
In October 1928, Stalin announced the First Five-Year Plan. With Stalin's decision to industrialize Russia at a forced tempo and with a very heavy bias toward the military industrial complex, it became possible to build an indigenous aircraft industry, to turn out Soviet airplanes. It was not until the mid-1930s that the nation began to approach Western levels of industrial and technological accomplishment.
With a good memory, Stalin was well aware of the design features of aircraft, all the important issues in aviation were decided by Stalin. The 1929-32 period witnessed a real expansion of the aircraft industry; old plants were expanded and modernized and new ones were built. According to an official Soviet source, between 1928 and 1932, the labor force in the aviation industry increased by 750 percent and the number of engineers and technicians by 1,000 percent. Just how many aircraft plants there were in 1928 and how many were built by 1932 is a matter of confused guessing by Western observers. The guesstimates of the number of aircraft plants in 1932 vary from 6 airframe and 12 engine plants to a total of over 40 (with 150,000 personnel). In the Second Five-Year Plan (1933-37), the output of aircraft quadrupled, going from 860 Ln 1930 to 3,578 in 1937.
The command and bureaucratic administrative mechanism existing in the Soviet Union carried out all the necessary measures for "leveling" the talented, active personalities, who were rushing to progress, and sometimes to their physical destruction. Forced to this was AN Tupolev, in order to survive, obeying the regime of lies and show-off, to create a school that led to the very deplorable state of domestic heavy aviation.
The Soviet scientific-research institutes were intimately connected with the aircraft industry as a whole. The chief designer at TsAGI was A. N. Tupolev. The absurd organization and reorganization of industry produced the merger of the Central Design Bureau (TsKB) and the Central Aerohydrodynamic Institute (TsAGI). In January 1933, the long-awaited division of TsAGI and TsKB, based on the territory of the Moscow Aviation Plant No. 39, took place. In the new Central Design Bureau Nikolai Polikarpov became the head of the design team No. 2 specializing in fighter jets. In January 1933, when someone's head in the General Directorate of the aviation industry (SUAF) came up with the idea to collect all the aircraft designers of the country under one roof. This was the birth of the Central Design Bureau (TsKB), located at the plant #39 in Moscow. Its chief was appointed S.V.Ilyushin, then better known as a senior administrator, rather than as a designer. His design experience was limited to the creation of several training and sports gliders. However, Ilyushin was eager for independent work on the design of combat aircraft.
In ten years from 1927 to 1937, Tupolev's bureau created 10 large-scale machines for the country that met the requirements of the Air Force and GVF, including IL-4, R-3, R-7, TB-1, TV-ZSB, RD (ANT-25), TB-7 (ANT-42), ANT-9, and ANT-14. During these same years N.N. Polikarpov released - I-5, U-2, R-5 and I-16, that is, five types, Ilyushin IL-2 and IL-4 design bureau, that is, two types, and Bartini - EP-2, that is one.
Tupolev believed that: "In the USSR, dwarf bricks, even if headed by talented designers, will not achieve much, we need powerful organizations like KOSOS, which are two or three in number." In those years, he believed that these could be strong bureaus created around Grigorovich and Polikarpov.
By 1934 the People's Commissar of Defense KE Voroshilov, concerned over the excessive efforts of the competent authorities to search for "enemies of the people," was forced on August 5 to write to the Politburo of the CPSU (b) Kaganovich: "As a result of a number of purges, since 1930 we have dismissed from the Air Force of the Red Army" over social origin and political-moral inconsistency "more than 2,000 flight personnel and basically drove out really hostile and politically unreliable people. The inevitable companion of these purges was the great jerking and flutter of the flying and technical staff, especially those comrades who, because of different tails (relatives, origin, etc.) are suspected. It must be said directly that the continuing "search" for dubious elements is already bad for the political and moral state of many of our pilot commanders. I consider it necessary to resolutely abandon the system of these constant "searches", as from the method of strengthening our air forces that is absolutely harmful in the given conditions."
In aircraft construction, everything began in 1937 with the destruction of the department of the pilot aircraft construction TsAGI - the largest design bureau, headed by A.N. Tupolev. After the field in the category of "enemies of the people" were his closest associates, very far from politics people: VM Petlyakov and VM Myasishchev, as well as famous motor-builders BS Stechkin and AD Cheromskaya. On February 14 of the following year, RL Bartini was arrested, followed by the turn of VA Chizhevsky and KA Kalinin, the only one of the chief designers of aviation equipment, shot in 1938.
During the same years, Kocherigin, Golubkov, Itskovich, Moskalev, Florov, Borovkov, Gribovsky, Tsybin, Pashenin, Grokhovsky, Shcherbakov, Chachovnikov, Belyaev, Tairov, Rafaelyants, Zhonshay, Kozlov, Nurov, Ermolaev, Tolstykh, Viskovat, Cheranovsky, Nevdachin, Yakovlev - this listed 24 main, there were, of course, more of them - each of which had its own design bureau, did not give the Air Force any aircraft. Apparently, many of these people, talented designers, in large OKB could be used more productively. From the economic side of the matter, the country did not have much money, but how much did the maintenance of all these bureaus cost.
To get "up" in those years was very easy. But it was much harder to stay, as Stalin conducted cadre policy. In early 1940, Alexandr Sergeevich Yakovlev unexpectedly appointed Deputy People's Commissar of the aviation industry for new technology, and on 27 March 1940, as mentioned above, the Resolution of the Central Committee of the CPSU (b) and SNK is both the head of department of experimental aircraft. At the same time he continued to combine work at the new location with the duties of chief designer.
Yakovlev, who came to the post of Deputy People's Commissar, tried with all his might to get rid of it. Yakovlev had many ill-wishers. But the issues of mass production were taken up by absolutely different people: Petr Vasilievich Dementiev and Pavel Andreevich Voronin. People who have made a lot for the development of our aviation industry. Could Yakovlev "kill" the aircraft at the design stage? At once. Moreover, it was his duty. And spawned a bunch of ill-wishers.
Moskalev Alexander Sergeevich was the author of 35 designs and modifications of aircraft, the ancestor of the swept form of the delta wing. The creator of unique aircraft SAM-5, SAM-7, SAM-10, SAM-13. He built 23 aircraft, but not one was built serially. In his memoirs, Moskalev directly blamed Yakovlev that he did not put his SAM-13 into practice. The plane was really unique, it was created according to the "pull-push" scheme, with two engines. He had very good flight characteristics. Pashinin, Florov, Borovkov, Yatsenko, Bisnovat - they all built airplanes. And they tried to compete with Yakovlev, Lavochkin, Mikoyan. But, for example, the plane Bisnovata SK-1, which flew 100 km / h faster than the Yak-1, could not carry weapons at all.
By 1940 the industry was turning out around 7,000 planes a year.
Even after 65 years there is no consensus on the extent of our losses in the first days of the war. By October 1941, the Wehrmacht armies approached Moscow, cities were occupied, supplying components for aircraft factories, it was time to evacuate factories and Sukhoi, Yakovlev and others in Moscow, Ilyushin in Voronezh, demanding the evacuation of all factories in the European part of the USSR. The Soviets were able to move much of their aircraft industry eastward out of German range during the summer and fall of 1941, By mid-1942 the planes were again coming off the production lines.
By late 1944 the Germans were drowning in a flood of Soviet aircraft. The average monthly production of aircraft rose from 2.1 thousand in 1942 to 2.9 thousand in 1943. In total, in 1943, the industry produced 35,000 aircraft 37 percent more than in 1942. In 1943, the factories produced 49 thousand engines, almost 11 thousand more than in 1942. As early as 1942, the USSR surpassed Germany in the production of aircraft. The aircraft industry of the USSR produced 15,735 aircraft in 1941. In heavy 1942, in the conditions of evacuation of aviation enterprises, 25,436 aircraft were produced, in 1943 - 34,900 aircraft, for 1944 - 40,300 aircraft, in the first half of 1945, 20,900 aircraft were produced.
The most difficult situation was in the most complex knowledge-intensive industries - engine building, instrument making, radio electronics. We must admit that the Soviet Union could not overcome the backwardness of the West in these areas in the prewar and war years. Too great was the difference in the "starting conditions" and too short a period, given the history. They were unable to establish during the war years the serial production of turbochargers and two-stage superchargers.
No less serious restrictions made it necessary to use wood, plywood and steel pipes instead of scarce aluminum and magnesium alloys. The overwhelming severity of the wooden and mixed construction forced the Soviets to weaken weapons, limit ammunition, reduce fuel and save on armored protection. Nevertheless, the progress of Soviet aircraft building in complex war years is undeniable.
Aviation Industry - Cold War
The fact is that by the 1950s there were too many design bureaus in the country (post-war heritage) and competition, as well as expenses for projects, which later went into baskets, reached incredible proportions. However, the draft of such cooperation was generally unsuccessful and went the other way - enlargement.
During the Soviet era Ministry of Aviation Industry [MAP: Ministerstvo Aviatsionnoi Promyshlennosti] supervised over 400 enterprises. Of these former Ministry of Aviation Industry, 15% were lost overnight when Russia shrunk to its present borders. During the 1980s 70% of the output of the ten major airframe design bureaux and the 20 major production factories was for the military. During the 1990s the reduction in military budgets effectivly ended military aircraft procurement. The remaining 30% was civil, for Aeroflot and some foreign airlines, and represented approximately 100+ jet and turboprop airliners and airfreighters per year - plus several hundred helicopters.
During the Soviet era aircraft such as the Tupolev Tu-154 or the Ilyushin Il-62 were transferred from one government department, the Ministry of Aviation Industry (MAI) to another, the Ministry of Civil Aviation (MCA), for a national value of one million roubles (approximately $150,000 at the then [unofficial] rate of exchange widely available). The Ministry of Civil Aviation then allocated it to an Aeroflot unit, which regarded the aircraft as being 'free of charge'. As such, it did not much matter if the aircraft sat, unused, on the ramp for months on end.
By the mid-1960s, the Soviet press reported that repair of existing machine tools occupied 3.5 times as many people as were actually employed in manufacturing new units; that electric motors, during their first year of life, spent 30 to 40 percent of their total working time undergoing repairs; that, at any given time, not less than 40 percent of all vehicles in the Soviet Union were idle, awaiting repairs.
Another dramatic illustration of the progressive deterioration of quality and quality control in the Soviet Union was provided by an item on the television industry. In any normal civilized country, the general experi- ence is that the quality curve of complex products rises from year to year as weaknesses are eliminated and design and methods of manufacture improve. In the Soviet Union the reverse was the case. Thus, a study of television failures during the guarantee period of 6 months after sale revealed that the quality of sets had been deteriorating. In 1960, the percentage of failures during the first 6 months attributable to defective tubes was 47 percent. In 1961 it was 52 percent. And in 1962 it rose to 61 percent.
The Soviet military was impressively equipped, and it had been built up, without regard to cost, by ruthlessly starving virtually every other sector of the Soviet economy. This industry commanded the best equipment, had access to the highest quality materials available, and employed the best qualified technical personnel. High precision measuring equipment, to the limited extent in which it was available to Soviet industry, was concentrated in the factories feeding the defense establishment. Production standards are more rigorous in these factories and inspection procedures are the severest to be found in the Soviet Union. With all of these advantages, the Soviet defense industries had been able to turn out small weapons and artillery and tanks of good design and apparently acceptable quality.
Even in the considerably less sophisticated sphere of aircraft production, their defense industries, despite the many advantages they enjoy, turned in a questionable performance. For example, Khrushchev himself, in his statement of December 13, 1963, before the Communist Party Central Committee, complained that: "Up until recently Soviet aviation industry has been manufacturing aircraft engines with a service life Of 500 hours, while the British engines have a life of 2,200 to 2,500 hours."
In addition, there is the fact that the quality of Soviet electronic equipment is so low that the Soviets prefer to trust the safety of their TU-104 and IL-18 airliners to British-made navigation equipment, and that even a Czech-produced Mig-15 fighter which crashed in West Germany was equipped with West German electronic equipment.
To summarize: Instead of catching up with the West, and becoming less dependent on it, Soviet industry seemed to be lagging further and further behind the West and to be growing more dependent on it. This is so because the technological explosion of the 1960s made modern industry more dependent than ever on ultrahigh precision and on the instruments capable of assuring such precision, on rigid standards .of quality control, on sophistication of design and painstaking workmanship. These are precisely the were where the Soviet Union was weakest and where the Soviet system raised the greatest obstacles to progress.
Under Khrushchev he Ministry of the Aviation Industry (MAP) underwent a reorganization, changing its name to the Committee of Aviation Technology. No matter how the organizational boxes are shuffled, the same functions generally continue to be performed by the same people with the same old equipment.
The annual plan which defined the operations of individual enterprises originated with the Politburo, which established the general strategic requirements of the USSR. For example, it determirted that Soviet industry must produce a certain number Of Jet propelled aircraft of a given perfor:mance standard, superior in number and performance to those currently produced by Western nations. These requirements were passed on to the Ministry of Aviation, which determined the earliest dates for the achievement of these production goals. If these requirements called for development of a new plane, aircraft designers in the ministry developed technical specifications and plans and passed them on to the Council of Ministers as specific projects.
The Council of Ministers discussed and approved these projects and established their total cost as well as final completion dates. Total costs were held to include wages and salaries, raw materials, other purchases, and bonuses. The Council of Mini!Stera did not deliberate on the procluction plans for enterprises engaged in serial production, but only considered key projects such as experimental aircraft.
A project was then returned approved to the Ministry of Aviation, which submitted it to the various aircraft development plants for bids. Such a project, was treated as a contract and the directors of the various plants engaged in aircraft development were forced to compete for it.
The directors of the various plants engaged in developing aircraft were called to Moscow, where the terms of the project were read to them. A director was then given a brief period to check on possibilities within his plant before submitting his bid. The plant director who made the best offer in terms of production time and costs usually received the assignment. In other cases, a project was awarded to two development plants, which then carried out parallel operations. In the case of some contracts, this bidding was probably a mere formality, as the projects had definitely been drawn up specifically for [if not by] the "winning" enterprise.
The Soviet economic apparatus had laid down the general rule that a director of an enterprise was never foroced to take an assignment from his supervising ministry, but, rather, was obliged to compete for such projects. The idea was that each person engaged in industry, including plant directors, had to assume a personal obligation and not simply receive an order. It was felt that this principle stimulated efficiency and initiative on the part of plant directors. Failure of a director to obtain orders or contracts for his plant would mean that he would lose his job. The plant could even be closed if it were so inefficient as to be not viable.
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