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Russian Military Industry

Concern VKO Almaz-Antey on the basis of production activity in 2017 for the first time entered the top ten of the world's largest manufacturers of military products, taking eighth place in the Top-100 ranking of the American specialized weekly Defense News in August 2018. Almaz-Antey, engaged in the development and production of antiaircraft and anti-missile defense, has risen in the ranking by three positions at once: from 11th to eighth place. According to the weekly, the company's revenues in 2017 amounted to $ 9.1 billion, an increase of 39% compared to 2016.

In addition to the Almaz-Antey concern, five other Russian companies entered the world rating of the 100 largest enterprises of the MIC. The United Aircraft Corporation retained the 14th place with the figure of $ 6.1 billion. The Tactical Missile Armament Corporation moved up from 32nd to 25th place, earning $ 3.5 bn in 2017. The Russian company Helicopters of Russia took the 36th line in the rating of the magazine with an indicator of $ 2.7 billion. According to the American newspaper, the Russian manufacturer of tanks Uralvagonzavod in 2017 increased its revenues by 18% - to $ 1.8 billion - and ranked 46th among the world's arms producers. With a small gap from it on the 48th place in the rating was placed "Concern" Radioelectronic Technologies "(KRET) with a result of $ 1.6 billion.

The rating of the world's largest manufacturers of military products "Top-100" is compiled by Defense News since 2000 and is one of the most authoritative in the world. The distribution of seats in this rating is made depending on the volume of companies' revenues from military products.

Six Russian companies were among the 100 largest manufacturers of military products according to the American weekly Defense News, which specializes in news on military topics. The leader of the companies from the Russian Federation was again the concern of the East-Kazakhstan region Almaz-Antey. Defense News has been making this rating since 2000. At the end of 2016, a hundred included Almaz-Antey (11th with revenues of $ 7.412 billion, the year before the concern was also 11th with revenues of $ 6.965 billion), United Aircraft Corporation (14th place with revenue of $ 5.636 billion, a year earlier The corporation was the 16th with revenues of $ 4.643 billion), the Tactical Missile Arms Corporation (32nd place with proceeds of $ 2.866 billion, last year the corporation was the 37th with revenue of $ 2.387 billion), Uralvagonzavod (45th place with revenue In $ 1.584 billion, a year earlier the company was the 60th with revenues of $ 1.014 billion), the concern "Radioelectronic Technologies" (50th place with revenue At $ 1.365 billion, the year before the concern was the 48th with revenues of $ 1.678 billion), as well as RTI (86th place with revenue of $ 565.9 million,

The present condition of Russia's defense sector is critical, and the reasons are well known. One is the aging of highly qualified production personnel, many of whom are approaching retirement age. Engineering school graduates are unwilling to take jobs in the defense sector because of low wages. No worker replacements are trained anywhere in the country either. Earlier, it was taboo to draft workers from defense factories into the army. Now this privilege is abandoned, and graduates of the few surviving vocational schools seek employment elsewhere, but not in the defense sector where receiving a foreign travel passport is a problem.

Another problem is the aging of the equipment in the defense industry: its production lines and machine tools have long passed the 30-year limit. Many key technologies have been lost as have co-production links. The uncontrolled growth of energy costs is outstripping inflation and is well above the deflators provided by the Economic Development and Trade Ministry. It was obvious that the 2006-2015 government defense order would fall short in both the range and quality of products ordered.

The basis of the classification of enterprises is the numbering system of defense plants (No. 1, 2, etc.), which was introduced in 1927. due to the increased requirements for the secrecy of defense production. This system provided for the through numbering of defense plants of all industries and henceforth excluded the coincidence of the numbers of enterprises of different departments. Prior to this factories in many industries also had digital signs. Thus, the aircraft building enterprises had the name State Aircraft Plant (GAZ) with serial numbers from 1 to 16. But these were only interdepartmental (within a trust or association) serial numbers that did not aim to hide the specialization and location of the enterprise.

In 1927 the first enterprises received serial numbers starting from the 1st (according to the first order of the Supreme Economic Council / NKVM / OGPU on renaming - No. 73cc from 9. 07.1927g., License plates received 30 factories). In the future, newly formed or transferred to the defense industry enterprises received subsequent numbers. When liquidating or merging several enterprises into one (which was a mass phenomenon during the evacuation in 1941-42), the released numbers were assigned to newly formed enterprises. This system operated until the mid-1960s, when the numbers of defense plants moved well beyond 1000.

The numbering of research organizations (CBIs) and design bureaus was mainly free from the rules except for one factory operating under the designation: the institute number could not coincide (with rare exceptions) with the scientific research institute number of another department. For example, with education in 12.1936g. The NCPC, all the institutes and bureaus incorporated into it, received consecutive numbers from 1 to 29 (except for No. 20, which was planned to be assigned to the IRPA, but not done). Research institutes formed on the basis of plants, as a rule, received the numbers of these plants. This numbering system operated until the mid-1960s, then until 1966-67. all defense enterprises received open own names.

Beginning about 1964, ob'edineniia or associations of enterprises began to be formed again (they were used in the 1920s, but were dropped in the early 1930s). And in 1968, scientific-production associations began to be formed. These are composed of at least one R&D institute, with engineering design subdivisionst and production enterprises intended to put the newly developed products into batch production. The associations were greatly strengthened by government legislation in the spring of 1974. Clearly, these scientific-production associations represented a potentially significant organizational break in the R&D production chain.

The Russian Federation inherited the largest and most productive share of the former Soviet defense industry, employing as many as 9 million workers in 1,125 to 1,500 research, design, and production facilities. Russian defense industry wage increases had not kept pace with inflation, meaning that most Russian defense enterprises had steadily lost their best workers (estimates ranged from 800,000 to 1 million lost per year) to Western companies or the emerging Russian private sector. In 1997 the Russian defense industry consisted of over 1,700 firms and nominally employed some 2.5 million workers.

While defense enterprises were found throughout the country, a significant portion was concentrated in a dozen cities and regions, where over one-third of the labor force worked in defense. Those installations were concentrated in particular regions, whose economies tend to be heavily dependent on the industry; in the Republic of Udmurtia, for example, more than two-thirds of workers and industrial capacity were attached to defense in some way in the early 1990s. Moscow has large plants for air force and missile components, and St. Petersburg specializes in naval design and production as well as infantry weapons.

A Russian defense plant was, in some ways, a throw-back to a US factory-town. A "town-forming enterprise" completely provides for urban activity and permanently participates in different programs of social purposes. Such a defense plant is really a mini-city in itself, with its own apartments, doctors, clinics, restaurants, and power plants. Outside of Moscow and St. Petersburg, defense plant employees frequently live in company apartments, shop in company stores, and eat in company cafeterias. In the 1990s up to 80 percent of a defense plant's budget went to maintaining these social services. The plant manager was often as concerned with making deals to bring in potatoes and bread to feed his people as with joint venture agreements, and these and other transactions were often conducted on a barter-basis.

In a town-forming enterprise, the life and prosperity of citizens depended on stable work for the enterprise. A town-forming enterprise concerns itself with creation of more jobs, and so would establish productions line outside the mainstream business. In the 1990s plant managers often attempted to maintain production even without budget authority to keep workers busy. This led to an excess inventory of weapons, which plant managers tried to sell, even as the downsizing armed forces also sought to sell off now surplus military equipment.

By the mid-1990s most Russian defense enterprises would have been considered bankrupt in Western terms, and the situation worsened after the financial collapse of 1998. The Ministry of Economy reported that 400 defense enterprises were unable to pay their debts. The industry needed modernization and many defense enterprise managers were eager to learn about the basics of marketing, finance, and modern business practices. Many defense plants reduced operations to only a few days per week at most.

The Thirteenth Five-Year Plan of the Soviet Union covered the period 1991-1995. The Sixteenth Five-Year Plan would have covered 2006-2010, and the Seventeenth Five-Year Plan would have covered 2011-2015. It would appear that the demise of the Soviet Union did not erase the penchant for Five Year Plans, since both the Yeltsin and Putin governments released new long range plans every five years, coinciding with the intervals that would have been covered by the Soviet Five-Year Plan. In the United States, the conterpart activity is the Quadrennial Defense Review, on four year centers. Up to 90% of all machine tools are imported to Russia from abroad. The most critical is, according to experts, first of all, for the production of ammunition. How bitterly says one expert, Yuri Shabalin, "now own the machine tool in the ammunition industry, we do not exist in the country." According to the same Shabalin, in the defense industry is now working half of CNC systems are imported. And, in his opinion, "for you can turn off a specific signal is CNC or set wrong program." Like it or not, but its machine tool industry and its machine tool industry in Russia in fact is no more. However, there are no people who could work on these machines.

As recognized by the general director of "Uralvagonzavod" Oleg Sienko in 2015, "we really did not have and do not have enough skilled workers. First of all - operators of CNC machine tools, without which it is impossible to conduct a global re-equipment." By the way, he also listed some of the areas where entrusted to him tankostroitelnoe leading enterprise in the country suffered losses from the sanctions and the lack of supply of imported components: "We are under sanctions, it means that foreign banks and suppliers can not come into contact with us. We take very seriously worked on the creation of a locomotive with Caterpillar. But two days before the shipment of the products made at the site of our partners in Latin America, the sanctions were imposed. With Renault Truck Defense we have made a good car, intended for export. And our military liked it too. But we were forced to stop these processes. With Bombardier we have the same situation ... .Byli program and with other international partners, we are forced to fold. "

"Import substitution is very important, but it can be done any day or a year or even five years - realistically acknowledged CEO of" Uralvagonzavod ", - the competence of something we have lost. We need to replace the process of the twentieth century in the process of the twenty-first century .... But leave it years. We'll have a long time to catch up with what has been done in the world." Because if we want to create the best product, "we can not sure a top manager, to create one of the worst materials using poor equipment. The entire chain should consist of the best units."

On 23 August 2020, the Army-2020 International Military-Technical Forum and the International Army Games opened. This year, the forum became the first international convention and exhibition event in the field of defense, and despite the coronavirus restrictions, international experts attended it. An important aspect of the IMTF, which is often overlooked in ceremonial reports, is a kind of report to Russian taxpayers. It is clear that an ordinary person will not be allowed to the secrets of defense accounting and at the enterprises of the defense industry no one will reveal closed budget items. However, a citizen interested in national security and defense issues can get much more information, especially on some specific sectors, as a result of visiting open areas, pavilions and stands at the Army forum than listening to the announcer's text during the Victory Parade.

The international military-technical forums Army are of great importance as the propaganda of the Russian Armed Forces, the achievements of domestic military construction and the defense-industrial complex, said Mikhail Barabanov, deputy director of the Center for Analysis of Strategies and Technologies. According to the expert, there is a big and positive contrast here in comparison with Soviet times, when such propaganda, in fact, was not carried out. This led to a belittling in the mass consciousness of the importance and role of the Armed Forces, a widespread opinion by the end of the USSR that we were backward from the West in military organizational development and in military equipment.

Now everything is different, and domestic military achievements are widely used for patriotic propaganda. As a result, the Army forums have taken an important place in this system, and at its present level, believes Mikhail Barabanov. "The IMTF" ??Army "is of great importance as an exhibition of domestic defense products, including for the promotion of these products on the world market in the form of export offers. Thus, such forums play an important role in the system of military-technical cooperation, becoming a kind of Russian counterpart to the exhibitions in Le Bourget and Farnborough. The MAKS air shows, after all, have not been able to reach this level, says Mikhail Barabanov.




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