Status of Russian Military Industrial Complex (MIC)

UVZ buys French metal casting company

MOSCOW, Dec. 3 - RIA Novosti. OAO NPK Uralvagonzavod, Russia's largest producer of cars and tanks, on Thursday closed a deal to acquire majority stake in French company Sambre et Meuse, graduating cast parts for wagons and locomotives and bogies, market participants estimate the amount of the transaction in the 20 - $ 30 million, writes in Friday's Kommersant newspaper quoted a source at the plant.

The deal was accompanied by an international law firm Hogan Lovells. Partner Hogan Lovells Xenia Legendre, confirmed to Kommersant the fact of completion of the transaction, without revealing the value of the asset. According to her, looking for factory sites in Europe to produce castings with a mid-summer. "We considered several options, but ultimately decided to stay on the Sambre et Meuse", - the newspaper quoted Legendre. She said that the paper purchased from a private industrial group, without specifying the beneficiaries.

Owner Concern "Tractor plants" Mikhail Bolotin, who acquired the foundry facilities in Germany, told the newspaper that on average these plants are sold from 1 to thousands of dollars for one thousand tons of tons of suitable casting (excluding marriage). Plant Sambre et Meuse is estimated at 20-30 million euros, but admits that Uralvagonzavod bought it at a premium for the technology and control.

Site Sambre et Meuse states that the plant produces trucks for rolling stock, as well as other cast parts are used in the manufacture of locomotives, trams and metro. Shares of production of castings in the total production is 60%. Also, the plant produces the sewer manholes, grates for drainage and metal fencing. Financial figures were not disclosed. Phone company, on Thursday did not respond.

The source of Kommersant at Uralvagonzavod says Sambre et Meuse will supply the new owner of cast parts for trucks, side frames and other parts for freight cars. "At the factory of its cast is not enough, exports from France must close our needs," - says the source of the newspaper. In 2010, Uralvagonzavod release 19,000 cars instead of the planned 24 thousand units of rolling stock Source Kommersant adds that Sambre et Meuse now supplies components for London Underground, Singapore, as well as companies Bombardier and Alstom. "This part of the business will not be redirected to our needs" - explains the "Uralvagonzavod.

The head of analytical research and marketing company Brunswick Rail Bovykin Dmitry told Kommersant that the market has long been considered the issue of import casting from abroad, as available in the CIS companies can not cope with the demand for components. Expert explains this surge in demand for cars in 2010 and the increase of car repairs due to auctions RZD, which this year sold 40,000 require repair gondolas.

According Bovykin, carry casting will now benefit even from the U.S., because there are "cost of casting kit costs around 4-5 thousand dollars, in Russia, the car sets the price up to 25 thousand dollars."

Cyril Tachennikov from UBS does not exclude that the acquisition of foreign sites Russian vagonostroitelyami in case of continued high demand for cars will continue. Prices for cars are now high, adds the analyst, and businesses have the opportunity to acquire assets.

JSC "SPC" Uralvagonzavod produces armored vehicles, railway rolling stock. 100% owned Property Management Agency.

While that is directed more at the railcar side of the business, it points to the escalating cost of production. $25k to cast a railcar in Russia, 5X less in France or US. Apply this knowledge to tanks and one understands why investing in UVZ modernisation is so important. And the state leaves it to rot.

State corporations must radically increase spending on R&D

Dmitry Medvedev, announced this at a meeting of the Commission under the President's modernization and technological development of economy of Russia. The meeting was devoted to the issue of introduction of scientific research and experimental development (R & D) by large companies with state participation.

In early 2010 the President instructed the large state corporations and the Government to develop innovative development program and provide a significant expansion of R & D expenditures. Term performance of the assignment the head of state expired at the end of last year. According to the Ministry of Economic Development, the work is done by only 40 percent, only one-third of companies ready for your approval innovation development programs.

Dmitry Medvedev criticized the agency and state-owned companies for non-presidential assignments in the field of innovation policy. The main reason, according to Dmitry Medvedev, is that the leadership of relevant ministries and state corporations still do not perceive this problem as a priority. Another problem head of state believes the lack of state-owned companies top executives, specifically responsible for the innovations.

The President instructed the Presidential Administration and the Government to make proposals on the personal responsibility of heads of major state-owned companies that do not pay attention to innovation. In addition, over the coming months the state corporation should refine and adopt its innovative development program.

Prior to the meeting, Dmitry Medvedev held a working meeting with the governor of Nizhny Novgorod region Valery Shantsev. The focus of the meeting was devoted to the activities of local leadership in innovation.

The President also visited Arzamas Research and Production Enterprise "Temp-Air, where he developed gyroscopic instruments and devices for aircraft of all types. The company annually invests more than 170 million rubles in the development and introduction of modern technology, of which 38 million rubles for the research and development.

Russia to invest $100 bln in defense industry until 2020
Sergei Ivanov

Russia will invest 3 trillion rubles ($100 bln) in the development of the country's defense industry in the next decade, Deputy Prime Minister Sergei Ivanov said on Monday.

"We have prepared a state program on the modernization of the defense industry until 2020 with a budget of 3 trillion rubles," Ivanov said after a meeting of defense industry officials in the southern Siberian republic of Udmurtia.

Russia will invest 77 billion rubles ($2.6 bln) in the production of ballistic missiles alone in the next ten years.

Ivanov said a ballistic missile production holding will be set up with the participation of Russia's Federal Space Agency. The holding will include the Moscow Institute of Thermal Technology, which designed the Topol and Bulava missiles.

Prime Minister Vladimir Putin said at the same meeting that Russia would double production of ballistic missiles after 2013.

http://en.rian.ru/mlitary_news/20110321/163131244.html

The goods news is that delivery is up 17% from 2009 but it is 30% short of what is demanded. The order demand has yet to be great.

It still think the fundamental problem at the moment is that the Russian military and Russian MIC are communicating via media.

I think there needs to be a linking organisation that ensures communication between the two so the MIC and the military can plan properly.

An example is UVZ. They are told their T-90 is a T-34, they are told it needs an upgrade and the tank you have been developing to replace it is a cold war dinosaur and BTW it is cancelled.
UVZ has product facilities to turn out 1,000 tanks a year but it gets little or no warning about production requirements. Should it shut down and sell its production capacity and save a lot of money... only to get an order next year for 500 tanks? Of course it has to guess what production capacity it needs for next year because the military wont tell it what its plans are... assuming it knows what its plans are... so as insurance they maintain the production capacity to fill jobs they might or might not get. The government wont pay for that, it comes out of UVZs profit from its Rail division... which is hardly fair for them is it? I am sure they want to expand and retool and give the workers pay increases.

Russia needs an organisation that looks at new technology and its military implications and to form requirements based on what the military could use and what the MIC can achieve. There is no point in keeping all technology secret within its sector. A sophisticated cooling system for spacecraft might be useful in armoured vehicles and submarines but you only want to develop the technology once and adapt it to different applications.

30 years ago if someone had suggested a small portable phone you could carry around with you and take photos with it, I would have asked why anyone would want such a thing. Now some people can't do without it.
Often the real talent is linking new technologies to new applications... for example embedding Bluetooth wireless transmission technology into a digital cameras flash memory card allows someone to take photos with a small portable digital camera and save photos taken directly to a laptop on their knee.
Two different unrelated technologies used together for a new application.

For the military replace that laptop with a palmtop that is part of the communications system and a recon operator can take digital photos that are linked by bluetooth directly to his encrypted satellite link and sent directly in real time to HQ that is 10,000km away in Moscow.

GarryB wrote:It still think the fundamental problem at the moment is that the Russian military and Russian MIC are communicating via media.

Russian military needs to sell MIC wares when they think it is junk? That would be lying wouldn't it?

They need first of all to separate out what they think is junk... I rather doubt they are talking about Su-35s being junk and below NATO and Chinese standards.

In fact instead of trash talking they should compile a confidential report listing what they like and what they don't like... and more importantly why they don't like it and pass that on to the relevant makers.

Airing their dirty laundry in public is just counter productive... if some third world country is happy buying upgraded T-72s why should the Russian military care?

Venezuela seems happy with its AK-103s despite them being 7.62 x 39mm calibre warmed over AK-47s.
I have read India is looking at changing calibre to 7.62 x 39mm ammo... which is quite interesting.

There is certainly room for experimentation... perhaps loading 90 grain bullets from 7.62 x 25mm Tokarev ammo into a 7.62 x 39mm case with a larger than normal propellent charge to get muzzle velocities up to almost 900m/s might be something worth trying.

Vlad, you posted an article a while back about a lack of development in the small arms ammo sphere... perhaps new more modern propellent that generates muzzle velocities of 1,000m/s for standard 30 cal 120 grain bullets as used in the 7.62 x 39mm round could flatten the trajectory and increase the terminal effects.

A drop in calibre to 6mm created world class bench rest rounds still dominating the ranges today out to 300-400m or so... with current powders.

I agree there are just taking their personal view or frustration in Public.

The statement on T-90 is very damaging considering most believe its devoid of facts and gives a bad name to Russian industry.

I just wished the Army Chief got kicked out for falsifying information to the parliament

Russia Defense Industry Fails To Deliver

Russia’s defense industry has failed to fulfil major arms contracts, President Dmitry Medvedev said on Tuesday, warning top government and industry officials they would be held responsible.

“The work is going very poorly and slowly,” Medvedev told officials during a televised meeting. “It is unacceptable when decision are taken—and at the highest level—money is allocated but the product is not delivered.”

In an ironic allusion to Stalin-era forced labor camps, Medvedev said: “In past times, half of the people here would be doing physical exercise in the fresh air.”

A day earlier, Russia marked the anniversary of the end of World War Two in Europe with its annual display of military might and parade through Moscow’s Red Square.

Medvedev pledged to arm Russia’s forces with the latest weapons and push reform of a military plagued by low morale and poor equipment.

Despite its status as the world’s second-largest arms exporter, military analysts say Russia’s defense industry has stagnated since the collapse of the Soviet Union, relying on outdated designs.

The industry’s shortfalls and the need for an overhaul of the army’s own aging hardware were exposed during Russia’s five-day war with Georgia in 2008 and by the economic crisis of 2009.

“The situation in the weapons production cannot be called a happy one, and everyone here present knows that,” Medvedev told officials, ordering them to meet the country’s overdue procurement contracts by the end of this month.

The Kremlin chief reminded officials he had signed off on orders for 30 ballistic missiles, five Iskander short-range missile systems, 300 armored vehicles, 30 helicopters, 28 fighter aircraft, three atomic submarines and a corvette class warship in November 2009.

Russia has earmarked 19 trillion rubles ($685 billion) over the next decade to equip its forces but arms spending still lags behind that of leading Asian and Western powers.

source

Despite its status as the world’s second-largest arms exporter, military analysts say Russia’s defense industry has stagnated since the collapse of the Soviet Union, relying on outdated designs.

The Russian military industry stagnated because there were no orders and no money for 20 years.

The last 10 years there has been talk of money but nothing actually tangible.

During a period of stagnation there of course will be a reliance on outdated designs... development costs money, new technologies and tooling to make new designs costs money.

The best most companies could do was create a few prototypes, but without money that is all they are.

Place an order and give them money doesn't instantly fix things. There are bills to pay... people who stood by your company to pay... people to hire and train... and then a prototype weapon to complete the testing and development of.

Once it is ready for production you need to buy new tooling to make the new product and of course then you need to train up a skilled workforce to build the new product on the new machines. You need to pay subcontractors to make all the components and supply them.

Then you start production.

Sounds straight forward... except it is an expensive and time consuming process... and not something that can be done for an order of 20 products.

They will spend a lot of time sourcing components... the flash western bits and bobs look nice and have good performance but they are expensive and there is a lot of negotiations and red tape to get them imported. Local production components are in the same boat you are in and are in the middle of retooling and retraining... or there is simply no local alternative.

The huge problem is that when progress isn't to his satisfaction Medvedev seems to like to fire people rather than examine what is wrong.

Often I suspect the problem is the way the system works and rather than firing a scapegoat it would be better to examine how the system works and modify it to make it more effective and more efficient.

Instead someone gets fired and whoever gets the job is suddenly thrown in the deep end and told to swim.

Such is the way of defence industry and product,remember the lowest bidder always wins the contract.Perhaps the old state work houses were the key factors in defraying cost overruns.We in the west lost most of our well paid unionized industrial workers in favour of labour rights-wage roll backs and non unionized labour,mostly to 3rd world economies.... slave labour beats them hands down.Where there is a whip there is a way!

the biggest problem is the corruption which eats the money given to actaully any sector

“It is unacceptable when decision are taken—and at the highest level—money is allocated but the product is not delivered.”

not even talking about new designs the defence industry FAILS to deliver even on already signed PAID arms contracts, they are pathetic corrupt scum!

"some" people don't need to be fired..., they need to be put for a firing squad!

I don't know what the author referred to as OUTDATED DESIGNS...Does he want Russia to develop things like F-22 & F-117; when they can be brought down by missiles 10% of their cost...or even less!!
We as engineer had seen that many OUTDATED designs can stay & perform well while remaining economical even in 21st century.

NationalRus wrote:the biggest problem is the corruption which eats the money given to actaully any sector

“It is unacceptable when decision are taken—and at the highest level—money is allocated but the product is not delivered.”

not even talking about new designs the defence industry FAILS to deliver even on already signed PAID arms contracts, they are pathetic corrupt scum!

"some" people don't need to be fired..., they need to be put for a firing squad!

My words spoken!
The biggest problem is corruption. And i do support the introduction of death penalty for big thefts of money.
I do support that. Because this is causing lots of homeless people, starving people, people with no salaries beside other problems.
Retooling isn't that much of a problem. Even the education of workforce. One thing is having educated workforce enough, and the other thing is having skilled workforce.
Most of the time you need educated workforce. Skilled workforce is not that much needed. Skilled scientists however are needed the most. Because you usually develop new weaponry based on your existing experience with the old weaponry. If you don't have the experience - it is that much more difficult to meet the future needs.
Another problem here is industry automation. There are not that much of Russian companies producing industry robots. I know of only Avtovaz subunit.
There are foregin companies to produce milling machines and robots with CAD and CAM software to significantly reduce the production time and costs. However these companies products are priced very high - on the other hand, if you do have the money to pay them - many times over you can watch in awe how small is the time they need to equip your production line with automation tools. Usually just a matter of weeks. And the workforce? I know that young Russian people do not want to work in manufacturing behind the assembly lines because of the wages. But some Kazakhs, Kyrgyz, Uzbeks or Chinese would be more t han willing to do so. Russia just need to throw away all the racism and open their job market to them. They need production but mostly they need to totally brutally wipe out the corruption in a most gruesome way. Thats my opinion.

I concur whole heartedly,the modern capitalist industry has become unhinged from the concept of the nation state.How viable is defense when multi-national corporations are in full power.The loss of the professional industrial workforce of society will unhinge all nations which seek to preserve an identity above Gq and the Fortune 500 club.

Considering the state of Russian military industry in the nineties, now it works extremely well. Maybe the progress of production is not as big as some expect, but production is increasing from year to year.

We don't make a profit selling the US rocket engines

NPO Energomash sells Russian rocket engine RD-180 for U.S. rockets of the Atlas-5 "for half the cost of expenses for their production, described in the materials of the Accounting Chamber.

"In this regard, only in 2008-2009, a loss of their sales totaled about 880 million rubles, or nearly 68% of all losses Energomash - noted in the materials.

RD-180 engines have been designed and certified for use on U.S. rocket family "Atlas" on the order of Lockheed Martin (since 2006 a joint venture of Lockheed Martin and Boeing - EULA ").

Automated production tools and CAD design is not cheap, and for companies that have had no orders for decades buying a multi million dollar machine to replace machines that already do the work... though not as efficiently as the new tool will is hard to justify without a concrete order.

If you are selling a rifle then the money you get from the Russian military is not all profit you can do what you want for it. You might make 5% profit per rifle if you are lucky after all the costs and expenses are covered. Unless you are selling a million rifles at a time you can't afford multi million dollar machines all in one go.

To retool a factory you need lots of work and good profit margins so you can go to a bank and say look I am doing really well, but I would like to upgrade the tooling in my factory so I can make an even larger profit... give me a loan of 10 million dollars.
I can buy this, this and this tool machine from Japan that will improve production efficiency by increasing production and reducing waste materials and reducing staff costs.

Workers in the factory go from operating lathes and other tooling, to programming an automated lathe and monitoring and checking for better quality control.

When the loan goes through production of course drops as the new tools are introduced, new problems sorted out, and the work force is trained to operate the new equipment. Eventually production increases and productivity improves.


The problem is that most companies have only been getting real hard orders in the last 2 years or so. Another problem is that when the Russian military orders 48 new Flankers they don't hand over the money for 48 new flankers... they hand over about 20% of the cost to get the company started and offer low interest loans to cover the rest.

The point is that most weapon systems are not made just by one company. Sukhoi makes planes... but it doesn't make jet engines... it doesn't even make multifunction display units for the cockpits... and it doesn't make radars.

When Sukhoi makes money selling planes to China or India that doesn't mean that all the Russian companies that make components for the Flanker make money or produce anything.

India and China might choose different MFD displays for their cockpits for example so when the Russian Military orders 48 planes this Russian company that has no produced much more than prototype systems for a few prototype Su-35s all of a sudden needs to make over 100 displays to a high standard and a low price... the thing is that this company might be the only Russian company making LCD displays so all of a sudden they need 150 for the Su-35s, just under 100 for the Mig-35s, and the Su-34s need 7-8 each and they will make 36 of those, and the Mi-28N will need some for each cockpit as will the Ka-52. Big deal I hear you say... but this is the only LCD maker in Russia so they need another 5,000 screens because the new SAM systems like Pantsir-S1 and BUK and TOR and S-400 all use lots of screens and all the new ships and subs... even the small ones need dozens of screens as well.

The problem is that everyone is paying for the product but nothing for expansion of production facilities and new workers... up until the last few years there were only prototypes that needed screens so a company of 10 people was good enough.
To meet the new demand they need much more production capacity and lots more people which means more people to manage all those extra people too... and probably several shifts to larger premises as well.

Garry sounds like you are trying to believe the globalist lie and the continuous improvement serpent.A viable state needs a stable workforce, not computer driven production and tax breaks to a manufacturer who injures the state by throwing employees on the public dole.Viability versus accountability is the question ,moderated technical application to ensure stability is preferble to the anarchy of large scale unemployment .Unless we unfurl the Roman banners and promise free bread and circuses to the mob,the option of Schwartenzeggars "Running Man" food riots in every major city seems imminent.

Garry < Ehm i think if you order 48 new planes, you need to pay more than 20% to get the production online. But at the end you need to pay the rest.
When it comes to Russian state orders i think the deals are done so that even if 100% of the sum is not paid before start, it is such amount high enough to get the factory running, nut just the factory but its subcontractors as well. In other words engine, radar, avionics, electronic components, weapon systems, weapons, fuel. Right now they DO have money, and not just small amount of money, but a lot of money. When it comes to retooling. There are 2 things to say. Imagine this. For example for industry automation you need CAM software right? There needs to be a team of programmers to develope it. In Russia for example one hour of programming might be paid by 40$, in USA or Japan it is 60$. The resulting software might be comparable by quality however in USA and japane megacorporations invest tons of money into marketing,and thus it might seem like the russian product is total sh*t. So the russian company altough with lower price is having difficulties to find customers while the western one is in paradise. Are the Russian people somehow differrent than the US one so that americans deserve better salary? You know what im pointing at right? So the expensive retooling is expensive not because of the technological complexity, rather because of the capitaistic form of price speculations. If the Russian goverment will sponsor domestic companies (which i believe it is), it is only a matter of time when they will develop broad spectrum of products to cover all the domestic industry market needs and THEN you will see how cheap it might be to equip a factory with modern automation systems. Second thing is... even if the tools are expensive, goverment is still giving support by non-returnable state loans. In other words, if your company/project is promising - state comitee for economic development might approve you this financial injection which you don't have to return. And those are by no means small money.

You have to admire how the US funds things.

Illegal immigrants (slaves) were brought up into Alaska to build the new F-22 hangars. Somebody must have been threatening the Air Force General at that air base about it because he killed himself.

High ranking General making more money than most people in the world and he killed himself. Maybe why Alaska Governor had to resign as well Sarah Palin.

Then big military construction on Guam using Chinese laborers....A bunch of chinese marched down the road to the Guam Department of Labor complaining they weren't getting paid...ha ha ha!

Sometimes the best things in life are free.....if you can get slaves to do it.

Garry < Ehm i think if you order 48 new planes, you need to pay more than 20% to get the production online. But at the end you need to pay the rest.

From what I have read the standard procedure was to pay 14% of total price and offer soft loans from government controlled banks to cover the actual costs of getting ready for production.

Personally I think they need to examine the situation in each case closely as some factories can operate with that sort of payment model because they have had work all these years for export and with export sales the extra profit margin has made retooling and keeping skilled staff easy so they are in a position where such a payment scheme is ok.
For other companies things are not so good... of course if their product is crap and that is why it hasn't sold... because only the Soviets and the former warsaw pact countries bought it because they couldn't use anything else... then the situation is probably to fund development of a newer more useful product, or to change their production to something the Russian military does need... both of which costs money for very little initial return, but results in real gaps in technology or equipment being filled by local companies.

A good example is thermal sights... a T-80 with a brand new Soviet thermal sight in the 1990s could see and kill targets out to 2,100m in total darkness.
The purchase of a licence production agreement means that instead of making that Soviet Thermal Imager they now make the French Catherine Thermal sight, which depending on the conditions allows the tank to see and kill targets out to 5-8km range in total darkness.
Clearly the improvement in performance is well worth the money spent on licence production.
The company licence producing the new sight has been retooled and is working with new materials and new production tooling, so any new Russian or French and Russian developments already have a modern production base to work from.

If you decide to invent a new rifle you don't start with a wooden tube with a flash hole and then work your way up by adding rifling and a lock etc etc.
You start looking at existing new systems and look at the design.
Every design choice is for a reason and each choice has an advantage and a disadvantage.

For instance people look at BMPs and think they are too lightly armoured... they are all less than 20 tons while western IFVs are 50% or more heavier. The simple fact of the matter is that there is a requirement that Russian IFVs are amphibious which the western designers don't have to care about.
It is not that the Russian designers of IFVs don't care about the survival of the soldiers.

Right now they DO have money, and not just small amount of money, but a lot of money. When it comes to retooling.

The problem is that the Russian military don't care about the Russian MICs problems. Their problem is that they need to get x percent of new stuff into service by x date.
When they make an order they don't include extra money for factory upgrades or tooling or staff training. That is the problem of the factory manager and they have to do that out of their own funds.

If the prices paid by the Russian military were covering all the factories costs then there wouldn't be a problem.

Medvedev himself mentioned the problem of attracting investment into the MIC so that Russian military contracts are not the only money the MIC gets. The big profits for the MIC are with export orders so there is plenty of scope for investment as the potential returns are actually pretty attractive with the right products.

Link here: http://en.rian.ru/mlitary_news/20110510/163957676.html

For example for industry automation you need CAM software right? There needs to be a team of programmers to develope it. In Russia for example one hour of programming might be paid by 40$, in USA or Japan it is 60$. The resulting software might be comparable by quality however in USA and japane megacorporations invest tons of money into marketing,and thus it might seem like the russian product is total sh*t.

Except that the industrial robots probably come from Japan and the computers and software to control it probably came as a package deal, but I agree with the point you are trying to make about money being used to market products making them appear better than they are and the lack of such money being spent on Russian products in general.

So the russian company altough with lower price is having difficulties to find customers while the western one is in paradise.

And not just the money invested in marketing... there is a general stigma in many places in the world against Russian products... The west has seen Russia as an enemy for so long this will not change over night and the west is where a lot of money is.

Are the Russian people somehow differrent than the US one so that americans deserve better salary? You know what im pointing at right? So the expensive retooling is expensive not because of the technological complexity, rather because of the capitaistic form of price speculations.

I see where you are going with with this, and I agree... but.

Most people don't realise there are some technologies that are critical to a modern country. Some of these simply don't appear on the surface to be that important but are completely critical to all sorts of things.

One is time keepers. Why is Navstar in its military form so accurate? Because it has the most accurate timekeeping technology available. The more precise the time keeping the more accurate the positioning of the satellites the more accurate they are for navigation.

A second is quality machine tools... some are robots, some are just large machines. The best come from Japan.
In the 1980s Soviet submarines suddenly started to get much quieter... and it was no accident that this occurred just after they got a precision milling machine from Japan.

They knew what shape propeller would make their subs much quieter but they didn't have the machine tools accurate enough to create the correct exact shape to achieve such a shape... till they go a more precise milling machine able to handle lumps of metal that size.

What I am saying is that rather than being able to build T-90AMs what the Russians should be aiming for is to produce the most accurate clocks, the most precise machine tools, powerful supercomputers, etc etc. These are not products in themselves but they can greatly improve the performance of the products you do produce.

In a way they are a force multiplier... like a Thermal sight.

It makes a tank much more effective during the day and makes it effective at night as well. Such technology can be applied to all weapons systems to give night and all weather capability... and even during the day it sees through dust and smoke and light foliage and many primitive types of camouflage... it is not cheap, but gives you a whole new level of capability over those not so well equipped.

If the Russian goverment will sponsor domestic companies (which i believe it is), it is only a matter of time when they will develop broad spectrum of products to cover all the domestic industry market needs and THEN you will see how cheap it might be to equip a factory with modern automation systems.

The last 5-10 years the Russian military and the Russian MIC have been communicating their problems and wishes via the Russian media. If the government was already investing in the Russian MIC the Russian MIC would not need to get articles published to get a response from the Russian military.
How does UVZ plan for the future when it finds out about Russian military orders for tanks in the newspaper?
UVZ has a cold war level production capacity so it could make 1,000 tanks per year, but it is getting orders much smaller than that most years and this year none.
Does the manager close down production capacity and save money and hope there is no sudden order for 1,000 T-90AMs.

If you look elsewhere on this forum you can see articles with interviews with UVZ and they seem as confused as we are about what the Russian military wants or needs.

It seems there is little communication between the Russian military and the MIC and until that changes there will remain problems.

Even just having the UVZ factory manager being told that there wont be orders in 2011 but there are plans to make x number of T-90AMs by 2015, or even we havent decided yet but it will either be we will order nothing till 2015 and then we only want Armata and upgraded T-72s, or we want Armata and T-90AMs as our future tank force at least UVZ could make some long term plans so they will have the tools and materials and skilled workers ready at the right time and not just sitting and waiting for the call to build.

Second thing is... even if the tools are expensive, goverment is still giving support by non-returnable state loans. In other words, if your company/project is promising - state comitee for economic development might approve you this financial injection which you don't have to return. And those are by no means small money.

A non returnable state loan is a Handout and they are getting reduced interest loans.. not handouts.

If they were getting handouts they wouldn't need investment.

Russian military don't think of problems in MIC because of Serdyukov. He is a manager and he thinks in numbers and his goals to achieve during his timetable.
Meaning that if there is a factory that was producing tanks last year, then there will be no problem if the factory will have half year stop and then produce the same tanks of the same quality. Thats the managers thinking. We will give you money.... you take care of the rest. And we don't care how you will do it, just do it... thats the typical manager thinking. He does not have the clear overview what problems the factories might run into... because he is not an expert on retooling or anything like that and his subordinates that might have expertise with this are usually silent because Serdyukov is known to be hot tempered against people that do not share his opinions. Another thing is Popov. Popov to me was a pure idiot. Instead of mediating between MIC and Ministry of defense he was clearly Serdyukovs puppet. and in my opinion Poppov is the one totally useless running project overseeing of T-95 only to come out and tell Uralvagonzavod that T-95 is not needed. I might know what was Putin and Medvedev thinking when they got Serdyukov as Defense Minister - the old grandpas with their "our huge numbers will solve everything" kind of thinking had to be put out. Russia by population is not as huge as soviet union so the entire military doctrine had to change, and with this change also people had to change. There is this old saying you cannot teach an old horse new stuff. But people in the ministry do need to think of the industry and its problems. On the other hand you have to also think that in the industry there are some greedy oligarchs that would like to get paid and deliver shit or deliver the products too late. One example is the Indian Aircraft Carrier INS Vikramaditya. The end of overhaul was reportedly delayed by couple of !!!!years!!!! due to some "problems" and entire project became significantly more expensive. Clearly somebody got their pockets full here. Im absolutely convinced that if there were true problems the project would be delayed no more than a half year and not by 3 years! Thats just utterly unacceptable! Guys in Sevmash can say goodbye to another carrier deals from india and not just india. The same was with Algerian Mig-29 scandals. Algeria paid full price for brand new migs. Instead somebody wanted to be smart and wealthy so he ordered the guys to dissasemble old migs and put some parts into the new ones. When you are the military industrial complex representative and you are doing a deal with govermnent about brand new product requiring new technology, it is normal that you will take into account also budget needed for retooling and education of workforce. Thats absolutely normal. Nobody would pay the retooling and education from the company pockets unless the company has made significant profits from previus exports.

And when it comes to develop new stuff. Most of the time you are right Garry you need to look what others have and start from there. But it is know that Russia nad China often does have innovative approach to certain things and this approach often needs to reinvent the "wheel" totally from scratch. Remember the coaxial rotor system? Remember the legendary K36 ejection seat? The guys here had to throw away the conservative thinking and start from beginning. Scramjet is a perfect example of this. People want to have faster planes? Ok. But instead of making the current jet engines more powerfull how about focusing on developing a completely new engine working on new physical principles. But i have no doubt you know this

Now what i am about to tell you migh sound completely shocking but: Japanese industrial robots are not actually that good. Market leaders in this segment are ABB and Kuka robotics. ABB a Swiss company, Kuka German one. ABB and Siemens are leaders in complex industrial solutions including CAM, CAD software. Germans and Russians are very close to each other - if you know this, it starts to make perfect sense why is that. But you are absolutely right. You cannot have a world class industry focusing only on the big picture of building ships, planes, satelites, rockets, cars. You need a complete support industry as well. Something what we call business machines. In other words products that are not meant for end-user customer, but that are meant to support the core business of other companies. that would be for example point of sale, kiosks, networking hardware, data center server clusters and so on. Russians do know this very well and they DO have companies focusing in their respective areas. But ultimately everything comes to the single most important point. Which is... you need state of the art electronics industry. You need to have a processor capable of raw computing power ideally equal or even better than best foreign counterpart. Very large portion of your economys destiny lies in this single fact. If your economy has to import such processor, you are not only dangerously dependent on foreign technology and in such case a state embargo can turn you to your knees, but you are also prudent on what is called hardware hacks. In other words your processor might have a secret functionality unknown to you, which might cause a lot of troubles. Currently in Russia there is one very promising company specializing in High Performance Computing, its name is T-Platforms http://www.t-platforms.ru
Another thing Avtovaz is investing into industry automation tools also based on CNC -> http://robot.vaz.ru/
Russia do have also couple of companies producing electronic chips.
I remember that starting arround 2000 there was a huge story that some moscow computer scientific institutedeveloped microprocessor more powerfull that Intel Itanium. They dubbed it Itanium killer. Official name of the CPU was Elbrus. Russia has so called fab-less design studios. Which can basically design very powerfull chips, but they don't have the facilities to manufacture them. Current top class chips are in 32-45 nano meter process. I think Sitronics Mikron in Russia is building a factory with manufacturing process of 65 - 90 nano meters. Which in my opinion is ok but this would not be enough. I know that Russians have pumped significant amounts of money into nanotechnologies and it seems to me that they want to leap over the 32-45nm step and end up ahead. However im not sure to what degree this will be a successfull strategy. However what i am saying here that if they will be carefull enough, they can catch up with the rest very quickly and take over the lead in High technology sectors like the military one is.

Thanks for posting Flanky... interesting info and links...