Category Archives: Defense Industry

New SSBNs Won’t Serve as Multipurpose Submarines

Failed Bulava Launch on 6 September (photo: Northern Fleet Press Service)

Failed Bulava Launch on 6 September (photo: Northern Fleet Press Service)

The Russian Navy doesn’t intend to use its two newest Borey-class nuclear-powered ballistic missile submarines (SSBNs) without their Bulava missiles in a multipurpose role.  Not even temporarily.  At least according to one source.

On 1 November, a Navy Main Staff source told ITAR-TASS that operating the new SSBNs without 16 Bulava (SS-NX-30) submarine-launched ballistic missiles would be analogous to employing Tu-160 strategic bombers like fighter aircraft.

Earlier, however, RIA Novosti reported the Navy might accept the two Borey SSBNs for “experimental” use without Bulava missiles, citing a highly-placed General Staff source.

A submarine in such a status would not technically be in the order-of-battle.  Russia’s first Lada-class (proyekt 677) diesel submarine Sankt-Peterburg currently operates “experimentally” in the Northern Fleet.

The General Staff source said, without their primary armament, Borey hull 2 Aleksandr Nevskiy and hull 3 Vladimir Monomakh could serve temporarily as multipurpose submarines. Their crews could fulfill non-strategic combat training missions until problems with Bulava are resolved.

Both new SSBNs were ready for fleet acceptance before the end of 2013.  Vladimir Monomakh just completed sea trials in early October.

On 6 September, Defense Minister Shoygu stopped the acceptance process for both submarines after an unsuccessful Bulava test launch from Aleksandr Nevskiy. Before that failure, the missile had five consecutive successful launches in 2010-2011.

The Navy accepted the first Borey-class submarine, Yuriy Dolgorukiy, in early 2013.

Air Forces Half Out-of-Order

"OAK-Service" Initial Corporate Structure (photo: Kommersant)

“OAK-Servis” Initial Corporate Structure (photo: Kommersant)

Kommersant’s Ivan Safronov and Yelena Kiseleva wrote Monday (28 October) on the status of devolving Oboronservis’ Aviaremont into a subsidiary of the United Aircraft Corporation (OAK).  In the process, they indicated less than half of Russia’s combat airplanes are serviceable.

Aviaremont enterprises will become OAK-Servis subholdings.  The factories will repair aircraft for the Defense Ministry, and for other power ministries and agencies.  OAK and the MOD already have an 84-billion-ruble contract for repairs in place.  Meanwhile, Aviaremont owes the MOD 115 billion, which OAK has promised to make good.

OAK-Servis is supposed to provide life-cycle support for MOD (mainly VVS) airplanes.  And it will “correct an unfavorable situation in the condition of the current inventory of the Air Forces, which still aren’t guaranteeing the necessary level of technical combat readiness,” Kommersant writes.

OAK-Servis will establish service centers and 24-7 mobile repair teams, then, in 2015-2018, modernize capital equipment in its repair plants.  It will also grapple with a problem it can’t solve in the short-term, “the cessation of industrial output of components and systems used in the repair of old aircraft models and the rising price of spares and parts.”

But OAK believes it can ensure a profit for plants that once belonged to Aviaremont.  Ruslan Pukhov tells Kommersant less money in the next GPV means less procurement and more repairs and modernization after 2020.

Now for the interesting part . . .

In a sidebar, the authors describe the parlous state of technical readiness in the Air Forces.

All VVS units are supposed to be in “permanent readiness,” with not less than 80 percent of the airplanes in their established composition in a serviceable state.

But Safronov and Kiseleva report only 42 percent of VVS airplanes overall, and 49 percent of its combat airplanes, are serviceable.

The most serious situation with fitness for flying is found in Tu-160 and Tu-22 [Tu-22M3] bombers, the MiG-29 and MiG-25, An-22 transports, L-39 trainers, and others for which serviceability hovers around 20-25 percent.

In 2013, the VVS had 696 airplanes in need of repair, but as (or if) new ones reach the inventory toward 2020, the number in need of repair will reportedly decline to just 49.

The sidebar says, along with repairing MVD, FSB, and MChS platforms, OAK repair plants will also have to maintain and overhaul exported airplanes.

Recall for a moment the MOD’s Action Plan to 2020 . . . the section on equipping the armed forces indicated year-end VVS aircraft serviceability rates will be 55 percent in 2013, 75 percent in 2014, and 80 percent in 2015.

These numbers require pretty fast improvement.

Re-Industrializing for Military Modernization

Golts

Golts

It’s been Golts overkill.  Despite the risk of overdosing, he has an article in Ogonek from 25 September which merits attention.

One could do much, much worse than to pick him, if you could read only one commentator.

Golts tries to explain why Russia’s OPK, its defense sector, has failed.

He gives prominent examples of defense industrial shortcomings including the most recent Bulava and Proton-M failures.  Interestingly, he says all serially produced Bulava SLBMs are being returned to Votkinsk for inspection.

Calling the list of failures “endless,” he concludes, “Production standards are falling uncontrollably not only in the space sector.”  He continues:

“The thing is not only particular failures.  Experts from the military economics laboratory of the Gaydar Institute suggest that defense order 2013 will be disrupted just as it was in previous years.  According to their data, defense order 2012 was revised and lowered at least three times.  And still it was unfulfilled by approximately 20 percent.  Accounting Chamber auditor Aleksandr Piskunov was extremely forthright in the Duma hearings:  ‘Almost one hundred percent fulfillment of state defense orders for the last 20 years hasn’t interfered with the failure of all armaments programs, with fulfilling them at 30, 40, 50 percent.'”

You may recall reading Piskunov here at the start of April.

Then, Golts notes, Putin himself cast doubt on the OPK’s ability to fulfill the current GPV.  He recalls the late July meeting when Putin indicated he’d entertain slipping ships and submarines due after 2015 into the next GPV (to 2025), so that there aren’t more “failures.”

Putin said work should be organized so producers’ capabilities coincide with the allocated funding.  Money, he said, shouldn’t be hung up in accounts [and stolen] while we wait for ships.  Golts reads this as Putin recognizing that the state of domestic industry is such that it can’t assimilate the gigantic sums allocated to it.

The defense sector has structural problems that endless calls for mobilization to face an aggressive West can’t resolve (i.e. a workforce that’s almost reached retirement age, continued aging of basic production equipment).

Golts again turns to Piskunov, who said only 20 percent of defense enterprises approach world standards in terms of technical equipment, and nearly half are in such a poor state that resurrecting them is senseless — it would be better to start from a “clean slate.”

But Golts focuses on poor coordination and cooperation among enterprises, government customers, and sub-contractors.  He turns to the familiar case of Bulava — 650 different enterprises reportedly have a hand in turning out this missile.

Most damning, Golts compares today’s “so-called united state corporations” unfavorably to Soviet-era defense industry ministries.  Ineffective and bureaucratized, the latter still managed to manufacture massive numbers of weapons.  And Gosplan matched prices for products and production by fiat.  Today’s goskorporatsii can’t.

There’s another important difference, Golts points out.  All Soviet “civilian” industries also produced arms, or parts for them.  Average citizens buying civilian goods helped finance military production with their purchases.

But the largest part of this permanently mobilized industrial system died in the 1990s and surviving parts retooled for other production.  Many in the latter category no longer wanted part of the defense order which would only make them less competitive in their main business.

Then Golts concludes:

“But it’s impossible to begin serial production of armaments without serial production of components.”

Today’s OPK chiefs don’t have the talents of some of Stalin’s industrial commissars, says Golts.  They are, however, good at blaming ex-Defense Minister Serdyukov for “destroying” the voyenpred system.

Golts really gets to it here:

“In reality producers of complex military equipment have a choice.  They can either make components in final assembly plants in a semi-artisan fashion.  Or they can buy them on the side, risking getting crap made in some tent.  It stands to reason the problem isn’t confined to recreating the military acceptance office in enterprises.  Complex chains of sub-contractors have to be established.  And, we note, even with money — this isn’t a banal task.  We’re really talking about new industrialization, the construction of new enterprises.  But just what kind?”

Golts recommends a policy of targeted and specialized re-industrialization.  Because of the expense, he says build specialized component factories to support production of critical systems where Russia is decades behind developed states — communications, reconnaissance, UAVs, precision weapons.  Russia will have to prioritize and Golts doesn’t see tanks, ships, and heavy ICBMs as priorities.  Those who pick the priorities have to withstand attacks from lobbyists for these weapons.

Golts believes Deputy Prime Minister and OPK tsar Dmitriy Rogozin knows the bind he’s in . . . and that’s why he says put off the beginning of serial production of many armaments until the next armaments program (2016-2025).

Golts concludes:

“Generally, the rearmament of the Russian Army is entering a new cycle.  Without any kind of results.”

A Swedish Defense Debate

Two Swedish observers recently engaged in an exchange of opinion pieces regarding the connection between a supposedly more muscular and threatening Russia on the one hand, and an allegedly feckless Swedish defense policy on the other.

Here we are, of course, more interested in their divergent views of Russian military power rather than in (as they are principally and rightly concerned) its affect on Sweden’s defense.

Stefan Hedlund

Stefan Hedlund

Uppsala University professor Stefan Hedlund wrote first.  His article appeared originally in Svenska Dagbladet.

Hedlund concludes the Swedish legislature is radically changing its long-held view of Russia as relatively benign to one of Moscow as a growing threat to Sweden’s national security.  Proponents of this view, he says, point most often to Russia’s militarization and its increasingly autocratic political system.

However, he says President Vladimir Putin himself basically admitted the government’s 20-trillion-ruble State Armaments Program is failing.  Failing because the OPK, on the whole, cannot produce weapons and equipment of requisite quality, in necessary quantities, according to specified deadlines.

He cites the Bulava and Yuriy Dolgorukiy.

Just one good example among many he could have picked.

Then Hedlund concludes:

“Perhaps it was simply naive to think that the Russian military industry could pick up where it left off two decades ago, after standing at a virtual standstill, and all of a sudden produce weapons system [sic] at high international standards.”

He turns to politics, and the fragmentation of the Russian political elite just beneath Putin.

He sees it this way:

“These political developments don’t add up to the picture of an every [sic] more strong-fisted leader [Putin] who hasn’t ruled out waging war on his neighbours.  It is much more probable that Russia will be paralyzed by infighting for a long time to come, and an ever degrading economic outlook will mean the government may have to retrace it steps on promises to keep up salary developments and shore up pensions.  There might simply not be money left for the military.”

Hedlund hits key elements of the problem with Russia’s alleged militarization:  the OPK’s inability to deliver arms and a clearly evident Finance Ministry rearguard action to rein in military procurement spending.

Finally, Hedlund concludes it’s essential to discuss Sweden’s defense policy problems “without muddling it up with incorrect perceptions about the development [sic] in Russia.”

Political science PhD candidate Annelie Gregor responded to Hedlund with this essay.  Ms. Gregor neglected to add that she is, apparently, an employee of the Swedish Armed Forces.

Annelie Gregor

Annelie Gregor

Gregor argues Hedlund claims Russia is not in the midst of a military build-up and is turning away from authoritarian rule.

This is not at all what Hedlund said. 

Hedlund maintains Russia’s militarization isn’t effective and Putin’s autocratic style masks concerns about domestic politics that are more important to him than building up the armed forces or attacking a non-contiguous Nordic country.

Gregor’s first point about the recent surprise readiness evaluation in the Far East simply has to be ignored.  Not because of her primarily, but because of how others have futzed it up. 

She says it “involved” 160,000 troops.  Others have said Russia “mobilized” or “deployed” this number.  The entire manpower contingent of the Far East Military District (probably some 160,000 men) certainly wasn’t “involved” in those exercises, and those troops certainly weren’t “mobilized” or “deployed.”  They already actively serve in the region where the exercise took place. 

It is true to say recent Russian exercises have featured some re-deployments and equipment movements from other districts, but they are limited to what Russia’s strategic mobility resources can manage.

Difficult as it is to believe, Gregor cites Russia’s performance in the five-day war with Georgia as evidence of a threat to Sweden.

The same Russian Armed Forces that were caught off guard, and initially acquitted themselves so poorly that a major military reform program started immediately afterwards to improve their readiness and capabilities.

As more evidence, Gregor recalls this spring when “two Tu-22M3 Backfire heavy bombers simulated a large scale aerial bombing on Sweden.”

Two Backfires with nuclear-armed cruise missiles would be more than enough to ruin Sweden’s day.  But one notes they are not “heavy bombers” nor do two constitute anything “large scale.”  The incident was, perhaps, more about flying time and asserting Moscow’s right to use international airspace.

Gregor then argues with Hedlund about whether revenues from oil, gas, and arms sales will be adequate to support Russia’s “militarization” in the future.

This part of Hedlund’s article was, unfortunately, not translated.

One contends, however, that if Hedlund said the Russian defense budget will decline as its oil earnings decline, he’s right.  In fact, one could go further and say the budget is irrelevant.  What does matter is what Moscow actually buys or gets for it.  

The Russians are getting more training (because they can buy more fuel), but they aren’t getting new weapons on the schedule they originally laid down.  

And corruption remains a huge tax on the budget, just check on the criminal cases against former Defense Minister Serdyukov’s former deputies. 

And it’s obvious to serious observers that arms sale profits don’t go to the big white building on the Arbat.  They go to Rosoboroneksport which is connected more to high-level political infighting than to the Defense Ministry.

Hedlund never said Russia is turning from authoritarian rule as Gregor alleges.  Hers is a classic “straw man” fallacy.

Hedlund responded to Gregor’s response.

He argues Moscow’s “increasingly bellicose [anti-Western and anti-NATO]rhetoric is for domestic consumption” and its “aggressive actions, such as simulated nuclear strikes on Warsaw, indicate weakness and a desperate clamoring for attention.”

Anti-U.S. and anti-NATO speech will probably always be popular in Russia.  Simulated nuclear strikes are warnings to Europeans of the consequences of cooperation with the U.S. in missile defense (or anything else for that matter).

Hedlund says he’s done anything but argue that Russia is turning from authoritarian rule.  He concludes:

“What I have argued is that there is a very large difference between present-day Russia and a truly militarized authoritarian regime that would constitute a true danger.”

Eloquently put.  Putin’s regime is a clumsy, capricious, and ineffective brand of authoritarianism.  It recalls the late years of the Tsars more than Hitler’s Germany or Stalin’s USSR.  Dangerous to a degree, but not an existential danger.

Perhaps there’ll be yet another installment in this debate.

World-Class Competitors

Defense News has posted its annual list of the world’s top 100 defense companies for 2012.

The same seven Russian firms appear on the list.  But against the backdrop of a declining international defense market, the performance of Russian companies last year is interesting.

They did fairly well, except for airplane makers.

Almaz-Antey’s reported defense revenue rebounded strongly in 2012 – by 62 percent — to make it 14 overall.  It moved up from 21 last year.

Helicopters of Russia’s revenue jumped 32 percent to put it at 24.  It was 44 last year.

Sukhoy’s revenue was down 8 percent.  But down less than others.  With the market declining,  it came in 43rd, up from 52nd last year.

United Engine-building’s revenue increased nearly 50 percent to make it number 49, up from 55.

Irkut’s revenue and position declined, more than 18 percent to make it 62 versus 53 a year ago.

RTI Sistemy reported a 12 percent gain to be 80th instead of 100th last year.

RSK MiG was down 17 percent and came in at 93rd.

Here are the posts on 2011 and 2010.

Iskander-M “Brigade Set” Delivery

Some significant news from late June and early July, largely (or entirely) overlooked by Western observers . . .

Designer Kashin Shows Shoygu the Iskander-M (photo: Mil.ru)

Designer Kashin Shows Shoygu the Iskander-M (photo: Mil.ru)

Defense Minister Sergey Shoygu presided over the first delivery of a “brigade set” of Iskander-M (SS-26 / Stone) short-range ballistic missile systems at Kapustin Yar on 28 June.

According to Mil.ru, uniformed and civilian Defense Ministry officials, industry representatives, and journalists were present for the test range ceremony.

The delivery followed the MOD’s announcement last month that Iskander-M system components will no longer be supplied separately to the army, only in “brigade sets.”  The military department also reported a “long-term” contract for deliveries of the missile system until 2017 was concluded with the producer.

A complete “brigade set” includes missiles, launchers, transport-loaders, command-staff, data processing, check-out, and maintenance vehicles, and training systems.

Missile Troops at Attention in Front of Iskander-M Launchers (photo: Mil.ru)

Missile Troops at Attention in Front of Iskander-M Launchers (photo: Mil.ru)

Shoygu reiterated that the MOD intends to reequip all ten Ground Forces missile brigades with Iskander-M before the end of 2017.  Ten brigades should deploy at least 120 missiles, not including reloads.  The Iskander-M is the only weapons system to be 100 percent procured before 2020, according to the MOD’s recently publicized Action Plan.

At Kapustin Yar, Iskander-M designer Valeriy Kashin of the Kolomna Machine-Building Design Bureau told reporters the military will receive another “brigade set” before year’s end, according to Nezavisimaya gazeta and Komsomolskaya pravda.

But completing the military’s order in less than five years could prove difficult for Russia’s defense industries.

NG reported Kashin said enterprises working on the Iskander-M have to “intensify” their activities several fold to meet the MOD deadline.  Seventeen specialized manufacturers are scheduled to upgrade and retool under a 40 billion ruble ($1.2 billion) investment effort.

However, actual reconstruction of production lines will not begin until 2014, according to online daily Vzglyad.

Shoygu told those in attendance at Kapustin Yar the most important step now is establishing the “essential infrastructure” for the deployment of new arms and equipment. He reemphasized this in a 1 July MOD videoconference by calling for special attention to synchronizing the delivery of weapons with the construction of bases and other support infrastructure where they will be deployed (and with the training of those who will operate them).

The defense minister stated that the MOD currently awaits completion of military construction projects worth 314 billion rubles ($9.7 billion). He said he wants the backlog eliminated before November.

An NVO correspondent present at Kapustin Yar reports that the just delivered Iskander-M brigade’s new facilities will be complete in September.

The newest Iskander-M brigade is likely intended for the Southern Military District, which presently only has one battalion of the new missiles. 

Shoygu is right to focus on arranging the appropriate infrastructure for Russia’s new armaments because it has traditionally neglected support and lifecycle investments in its military equipment.

What’s It Cost?

S-400

S-400

A reader recently asked:

What’s the cost of one division of the S-400 for Russia and for foreign customers?

Let’s call it a battalion (дивизион).  We’ll start with exports (for which there is actually data).  And we proceed from what was paid for the S-300.

Russia’s planned sale of the S-300PMU1 to Iran reportedly involved the transfer of five “battalion sets” for $800 million.  Some sources said as much as $1-1.2 billion.   

Let’s guess the “battalion set” has three firing batteries, with two launchers per, for a total of 30 TELs, 120+ missiles, and all associated radars, fire control systems, and vehicles.

If $800 million is accurate, the price for one battalion was $160 million.  The price for one S-400 system, four missiles on a TEL, was roughly $27 million.

This isn’t unlike what the Chinese paid for the S-300 in the 1990s and 2000s.  According to Sinodefence.com, they bought battalions for between $25 and $60 million at different times under different contracts.

That done, we make the leap from the S-300 price to the S-400 price.

A couple years ago, Vedomosti drew the scarcely precise conclusion that the price of the S-400 will double the S-300’s price (and the S-500 double the S-400’s). 

So perhaps a “battalion set” or a battalion of the S-400 will go for $320 million.  That would be one full-up launch vehicle for $40-50 million.

The only other shred of information is the widely-reported Financial Times story saying, if the Russians added the S-400 to a $2 billion arms deal with Saudi Arabia, the price of the sale would climb to $7 billion.  But lots of Russian reports say Moscow won’t be selling the S-400 abroad soon.  The military obviously hopes that’s true, so it can get first.

But not every customer is Iranian, not every one will have to pay a premium price, and not every customer is foreign.

Which brings the trickier question of what Russia’s Defense Ministry has to pay.  It’s simply impossible to guess.

Certainly a lot less than buyers abroad.  The military’s bought some S-400 systems so there is a going price.  OAO Concern PVO Almaz-Antey’s costs are a big question as is the level of profit the government is willing to tolerate.  

The government owns Almaz-Antey, so one part of government is selling to another.  It’s a prime example of angst over GOZ “price formation” in recent years.  There was a similar big-ticket dustup over submarine prices with Sevmash.  It’s something of a Mexican standoff.  The buyer doesn’t have other supplier alternatives.  And the seller may not be allowed to sell elsewhere. 

The Defense Ministry, the government don’t want to pay a lot and have the power to refuse and yet still receive goods.  The question is how many.  That’s ECON 101, friends.

If those buyers set their price below equilibrium, Almaz-Antey will provide a lower than desired quantity more slowly than the buyers want.   And Almaz might have other buyers as an option, an advantage Sevmash lacks.  So “price formation” for the S-400 is all about agreement on Almaz’s costs and an acceptable level of profit.  That agreement is apparently not smoothly worked out yet.