Russians in the Top 100

Defense News has released its list of the world’s Top 100 defense companies for 2015.  By its methodology, it put seven Russian firms on the list for 2015.  They include:

Almaz-Antey held its 11th position from 2014 with nearly $7 billion in defense revenue.  But that amount represented a 25 percent decline against 2014.

Four firms dropped in the rankings with earnings down between 20 and 34 percent: Helicopters of Russia, OAK, RTI, and Uralvagonzavod.  The tank maker’s military revenue fell more than 34%.

Tactical missile maker KTRV held pretty steady.

KRET broke into the rankings in 48th place with nearly $1.7 billion in earnings. With Moscow’s emphasis on EW during the past year, it wasn’t hard to guess KRET would get paid.

Interesting that government aircraft manufacturing holding company OAK stays on the list, but Sukhoy and Irkut have fallen out.  Generally though, Russian aircraft producers still fare pretty well.

Early warning radar maker RTI manages to stay on the list each year.

Has anyone seen OSK — the government shipbuilding holding company?

Engine-building holding company ODK fell out of the list likely because of its inability to get components and parts from Ukraine (or make its own successfully yet).

Weak Light at the End of the Tunnel

In recognition of Navy Day several weeks back, Mikhail Khodarenok examined the current state of the Russian Navy for

Khodarenok offers a pessimistic assessment of the navy’s shipbuilding program.  He notes there is still significant disagreement over what to build.  The navy, he argues, has also lost some of its bureaucratic heft when it comes to planning for shipbuilding as well as for the operational employment of naval forces. 

Black Sea Fleet Nanuchka III-class PGG Shtil in the Navy Day Parade

Black Sea Fleet Nanuchka III-class PGG Shtil in the Navy Day Parade

Late of Voyenno-promyshlennyy kuryer, Mr. Khodarenok — you’ll recall — is an ex-General Staff officer and serious military journalist.  He shares interesting and credible opinions from several well-placed former naval officers in his article.

According to him, all observers agree that the start of serial construction of ships after more than 20 years is “one of the most important vectors of the fleet’s current development.”  This might seem obvious, but it’s not widely appreciated.

Khodarenok walks quickly through the current construction program:

  • four proyekt 20380 corvettes in the fleet with eight on the buildingways;
  • three proyekt 11356 frigates delivered, others uncertain;
  • proyekt 22350 frigates under construction;
  • six proyekt 636.3 diesel-electric submarines complete, six more for the Pacific Fleet to be built in 2017-2020;
  • proyekt 955 Borey-class SSBN is a success with three delivered;
  • a single proyekt 885 Yasen-class SSN has reached the fleet, others will likely not arrive until after 2020.

One can quibble with his points.  For example, it’s premature to declare Borey a success when its Bulava SLBM still hasn’t been accepted into the navy’s inventory (NVO made this point flatly on 12 August).  Perhaps Borey is a success, but only in comparison to Yasen.

Khodarenok doesn’t dwell on these points, and his general themes are of greater interest.

He quotes former deputy chief of the Navy Main Staff, Vice-Admiral Vladimir Pepelyayev:

“Serial production is generally a very big deal.  It has big pluses in the deployment plan, lowering costs of subsequent ships in the series compared with the lead unit, and simplification of training personnel for new ships.”

According to Khodarenok, Pepelyayev feels there is light at the end of the tunnel for the navy, but it’s dim and flickering because navy ship construction “fully reflects the realities and condition of the Russian shipbuilding industry,” and not just shipbuilding.

Pepelyayev continues:

“A ship is a visible and material reflection of practically all the technological capabilities of the state.  In a word, we build that which we can build.”

Khodarenok adds:

“Specialists believe that another fifteen years are still needed to recover after many types of restructuring, the 1990s, and the hiatus in fleet construction at the beginning of the 2000s.”

Turning to the sore point of gas turbine engines, Khodarenok writes that Rybinsk may well be able to make them for the Russian Navy by 2017-2018, but someone still needs to replace the reduction gears also once made for navy ships in Ukraine.  This is a more difficult task.  The Zvezda plant in St. Petersburg has gotten the job.

Ex-deputy CINC of the Navy for Armaments Vice-Admiral Nikolay Borisov says:

“This is a highly complex task — highly complex and modern equipment, particularly gear cutters, are needed to work with high-alloy steel.  Whether this task will be completed at Zvezda is an open question.  Many specialists doubt the enterprise’s capability to handle the task in the established timeframe.”

Khodarenok turns to the proposed nuclear-powered destroyer Lider (proyekt 23560), concluding there isn’t agreement among specialists whether the fleet even needs this ship.  An unnamed highly-placed source tells him the fleet needs 20 frigates more than 15 frigates and five Lider destroyers.  The source continues:

“Lider will be a ship of the second half of the 21st century.  However, there are no new weapons which correspond to the second half of the 21st century for it.  There’s just no sense in building a hull and power plant.”

Retired Rear-Admiral Yuriy Gorev, who was involved in ship acquisition, tells Khodarenok that the navy should continue building corvettes and frigates while continuing development of Lider.  But the new destroyer shouldn’t be a goal of the fleet’s near-term plans.

Next, the always-pregnant question of aircraft carriers…

An unnamed Navy Main Staff source says:

“Today there are no conditions for the construction of a ship of such a design.  No buildingway, no drydock.  There is simply nowhere to build an aircraft carrier.”

“The construction of such ships should be realized for concrete tasks, but today the Russian Navy simply doesn’t have such missions.”

“And with further development of aviation, aircraft carriers could even die out altogether as a class.”

Recall that MOD armaments tsar Yuriy Borisov said an aircraft carrier contract won’t be signed until late 2025, and there are three existing “not bad” designs for it.

Former chief of the naval “direction” (department, i.e. not a major bureaucratic entity) of the General Staff’s Main Operations Directorate (GOU), Rear-Admiral Arkadiy Syroyezhko believes there are no insurmountable obstacles to the construction of a nuclear-powered strike carrier in Russia.  He thinks Sevmash could handle the job since it was originally conceived as a yard for major surface combatants and later concentrated on submarines.

But Syroyezhko admits, without preparation to support carriers, Russia could end up with extremely expensive, sporadically constructed carriers.  Today, he concludes, Russia is able to fulfill combat missions typically placed on carriers by other means.

Changing gears, Khodarenok covers the state of play in the Russian Navy’s Main Staff.

According to him, specialists unanimously report that the operational-strategic component has disappeared from the Main Staff’s work.  It no longer plans for the fleet’s employment — for strategic operations in oceanic theaters of military operations.  The naval planning job has gone to Russia’s operational-strategic commands (military districts) and the four geographic fleets (as the operational-strategic large formations of those MDs).  

A Main Staff source tells Khodarenok that the MD commanders have come up with disparate rules for directing the fleets subordinate to them.  The source says the disappearance of a naval component in GOU planning began with the downgrading of the GOU’s naval directorate to a “direction,” and with the concomitant reduction in the quality of its naval staff officers.

Khodarenok writes there is confusion today over what ships to build, how many, what tactical-technical capabilities they should have, and what missions they should perform. The Navy CINC has “no rights” but many demands made of him in this regard.

Russian Navy CINC Admiral Vladimir Korolev

Russian Navy CINC Admiral Vladimir Korolev

The Navy CINC’s responsibilities for procurement intersect with those of the MOD’s state defense order (GOZ) support department.  It’s unclear exactly where their respective authorities begin and end.  The Main Staff source says all sorts of nonsense result from the confusion.

Still, the CINC has to answer for almost everything that happens in the fleet, according to Khodarenok.

The Navy Main Command’s (Glavkomat’s) move to St. Petersburg was a big mistake, but a return to Moscow would be equally disruptive.  A Glavkomat source tells Khodarenok, as long as the leadership sends people to Vladivostok or elsewhere twice a week over the littlest issues, it really doesn’t matter where the headquarters is.

Khodarenok sums everything this way:

“In other words, there are more than a few problems in the fleet today.  It undoubtedly won’t do to put their resolution on the back burner.  They won’t disappear somewhere from there.”

JO Shortage

Russia’s Eastern Military District (MD) is apparently experiencing a junior officer shortage.

The district headquarters in Khabarovsk announced this week that 227 of its contractees are set to receive lieutenant’s shoulderboards in the near future.

Eastern MD Contractees in Basic Training

Eastern MD Contractees in Basic Training

The Russian MOD site indicated that these contractees already have a higher education, and 39 have a military specialization.  Apparently, they will start serving immediately as junior officers.  The other 188 have been enrolled in military training establishments (VUZy) for an unspecified period.

Another 85 will soon be sent off for similar training.  The MD is already selecting well-prepared contract servicemen who have a higher education.

The district also intends to send representatives from its personnel directorate and military commissariats to western and central Russia to recruit individuals to serve as officers in the Eastern MD.

The MOD site reminded readers that, in May, MD commander General-Colonel Sergey Surovikin said the district needed to find officers “who were forced to resign during the optimization of the structure and size of the Russian Army” as well as contract servicemen with higher education who want to be officers.

The “optimization” of course was that of former defense minister Anatoliy Serdyukov.  His effort to cut bloat in the officer ranks began in earnest in 2009. While focused mainly on senior officers, Serdyukov’s knife also slashed lieutenants and captains at the base of the TO&E pyramid.  At the time, commentators reported complaints from units saying they had trouble keeping order and fulfilling routine requirements due to a lack of platoon and company commanders.

In some sense, the news about a JO shortage is surprising given that each spring the MOD gushes about young lieutenants graduating from VUZy and taking up their responsibilities in the nation’s far-flung armed forces.  It also brags about stiff competition to enter those VUZy every year. 

In another, it isn’t surprising.  Serving in the military in Russia’s harsh and underpopulated Far East is no more popular than living there for other reasons.  It’s a hardship post with little attraction for 22-year-old.

Lastly, each contractee taken to become an officer means another enlisted soldier has to be signed up for the Eastern MD.  And that’s a more difficult sell.  One is left wondering if the recruitment of contract servicemen for the Far East isn’t going so well either.

Sufficient numbers of young Russian men are just getting harder to find.  It’s hard to get them to go where the military thinks they’re needed.  Meanwhile, Moscow is trying to expand its force structure. And the very bottom of Russia’s demographic hole won’t be reached until 2018. 

Tough Times at UVZ

Maybe Russia’s economy is muddling through its downturn.  But for some major enterprises, the situation seems somewhat worse.  Tank and railcar maker Uralvagonzavod (UVZ) is a case in point.



In early August, RBK reported that Gazprombank is prepared to refinance UVZ’s 200-billion-ruble ($3 billion) debt.  The Russian government may kick in nearly 15 billion rubles ($230 million) of loan guarantees.

The 100-percent state-owned UVZ would use state guarantees to refinance part (most, all?) of 21 billion rubles ($325 million) in bank credits due this year.  Alfa-Bank, Sberbank, Gazprombank, and Svyaz-Bank are its primary creditors.

In June, Alfa-Bank went to court to have the tank producer declared bankrupt over 9 billion ($140 million) of a 16-billion-ruble debt.  The case was to be heard on 8 August, but UVZ needed to stop the bankruptcy case – by reaching agreement with Alfa-Bank – to receive the state loan guarantees.  With the guarantees, Gazprombank decided to refinance UVZ’s debts on 9 June.

Now Alfa-Bank denies it ever filed a bankruptcy suit against UVZ.  But a Minpromtorg official told RBK that the bank and tank maker reached “certain agreements,” and the former will soon lift its case against the latter.

According to RBK, UVZ reported record losses in 2015, mainly due to reduced sales of railcars and higher interest rates.  The corporation indicated that 58 percent of earnings came from military sales and 15 percent from civilian sales, with the balance from freight handling operations.

UVZ Deputy General Director Aleksey Zharich said the state cut the advance payment for its GOZ deliveries, forcing the company to turn to the banks.  It also needed to import equipment which doubled in price thanks to the weak ruble.

Overall, the Minpromtorg official said, “Indicators like these [for UVZ] haven’t been seen since the 1990s, the economic crisis has brought a fall in the volume of rail transport.”  But UVZ is hopeful for improved results in 2016.

The New York Times covered UVZ’s situation in February when it reported that the plant’s railcar workers had their wages cut by one-third while its military side was still “humming” on full pay.  One employee said then that workers on the civilian side had been showing up, getting paid, but actually doing little work for a year.  In June, RBK reported that UVZ furloughed 3,000 workers from railcar production.

What does UVZ’s situation mean for Russian defense?

In the short run, it means the T-14 Armata tank is likely to come out of UVZ slowly.  UVZ sent 20 tanks to the army for “troop testing” in the spring.  General Director Oleg Siyenko said in June that UVZ will deliver 100 tanks to the MOD in 2017 and 2018.  That’s a far cry from the 2,300 Armata tanks expected under GPV 2011-2020.

T-14 Armata

T-14 Armata

Meanwhile, Siyenko has been asking the Russian government for much larger loan guarantees – 60 billion rubles ($940 million) – to repay bank credits coming due in 2017 and 2018, according to RBK.  Some portion of this may be needed to retool the lines for serial Armata production.

It’s entirely possible UVZ might require a full-scale Kremlin-ordered bailout to be in position to produce Armata tanks by the hundreds.


On August 1, Defense Minister Sergey Shoygu conducted a teleconference during which he addressed the serviceability (исправность) of Russia’s weapons and military equipment.

Defense Minister Shoygu

Defense Minister Shoygu

Serviceability is pretty synonymous with “in service,” “good condition,” “operability,” or “equipment operational readiness.”

Shoygu reported that the Russian military has achieved the following serviceability rates:

  • 63 percent for Aerospace Forces (VKS) aircraft;
  • 96 percent for air and missile defense systems;
  • 98 percent for space systems;
  • 76 percent for the Navy;
  • 94 percent for armored units;
  • 93 percent for artillery units.

Shoygu claimed that the military has devoted attention to obtaining higher quality weapons systems and to supporting their serviceability in the future.  He attributed high equipment availability to the shift to “full life cycle” maintenance contracts.  He said the MOD has worked with producers and developers to find problems that occur during use and work out measures to prevent them in the future.

In 2014, Shoygu reported that the overall serviceability of Russian arms and equipment improved from 80 to 85 percent.

In late 2013, Kommersant reported that the serviceability rate of aircraft in the air forces (VVS) was below 50 percent.  “Permanent readiness” requires 80 percent operational availability.

The MOD Action Plan (2013) specifies that equipment in-service rates for the ground troops and navy should be 85 percent and 80 percent for aircraft by 2020.

The U.S. military goal is 90 percent for all equipment except aircraft, which is 75 percent. But actual serviceability varies widely depending on a unit’s training and operational tempo.  Recovery time might actually be more critical.

The Canadian Army recently assessed its major vehicle and equipment fleet serviceability at 60 percent, which apparently didn’t make it too happy.

What do we make of Shoygu’s claims about the Russian military’s serviceability rates?

The Russians have put more effort against equipment modernization, overhauls, and repairs since Shoygu came to the MOD.  Therefore, increasing rates of serviceability aren’t surprising.

At the same time, the serviceability rate can be manipulated easily.

In most militaries, serviceability is determined and reported up the chain by military units themselves.  In the U.S., equipment readiness/serviceability is an element of the Unit Status Report (USR). It’s possible for commanders to fudge it.  The question is are they inclined to do this?

In Russia — where fulfilling the plan and meeting norms is highly valued, it seems likely.  Add to this the recent command housecleaning in the Baltic Fleet.  The MOD did a clean sweep on its headquarters for, among other things, padding numbers on training, readiness, etc.  So perhaps Shoygu double-checks his subordinates’ claims.

This is the country that created the Potemkin village.  For centuries, Russian provincials have been trying to fool any inspector-general (or party bureaucrat) sent from St. Petersburg (or Moscow).

At the same time, fudging can also be initiated at the top.  Mentioned on these pages more than once is the old trick of slashing the denominator to raise your percentage.  If 7,000 of 10,000 tanks are running, write 2,000 off and suddenly 88 percent of the army’s assets are serviceable, right?

In the end, we may have suspicions about Shoygu’s serviceability claims, but we don’t have any independent insight.  It’s true, though, that any military establishment that fools itself (at whatever level) about its “equipment operational readiness” runs an awful risk the next time bullets are fired in anger.

Russia Day Promotion List

President Vladimir Putin signed out the latest MOD promotion list on June 11, 2016 — the eve of Russia Day.  Find the original on Krasnaya zvezda.  Or check out the running list in English here.

This list had six two-star and 29 one-star promotees.

Promotions came to commanders of three army-level formations, five divisions, and three brigades.


  • 29th Combined Arms Army;
  • 68th Army Corps;
  • 39th Missile Division (RVSN);
  • 35th Motorized Rifle Brigade;
  • 106th Air-Assault Division (VDV);
  • 7th Tank Brigade;
  • 2nd Air Defense Division;
  • 11th Air-Assault Brigade (VDV);
  • 1st Air Defense Division;
  • 102nd Military Base (Armenia);
  • 2nd Combined Arms Army;
  • 51st Air Defense Division.

It looks like, just possibly, a nephew of General Staff Chief, Army General Valeriy Vasilyevich Gerasimov — one Vitaliy Petrovich Gerasimov — made general-major in command of the Aleysk-based 35th MRB in the Central MD.

But it might be a coincidence of surname.  It’s common.

The younger Gerasimov was born on July 9, 1977 — making him a general officer at the tender age of 38 years and 11 months.  He’s a native of Kazan and graduated from the higher tank command school in that fascinating ancient city on the Volga.

Vitaliy Gerasimov

Vitaliy Gerasimov as a colonel

Valeriy Gerasimov

Army General Valeriy Gerasimov

It’s possible to see (perhaps imagine) a family resemblance.

The elder Gerasimov was also born in Kazan, in 1955, and also commissioned out of the tank command school, in 1977.  The question is does Valeriy have a brother named Petr Vasilyevich Gerasimov?

Look for the next promotions in December.

Million-Man Army

President Putin (photo RIA Novosti Sergey Guneyev)

President Putin (photo: RIA Novosti / Sergey Guneyev)

For some time, observers have talked about the Russian military as a force of roughly 1,000,000 soldiers.  But its legal ceiling was above one million, while its true personnel number was below that level. Now Moscow has, for the first time, a statutory limit of 1,000,000 uniformed personnel.

This week President Vladimir Putin decreed a manpower limit of 1,885,371 for Russia’s Ministry of Defense.  One million will be uniformed service personnel and the balance civilian employees.

RIA Novosti reported on the decree.  It replaces one from January 2008 specifying 2,019,269 with 1,134,800 in uniform.

In a largely overlooked December 2008 act, former president Dmitriy Medvedev decreed that the limit would be 1,884,829, including one million serving in uniform, from the beginning of 2016.

So Putin has authorized an additional 542 civilian workers for the Defense Ministry.

To round out this picture, Putin decreed a limit of 2,020,500 with 1,134,800 servicemen in 2005.

Putin’s latest decree is the new benchmark.  But who is that million?

There are about 300,000 draftees in the armed forces at present.  In late 2015, the military reported having 352,000 contractees.  It announced it would take only 31,000 volunteer soldiers in 2016, and claimed its formations and units were manned at 92 percent of authorized manpower.

If you take 300,000 + 352,000 and add in 220,000 officers and 50,000 warrants, it looks like armed forces of 922,000 or 92.2 percent of the current one million authorized.  Another 31,000 contractees this year would be 95 percent.

In late 2014, the Defense Ministry said 220,000 officers, 50,000 warrants, 425,000 contractees, and 300,000 conscripts was its goal by the end of 2017. That’s 99.5 percent of one million.  Some 42,000 contractees will have to be signed up in 2017.

Perhaps, just maybe, the days of undermanning at 766,055 servicemen on January 1, 2013 are behind the MOD.  However, there are problems with believing it.  Number one is the fact that no one talks about the rate of contractees leaving the armed services.  Retention may be as good, but it’s not 100 percent.  The addition of new volunteers isn’t a straight line up to 425,000.

Beyond whether contractees stay are more important (and more difficult to evaluate) issues of the quality of recruits, what they learn in training, and what they add to Russia’s combat capability.

P.S.  Also notable this week was Putin’s signing of a decree on MVD manning which increases its personnel by 64,000 to 1,067,876 (872,970 police officers).  This, and the MOD decree, are part of an apparent rewickering of the “power” ministries that began with the establishment of Putin’s National Guard.