Tag Archives: Armata

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.

Uralvagonzavod

Uralvagonzavod

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.

Impatient Putin

Once flagship of a robust Russian military press, NVO isn’t what it was.  What is after 15 years of Putin?  But NVO still has moments.  Its 22 May editorial is one.

Putin at 15 May Meeting

Putin at 15 May Meeting

NVO writes that recent Roskosmos failures overshadowed President Vladimir Putin’s mid-May meetings with Defense Ministry and defense industry leaders on the GOZ and GPV.  Still the 9 May Victory Day parade on Red Square showed much has been done to rearm Russia.  But much doesn’t mean every problem has been solved.  Rather, NVO contends, problems in the realization of GPV 2011-2020 and GPV 2016-2025 are “snowballing.”

The paper offers cases in point:

  • The fifth generation T-50 (PAK FA) fighter didn’t fly over Red Square even though it’s supposed to be in serial production already. The impatient Putin gave Russian designers just five years to field the T-50 while the Americans took 14 years from first flight to first delivery with the F-22 and 12 with the F-35.
  • Only a short time — two years — has been allowed for serial production of the new Armata tank.  The Soviet T-64 took 10-15 years from the start of testing until all development work was finished.  The call for Armata tanks and other armored vehicles on the same base in 2015 is just a “wish.”  Serial production won’t begin earlier than 2018.
  • There are delays in other key military programs — S-350 Vityaz, S-500 Triumfator-M, and missile defense systems (no specifics provided).

Then NVO reels off a list of weapons the Russian military needs that, the editorial asserts, aren’t exactly rolling off assembly lines:

  • Transport aircraft;
  • UAVs;
  • Air-launched missiles;
  • Air ordnance;
  • Artillery and fire control systems;
  • Space systems.

Regarding the final bullet, the paper notes that “even a huge investment of budget resources still won’t save Roskosmos from its systemic crisis.”

NVO concludes:

“On the whole, fulfillment of GPV-2020 and GPV-2025 has been summoned to restore Russia to military parity with NATO, if only the Russian economy can withstand the strain.  If not, the history of the USSR may be repeated.”

Some will quibble about particular systems NVO claims Moscow will have trouble fielding, but the general point remains:  far from everything needed by a military neglected for 20 years is being successfully procured.  There are more than a few independent Russian economists who say Moscow’s current high level of defense spending is damaging an economy already challenged by lower oil prices and Western sanctions.

GPV 2016-2025

Dmitriy Rogozin

Dmitriy Rogozin

Last week Rossiyskaya gazeta’s Sergey Ptichkin reviewed Dmitriy Rogozin’s comments on the formation of the next state armaments program, GPV 2016-2025.  Rogozin is Deputy Prime Minister and Chairman of the Military-Industrial Commission (VPK) attached to the RF Government.

Rogozin indicated the next GPV will be very different from the current one, according to Ptichkin.

Rogozin said fulfillment of GPV 2016-2025 will be tracked with a new automated system GAS-GOZ, or the State Automated System of the State Defense Order (or perhaps State Automated Defense Order System?).  It’s supposed to allow for “quickly reacting to the smallest failures” in the GOZ.

The Future Research Fund (FPI or ФПИ, the emerging Russian DARPA) will effectively develop the most promising military and civilian technologies in 2016-2025.

Systems now in RDT&E are supposed to be in serial production.  There may be some weapons based on “new physical principles.”

The PAK DA, a new strategic bomber, should be developed and produced during this GPV.  The fifth generation fighter, PAK FA, will be in production.

There will be new missiles, from operational-tactical to strategic, hypersonic ones too.

It’s “not excluded” that aviation-carrying formations (aircraft carriers) will appear in the Navy.

Rogozin said the “active inclusion of the Military-Industrial Commission in developing the future GPV” is a first, and will allow for avoiding “many problems and collisions” along the way.

Rogozin criticized the “former Defense Ministry leadership” for refusing to accept the BTR-90, not ordering the BMD-4, not taking delivery of assembled BMP-3s, and not testing Obyekt 195 (a future tank) after GPV 2011-2020 was already finalized.  Instead, rushed orders for developing and producing the wheeled Bumerang, light tracked Kurganets-25, and heavy tracked Armata ensued. 

These armored vehicles are supposed to enter the force in a year or two, but this seems unlikely.  They will probably become part of GPV 2016-2025.

Rogozin promised the next GPV will be the most balanced, most well-calculated, most innovative, and, at the same time, most realistic.

It’s very early to talk about the next GPV.  Traditionally, this is a sign things aren’t going well in the GOZ or the current GPV.  The overlap in consecutive GPVs makes it difficult (perhaps impossible) for anyone — citizens, lawmakers, bureaucrats, military men, and, defense industrialists — to understand exactly what’s been procured (or not) under each GPV.  This state of confusion probably serves the interests of some of the same  groups.  Rogozin makes it sound as if defense industry, rather than the military, will drive the train this time around.

Defense News

Some Russian defense news from Friday, April 13, 2012 . . .

An Interfaks-AVN headline:

  • Rogozin says new Armata tank will reach troops in 2017.

RIA Novosti reports Rogozin saying UVZ will start producing Armata in 2015.

ITAR-TASS reports burned Delta IV-class SSBN Yekaterinburg will arrive at Zvezdochka to begin repairs this summer.

An OPK source tells the news service the sub will return to the fleet in summer-fall 2014.  Fire destroyed its sonar system and seriously damaged the rubber coating of its outer hull.  Yekaterinburg was under minor repair following a collision with a tug when it caught fire in the dry dock at Roslyakovo in January.  The SSBN had been scheduled for a patrol before it collided with its escort.

ITAR-TASS reported Rogozin remarking that the GOZ may not be fully in place by tomorrow’s deadline.

Today’s Kommersant says the problem (once again) is agreement (or lack thereof) on the price for new Borey-class SSBNs.