Special Steel

Yasen Rollout in June 2010

On Thursday, Argumenty nedeli published a short article citing a source claiming Russia’s specialty steel makers aren’t very interested in supplying metal for new submarines planned for the Navy.

Argumenty’s record is interesting.  Sometimes they go out on a limb and don’t quite get a story right; other times they nail it or catch the gist of what seems to be happening.  Can’t say which it is this time.  But the paper has a tradition of looking closely at different parts of defense industry.

The story maintains Sevmash is trying to scrape together the specialty steel needed for new boats, and is short of what it needs for Borey– and Yasen-class hulls.  The paper’s OPK source notes, of course, that those boats already launched were assembled from existing sections of older submarine classes.

The source concludes rather direly:

“If the issue of steel isn’t resolved, then you have to forget about further production of our missile-carrying submarines.”

He continues:

“. . . it’s unprofitable for suppliers to produce.  Their own cost is high, but the Defense Ministry is buying a miserly quantity and trying to drive down the price on the finished item and, accordingly, on the components.”

Argumenty ends its short piece by reminding readers about the conflict between the Defense Ministry and United Shipbuilding Corporation (OSK) on the one hand and Sevmash on the other over pricing and contracts which lasted most of 2011.

That year-long battle ended in mid-November when Prime Minister Putin supervised the signing of seven submarine contracts worth more than 280 billion rubles in Severodvinsk.  There aren’t precise details on what the deal covered except nuclear-powered submarines — the modernized proyekt 955 Borey and proyekt 885 Yasen (or 955A and Yasen-M).

If Argumenty’s story is accurate, it suggests future disputes over submarine production and profit margins for Sevmash’s sub-contractors and suppliers.  Perhaps Putin’s deal was only a temporary end to the government-industry conflict.

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One response to “Special Steel

  1. Pingback: Tighter in the Hall | Russian Defense Policy

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