Tag Archives: Defense Sector

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.”

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Putin and the Army (Part III)

Putin Tours Aircraft Plant in Komsomolsk-na-Amure

This could be called “Putin and the OPK.”  The last five pages — more than 40 percent — of the Prime Minister’s election manifesto are about Russia’s defense sector.  It’s turgid and hard to digest.  

Putin’s website has a translation of the entire article. 

The tone and language at the end of the article differ from the rest.  Since not much has been accomplished in the OPK, Putin speaks in prescriptions, exhortations, platitudes, and imperatives.  Everything is “should” and “must.”  The text is rambling and somewhat unfocused.

Putin gives many non-specific mentions of:

  • “forming S&T capabilities”
  • “developing critical technologies for producing competitive products”
  • “reequipping the RDT&E infrastructure”
  • “investing in training specialists” 
  • “placing the Gosoboronzakaz for three-five, even seven years”
  • “a single organ for controlling ‘defense’ contracts”
  • “fair and sufficient prices”
  • “promoting competition in state purchases”
  • “driving forces of innovation growth”
  • “exchanging S&T information among those who can use it”
  • “streamlining manufacturing processes”
  • “increasing the prestige of defense industry occupations”

Shibboleths without concrete, prioritized, and achievable objectives won’t help the OPK after the election.

Let’s look for more coherent buried messages. 

Putin says up front:

“. . . we also have to talk plainly about [the OPK’s] accumulated problems.  It’s a fact that domestic defense centers and enterprises have missed several modernization cycles in the last 30 years.”

“We must fully overcome this lag in the next decade.”

The once-and-future President takes pains to stress that Russia’s OPK and scientific base, not those of other countries, will rearm the country’s forces.  While military-technical cooperation with partners is fine, Putin says Russia can’t depend on foreign arms or abandon self-reliance.  To the contrary, it needs to increase and support its own military-technological and scientific independence.

He writes:

“I am convinced that no amount of ‘pin-point’ purchases of military and scientific equipment can replace the production of our own weapons; these purchases can only serve as a source of technology and knowledge.”

Still, he warns:

“To increase the country’s defense capability in reality, we need the most modern, best equipment in the world, and not ‘absorbed’ billions and trillions.  It’s unacceptable for the Army to become a market for pawning off obsolete types of armaments, technologies, and RDT&E paid for at government expense.”

So Putin steers a path between those who say Russia can only rely on domestic arms producers, and those who say Russia’s defense sector is too decrepit and corrupt to supply the Armed Forces, so the military has to shop abroad.  But he definitely leans more toward the former view.

The once-and-future President sets a high bar for the OPK, probably ridiculously high considering how neglected the defense sector has been for 20 years:

“The activities of defense industry enterprises should concentrate on the mass production of high-quality weapons with the highest performance characteristics to meet both current and projected defense challenges.  Moreover, it’s only the latest weapons and military equipment that will enable Russia to strengthen and expand its foothold in the world arms markets, where the winner is the one who can offer the most advanced designs.”

“Reacting to present threats and challenges alone means being doomed to the role of someone who is always playing catch-up.  We must do our best to gain a technological and organizational edge over any potential adversary.  Such a stringent requirement should become the key criterion for us as we set targets for the defense industry.”

“The defense industry is in no position to calmly try to catch up with the latest developments.  We must facilitate breakthroughs and become leading innovators and manufacturers.”

So again, however realistic this goal may or may not be, Putin places a priority on Russia’s ability to export weapons and earn dollars.

He is sure rebuilding defense industry won’t be a back-breaking, Soviet-type burden on the country.  Still, he cautions:

“We must not repeat our past mistakes here.  The huge resources invested in the renewal of the defense industry and in the rearmament program must facilitate the modernization of the entire Russian economy.”

Another high bar.  A civilian economy of free, competitive, and self-sustaining industries can take good advantage of defense sector technology spin-offs.  It’s less clear how defense industry investments can help lagging sectors of Russia’s civilian economy.

Putin ominously warns corruption in the national security sphere is tantamount to state treason.  It’ll be interesting to see how the OPK reacts, and if or how he effects this declaration.

Despite years of state-controlled integration, the PM somewhat oddly says defense industry should be open to larger numbers of private enterprises and contractors.

And he opines that OPK pay should be equivalent to new higher pay in the Armed Forces.  This is probably true but it’s another costly promise.

He concludes the entire article saying Russia cannot fall behind and become vulnerable even if it costs a lot.  But the goal, he claims, is an army and defense industry that strengthens rather than exhausts the national economy.

Putin is many days late and many rubles short in fixing the OPK’s problems.  They should have been addressed before the current state armaments program (GPV) was launched.  The GPV cart was placed before the OPK horse for political reasons.

It’ll be interesting to see if this article serves as any kind of blueprint for the years that Putin serves, once again, as Russia’s chief executive.

It’s also interesting to see Putin return to the weakness theme.  And how avoiding real or perceived weakness is such a powerful motivation for him:

“. . . we should not tempt anyone by allowing ourselves to be weak.”

To reiterate, Putin says what needs defending are Russia’s natural resources.

One’s reminded of his address the day after Beslan more than seven years ago.  He said:

“We showed weakness.”

“And the weak get beaten.”

“Some want to rip ‘juicy’ pieces off us, others to help them.”

It’s basically what Stalin concluded about industrialization 81 years ago almost to the day:

“To slacken the tempo would mean falling behind.  And those who fall behind get beaten.”

“One feature of the history of old Russia was the continual beatings she suffered because of her backwardness.” 

“They beat her because it was profitable and could be done with impunity.”

“They beat her, saying:  ‘You are abundant,’ so one can enrich oneself at your expense.”

What Putin says is not so different.