Tag Archives: IVECO

Serdyukov Year-Ender (Part I)

Serdyukov Watches Troops with President Medvedev

Defense Minister Anatoliy Serdyukov gave a two-part interview to Rossiyskaya gazeta this week.  It covers some contentious issues, but the questions aren’t exactly hard-hitters, and there’s no follow-up on his answers.  Nevertheless, Serdyukov as always puts out a steady and consistent message on what he, the government, and military are trying to accomplish.  Much of the first part of his interview concerned this year’s GOZ problems and the Defense Ministry’s difficulties coming to terms with defense sector enterprises.

Serdyukov says he’s been occupied for two years with reaching agreement on prices, deadlines, and quality for arms and other military equipment.  But, he says, now producers have no reason to complain because they’re receiving 80-100 percent advance payments for their work.  Some contracts for ships, aircraft, and strategic missiles are long-term ones extending to 2017-2020.  He adds:

“The fact is we are completely forecasting the entire future activity of a company for many years to come.  This allows for planning for expenses and receipts, training personnel, introducing new technologies, reequipping the production base.”

Regarding the tussle over OPK prices, Serdyukov says he’s told enterprises to give the Defense Ministry their production cost [себестоимость], and the military department will make production profitable for them.  Producers can have a profit margin of 20-25 or even 30-35 percent, but, he says, component suppliers will be limited to a one-percent mark-up.

Many producers (Sevmash for one) blame their suppliers for their own high costs, but it seems likely that limiting sub-contractors to a 1 percent profit is a formula for failure.

But Serdyukov has one condition for profits of 30-35 percent over the cost of production:

“The difference [10 percent?] has to go toward the technical reequipping of the enterprise, the purchase of new technologies and licenses.  And this will lead to lower costs or improved technical characteristics and combat potential of this or that weapon in the future.”

Later Serdyukov noted the Defense Ministry will compensate producers for annual inflation but production cost and timeframe will remain fixed. 

Then questions turned to the issue of foreign weapons.  Serdyukov said the Defense Ministry can’t buy Russian arms that aren’t up to world standards in price and quality.  Russia, he said, is interested in foreign systems so it can understand where it lags or has already fallen behind.  He described cooperative ties with foreign producers, buying licenses, and organizing joint production of entire systems or components in Russia as a way to get domestic industry up to date.  Serdyukov said foreign characteristics and prices are always part of the discussion of price formation with OPK enterprises.

Serdyukov told RG he doesn’t believe the Russian defense sector’s potential has dissipated despite the economic and financial difficulties of the last 15 years.  But now, with a 10-year GPV in hand, Russia has to restore the volume of defense production to the level of the 1980s.

He said foreign purchases were mainly small numbers of samples for the Defense Ministry to investigate.  It bought Iveco armored vehicles for explosive testing, after which Russia proposed to produce them jointly with Italy in Voronezh.

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Postnikov on the Army and OPK (Part I)

Ground Troops CINC, General-Colonel Aleksandr Postnikov really stirred up the hornet’s nest on Tuesday.  Russia’s defense sector – its OPK or oboronki – feeling offended recently, is abuzz about his comments.  Postnikov told a session of the Federation Council’s Defense and Security Committee:

“Those models of weapons that industry produces, including armor, artillery and infantry weapons, don’t correspond to NATO’s or even China’s models in their characteristics.”

The military hadn’t criticized the domestic OPK’s heavy armor and artillery systems to this point.

Insulting Russian tanks is the particular point here.  According to Newsru.com, Postnikov apparently called the much-praised, newest T-90 in actuality just the 17th modification of the Soviet T-72.  And, at the current cost of 118 million rubles per tank, he suggested:

“It would be simpler for us to buy three ‘Leopards’ [German tanks] for this money.”

Newsru.com counters that Rosoboroneksport is proud of the T-90, its sales, and continued interest abroad, but admits it is weak against third generation ATGMs, modern sub-munitions, and “top attack” weapons.  The news outlet also notes that the Russian Defense Ministry has eschewed procurement of the T-95 and BMPT.

In its editorial entitled “Import Generals,” Vedomosti takes Postnikov to task, saying it’s not sure whether he means new or used Leopards, but the German tanks probably come in at $7.5 million a piece at least, against the T-90 at $4 million [i.e. only part of one Leopard for 118 million rubles].  And, says Vedomosti, comparing Russian tanks to Chinese ones is lamer still on Postnikov’s part.

According to the business daily, these criticisms of Russian armaments usually come with calls to buy the same systems abroad.  But the 2008 war with Georgia showed Russia’s deficiencies lay in soldier systems, comms, recce, C2, and some types of infantry weapons rather than in armor.  When Russia doesn’t make something like Mistral or it has inferior technology like UAVs, it’s understandable to buy foreign, but when it’s something like armor, it raises a lot of issues, according to Vedomosti.  Uralvagonzavod certainly needs tank orders.  The idea of large-scale foreign purchases is utopian, says Mikhail Barabanov.  The paper believes thoughts of buying Leopard tanks and Mistral mean Russia’s generalitet has plans beyond local wars.

BFM.ru says Postnikov put the Ground Troops’ modern arms and equipment at only 12 percent of its inventory at present with, again, the goal of 70 percent in 2020.  At the end of this year, the army will get its first brigade complement of the newest automated C2 (ASU) system [i.e. presumably YeSU TZ]:

“In November of this year, we plan to conduct research on the newest  ASU and hand down our verdict.”

According to BFM.ru, he said NATO and China already have analogous systems:

“But for us it is still the future.”

Nezavisimaya gazeta focused on Postnikov’s comments on Ground Troops brigades.  He said he now has 70, but plans for 109 by 2020, including “future type” brigades:

“There will be 42 brigades of the future type, in all there will be 47 military formations of the future type, including military bases abroad which will be built on the same principle.”

The Glavkom didn’t say how the new brigades will be different from the old.

Parsing what he’s talking about is a little tough.  At the end of 2008, the army talked about having 39 combined arms, 21 missile and artillery, 12 signal, 7 air defense, and 2 EW brigades for a total of 81, rather than Postnikov’s current 70.  One might guess a dozen arms storage bases in Siberia and the Far East could be fleshed out into maneuver brigades.  But where does the manpower come from?  Maybe some of the 70,000 officers cut and now being returned to the ranks by Defense Minister Serdyukov. 

Postnikov elaborated some on heavy, medium, and light brigades.  Heavy will have tanks and tracked armor.  NG concludes there won’t be a new tank.  Tanks in storage will get new electronics and Arena active defense systems.  According to Postnikov, medium brigades will get [among other things?] the Bumerang amphibious BTR now in development.  This, says NG, is the first time anyone’s heard Bumerang.  But if it isn’t successfully developed or produced in sufficient numbers by 2020, the army will just buy armored vehicles abroad since there’s already ample precedent for this.

Light brigades will have vehicles like the Tigr or the Italian LMV (Lynx), licensed production of which could begin in Russia this year.  One special Arctic brigade will be created at Pechenga. 

Several media outlets quoted Postnikov to the effect that there’s no plan to change 1-year conscription, but he noted:

“In the transition to one year military service, military men received only a headache.”

There’s lots more reaction to Postnikov’s statements, but it’s too much for one day.

Ground Troops and the GOZ

Buk-M2 (SA-17 / Grizzly)

Discussions of service wish-lists for State Armaments Program (GPV) 2011-2020 have tended to overlook the Ground Troops.  It seems they don’t enjoy the same priority as other services.

But in late February and early March, there was a flurry of press detailing what the land forces intend to procure, at least in the short term. 

Arms-expo.ru, Lenta.ru, and other media outlets put out brief items on Ground Troops’ acquisition.  They indicated the Ground Troops will emphasize air defense, command and control, fire support, and BTRs and support vehicles.

But the best run-down of all came from Ground Troops CINC General-Colonel Aleksandr Postnikov himself in Krasnaya zvezda.

Postnikov told the Defense Ministry daily that the main feature of GOZ-2011 is the transition from the repair and modernization of existing systems to the purchase of new, modern ones to reequip Ground Troops formations and units completely.

First and foremost, according to the CINC, the Ground Troops will buy modern digital communications equipment and tactical-level automated command and control systems (ASU), like Polyana-D4M1 for air defense brigades.  He said Ground Troops’ Air Defense will also receive modernized S-300V4 systems, Buk-M2 and Buk-M3, short-range Tor-M2U(M) SAMs, and manportable Igla-S and Verba SAMs.

Postnikov says they will continue equipping missile and artillery brigades with the Iskander-M, new MLRS, self-propelled Khosta and Nona-SVK guns, Khrisantema-S antitank missiles and Sprut-SD antitank guns.

The Ground Troops CINC says he foresees purchases of a new modification of the BTR-82A, BREM-K armored recovery vehicles built on a BTR-80 base and BREM-L on a BMP-3 base, Iveco, Tigr, and Volk armored vehicles, and new KamAZ trucks from the Mustang series.

NBC defense (RKhBZ) troops will get the heavy flamethrower system TOS-1A, RPO PDM-A thermobaric missiles with increased range and power, and VKR airborne radiological reconnaissance systems.  Engineering units will get the newest water purification system on a KamAZ chassis (SKO-10/5).

In the longer term, Postnikov sees rearmament as one of his main tasks, and he repeated President Medvedev’s statement that the Ground Troops should have 30 percent modern equipment by 2015, and 70 percent by 2020.  He laid special stress on getting YeSU TZ into the troops.  Postnikov’s Glavkomat has a Concept for the Development of the Ground Troops Armament System to 2025 emphasizing standardization, multi-functionality, modular construction, and electronic compatibility across several general areas:  armor and military vehicles, tube artillery and MLRS, SSMs, antitank systems, air defense, reconnaissance-information support, UAVs, communications, automated command and control, and soldier and close combat systems.

Popovkin on OPK, IVECO, Mistral, and Bulava

Speaking to journalists at Euronaval-2010 today, First Deputy Defense Minister Vladimir Popovkin said the Russian Navy needs modernization more than the other armed services.  And defense industry needs modernization badly.  Popovkin noted:

“Many industry representatives came to the exhibition with the military.  At the exhibition we always need to examine what’s best in the world, have talks, and look at where we aren’t up-to-date.”

 “Without reequipping the Russian defense industrial complex it’s impossible to produce modern equipment.”

 “Our task is not to buy foreign equipment, but technologies on the basis of which we would be capable of organizing production in Russia.  We, unlike some other countries, are not secretly copying examples, but openly we say we’re prepared to pay for technologies, to buy licenses for production of this or that equipment.  The main condition is the transfer of production to Russian territory and the transfer of technologies.”

Is Popovkin slamming China?  Is China copying secretly or actually quite brazenly?

On the joint venture (JV) with Italy’s IVECO, Popovkin said:

“A JV for producing these armored vehicles on RF territory has been created.  Next year it will begin production.  The first vehicle will come out at the end of 2011.”

“Essentially, this is final assembly.  Nevertheless, we are planning that more than 50 percent of the components in this vehicle should be of Russian manufacture.”

Popovkin said Russia is now in talks on the specific model:

“We’ve presented specific requirements.  Why?  We have our own weather conditions, different employment tactics, therefore the base model will be developed taking Russian conditions into account.”

 ITAR-TASS noted the JV will put out vehicles needed for both the Defense Ministry and the MVD.  Licensed assembly of several hundred units of IVECO’s LMV M65 annually could occur at one of Russia’s automotive factories.

Popovkin also said Russia’s tender for amphibious assault ships has been announced:

“We’ve announced the tender for the purchase of amphibious assault ships.  Two ships will be built abroad.  Technology transfer for the construction of the rest is planned.”

It sounds like Popovkin’s decided a Russian shipyard can’t win the competition for the first two units.  Are Russian builders just competing for units 3 and 4?

Asked about the number of Bulava launches in 2010, Popovkin said:

“We’re acting sequentially, step by step, therefore it’s impossible to say now the exact number of launches in 2010.  The main task now is to conduct the next launch.  Based on it, we’ll determine our future plans.  Until we get reliability of 98-99 percent, we won’t put this missile on combat duty.  The missile’s reliability is determined not just by launches, but also by a whole series of testing work.”

Meanwhile, a Defense Ministry source has told ITAR-TASS the second Bulava launch of 2010 will occur on 29 October.

Light Armor Acquisition Still Undecided

RIA Novosti reports the Defense Ministry is still undecided about purchasing European-made light armor for its military vehicles.  Defense Minister Serdyukov has said Russia might buy it from a German company.

Monday Deputy Defense Minister, Armaments Chief Vladimir Popovkin visited Italian firm IVECO’s display at Eurosatory-2010 in Paris.  IVECO uses German technology in fabricating light armor. 

Popovkin said:

“Issue of acquiring light armor and technology for its fabrication still isn’t decided.  Domestic scientific-research institutes still haven’t answered us about whether they’re ready and capable of making such armor.  If they make it, then we’ll use it, if they don’t, we’ll search for ways of getting Western technology for its subsequent production in Russia.”

Popovkin also indicated leading military producers are actively developing a new class of wheeled armored vehicles.  He said in the Russian Army’s modernization there are plans to establish light, medium, and heavy brigades.  Light brigades will have wheeled, medium wheeled and tracked, and heavy only tracked vehicles.  

A RIA Novosti source said:

“A lot depends on the deployment locations of these brigades and the combat missions they’ll be given.  This will be the determining factor for supplying brigades with this or that equipment.”

As an example, he mentioned IVECO’s development of a 29-ton wheeled tank with composite armor and a 120-mm main gun.

Serdyukov Looks at IVECO Light Armored Vehicles

Defense Minister Serdyukov indicated today that, although Russia is interested in foreign light armored vehicles, it won’t buy any, and wants to produce its own.

During last week’s visit to Italy, IVECO put on a demonstration for Serdyukov at Moscow’s request.

According to RIA Novosti, Serdyukov said:

“The Defense Ministry is actively studying modern tendencies in arms employment.  Particularly in transporting personnel, medical personnel, and also reconnaissance in light armored vehicles.  The experience of Afghanistan and Iraq and our experience (in the regions), where explosions often occur, shows it’s essential to transport Defense Ministry sub-units in armored vehicles.”

Maybe Serdyukov should have said we already transport troops in armored vehicles, but we need to transport them in good, modern ones.

Serdyukov also noted that Germany is actively studying armor protection for troops, and Russia’s Defense Ministry is interested in similar production of its own.  He called Germany the leader in armor, and noted that German armor is mounted on Italian vehicles.  Serdyukov continued:

“We’re not talking about purchases of these vehicles in Italy or another country.  The main thing is to organize production of such equipment in Russia.”

Moscow Considering Italian Light Armored Vehicles?

Russkiy Newsweek yesterday said a source close to the Defense Ministry claims Moscow is considering buying Italian IVECO M65 vehicles, also known  as the LMV (Light Multirole Vehicle).  The source said negotiations are in the final stage, and LMVs are reportedly being tested in Russia, but opinions on their suitability for Russian conditions are varied.

Another problem–the LMV is basically an analogue of Russia’s Tigr, produced by Arzamas Machinebuilding Plant, a company belonging ultimately to Oleg Deripaska.  The LMV is 1.5 or 2 times more expensive than Tigr and carries fewer personnel.  But it is considered more explosion resistant.  Deripaska’s people dispute this, however, saying it depends on how close the vehicles are to the explosion.

Russkiy Newsweek says the LMV was shown to Putin last year, and Medvedev this year.  It adds LMV to a list of proposed or actual Russian arms buys abroad, including British sniper rifles, Israeli UAVs, and French Mistral helicopter carriers.  The possibility that United Shipbuilding Corporation (OSK or ОСК) chairman and Deputy PM Igor Sechin (a long-time Kremlin insider and Putin crony) could still derail the Mistral deal is raised, but somehow this seems unlikely now for many reasons.  Why wreck a lucrative deal when you can get a piece of it instead?

The article concludes noting that this is the logical continuation of a new Russian military-technical policy–Russia can no longer be considered a closed market and soon Russian companies will have to compete with foreign producers for this internal market, according to CAST’s Ruslan Pukhov.

But there’s more to this story than that . . . some foreign samples are always good if you can get them, some palms might get greased in the process too.  It’s not a bad idea to scare the domestic defense industries, but are they really in a condition to compete with foreign producers?  Rather than stimulate them to get better and more efficient, they could just collapse in the face of a real competition for sales.  And it really goes against everything Russian to rely on foreigners, especially when they’re part of an allegedly hostile NATO.  But mucking about in NATO’s Old European rear area isn’t bad for stirring a little alliance discord.  Just weeks ago too the Russian press had stories featuring President Medvedev with the Tigr and the VDV seems pretty committed to the vehicle.  Let’s just say many factors are in play, which will be the critical ones?