Tag Archives: Yuriy Solomonov

The GOZ Last Week (Part II)

We looked at last week’s news.  What’s it mean?  There wasn’t a lot of commentary about it, but there were two very good pieces.

To backtrack a little, if it looks like Defense Minister Anatoliy Serdyukov might be (just might be)  getting an upper hand on forcing defense producers to his prices instead of vice versa, then the commentaries give insight into what is happening (or may happen) if Serdyukov succeeds in driving hard bargains with the OPK.

Moskovskiy komsomolets’ Olga Bozhyeva asked a general who worked on the GOZ to comment on this year’s situation:

“The Defense Ministry now lacks an organ with responsibility for contracting work, beginning with formation of initial prices and ending with accepting the results.  In the past, the chief of armament’s apparatus performed these functions, currently it’s been transformed into a department with unintelligible functions.  Tax organ officials who’ve come into the Defense Ministry’s key financial posts can’t connect the price of a product with the characteristics of the model being produced and its contribution to the country’s security.  In the Defense Ministry in recent years, three basic methods of calculating the cost of a product have been introduced, but not one of them factors in the substantive part of the work.  They are all built on the principle:  I have a certain amount of money, I want to give you this much of it.  But putting it to concrete use no longer interests anyone.  And it turns out that the methods of calculating prices in the Defense Ministry and in VPK enterprises are different.  The people speak different languages . . . .”

Bozhyeva concludes:

“In a market economy, you have to survive somehow.  Here is not America, where work for the Pentagon brings a good profit.  With us, it only allows you to survive.  And that is if they allow it.  But they don’t let everyone.”

“Here not long ago the Defense Minister got indignant, for example, that shipbuilders [Sevmash] had become so brazen that they also put the cost of kindergartens and other “social benefits” into the price of a missile-carrier [SSBN].”

“I’m not a taxman, evidently, since I don’t understand:  but where can they put it?  Let’s take Severodvinsk here.  It is completely dependent on “Sevmashpredpriyatiye.”  Like it or not, the kindergartens, schools, hospitals, clinics, housing – the factory has to maintain all of it.  And, naturally, they put the upkeep into their production cost.  How can it be otherwise?  If there aren’t kindergartens – there aren’t missile-carriers.”

Editorializing in Nezavisimaya gazeta, Viktor Litovkin writes:

“What are the causes of such an ‘inability to agree?’  In the fact, in my view, that it’s impossible to marry purely administrative approaches to the imposition of concrete military department prices on defense enterprises with largely market relationships which exist for the defense sector today.  With achieving that degree of Gosoboronzakaz profitability in which enterprises have the chance not just to survive, but also develop.  Several defense NII and factory directors, undoubtedly following the example of MIT General Designer Yuriy Solomonov, have already even stopped ‘fearing’ to publicize their disagreements with the Defense Ministry in front of journalists.  General Director of NII Instrument-building named for Tikhomirov, Yuriy Belyy told me ‘in the ordering structures of the military department people have come, who, to put it mildly, don’t understand anything about production and price formation’ (this, by the way, also means Anatoliy Serdyukov. – ‘NVO’ No. 25).  ‘Still they always demand the reduction of invoiced expenditures, reduction of profits, of labor input.  And often arbitrarily disregard prices on final goods.’  This, in his words, is happening all over the defense sector.”

“’If we had the GOZ alone, the enterprise would have died long ago,’ Yuriy Belyy told me.  ‘There are practically no resources remaining for development after GOZ fulfillment.  It isn’t understood that wages take according to some kind of averaging principle.  Invoicing expenses also.  So goes the practical strangulation of the defense sector.  In the country’s leadership they say that the OPK’s profitability is the locomotive of industry, should be not less than 15%, but in fact it’s not more than 5-7%.  And, the main thing, not understood, is with whom to talk in the Defense Ministry.  Completely incompetent people have arrived.  Their mission is not the development of industry, not increasing the country’s defense capability, their mission is to save money by any means.’”

“An enterprise producing a final product, like ‘Dolgorukiy,’ which buys metals, nuclear reactors, various components at market prices from the monopoly producers of these products, can’t give away the good created by its workers lower or a little, one-two percent, higher than its own cost, or lower than its profitability level.  It can’t buy new machine tools, technology, reequip its production line, train and select new highly-qualified personnel, provide them housing . . . .  It can’t not think about tomorrow.”

“And from the other side, if it’s possible to pay the French one and a half billion Euros for ‘Mistrals’ we need or don’t need, then why does ‘Sevmash’ have to give away a strategic submarine extremely essential to the Navy and Russia for free?!”

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Latest on GOZ Woes (Part II)

To review this week . . . Prime Minister Putin’s current deadline for completing GOZ contracts is August 31, but it’s unlikely to be met, even by loyal Deputy PM and OSK Board Chairman Igor Sechin.  Deputy Finance Minister Siluanov said Defense Ministry contracts are being made on credits and government-backed financing rather than cash.  Putin said the price tag for GOZ-2011 is 750 billion rubles, but 30 percent of projected procurement still isn’t covered by contracts as the final third of the year begins.

How did the government, Defense Ministry, and OPK arrive at an August 31 deadline that’s unlikely to be met?

The latest round of this year’s GOZ woes started in early July when MIT General Designer Yuriy Solomonov told Kommersant that GOZ-2011 was already broken, and Russia’s strategic missile inventory is not being renewed as necessary.  He said there’s no contract for the RS-24 / Yars ICBM, and the late arrival of money makes it impossible to salvage 2011.

President Dmitriy Medvedev responded by calling Defense Minister Anatoliy Serdyukov on the carpet.  According to RIA Novosti, he told him:

“Sort out the situation.  If there’s information that the state defense order is broken, it’s true, organizational conclusions are needed in connection with those who are responsible for this, regardless of position or rank.”

“If the situation is otherwise, we need to look into those who are sowing panic.  You know how according to law in wartime they dealt with panickers — they shot them.  I’m allowing you to dismiss them, do you hear me?”

RIA Novosti reported Serdyukov’s opinion on the “wild growth” in the price of military products, especially from MIT and Sevmash.  He said MIT is asking 3.9 billion and 5.6 billion rubles respectively for Topol-M and Yars ICBMs.  Serdyukov put GOZ-2011 at 581 billion rubles [different from Putin’s figure!], and added that only 108 billion, or 18.5 percent, was not yet under contract.  He said everything would be done in 10 days.

At virtually the same time, Deputy PM and VPK Chairman, Sergey Ivanov told ITAR-TASS 230 billion rubles were not yet contracted out.  OSK piled on Serdyukov, claiming contracts for 40 percent of the Navy’s share of the GOZ weren’t finalized.

In late July, it looked like Northern Wharf (which reportedly produces 75 percent of Russia’s surface ships, and is not part of OSK) might be made into an example for other “GOZ breakers.”  While prosecutors talked vaguely about the misuse of GOZ money, the shipbuilder’s representatives apparently mounted a vigorous defense, asserting that the enterprise has been right on time, even though it’s underfinanced by the Defense Ministry.

Main Military Prosecutor Sergey Fridinskiy said prosecutors uncovered 1,500 GOZ-related legal violations during the preceding 18 months.  He indicated there were 30 criminal convictions, and state losses amounted to millions of rubles in these cases.  The most egregious example  was the theft of over 260 million rubles given to OSK’s Zvezdochka shipyard to repair Kirov-class CGN Petr Velikiy.  Fridinskiy indicated the enterprise director and his close associates apparently had 40 million of the money in their own names.  Recall Fridinskiy earlier said 20 percent of defense procurement funding is stolen.

According to Rossiyskaya gazeta, Defense Minister Serdyukov claimed he was on the verge of signing contracts with MIT for Topol-M and Yars production.  Once again, he said all contracting would be finished in two weeks.

In mid-August, OSK enterprises Sevmash, Admiralty Wharves, and Zvezdochka said they would soon be forced to cease work unless the Defense Ministry signed contracts with them.  Putin, Sechin, and Serdyukov met and launched a special interdepartmental commission to set prices for the Navy’s remaining 40 billion rubles in GOZ contracts.  And, according to Kommersant, everyone was once again reassured that all contracts would be completed in two weeks.

And it’s not just all ICBMs, ships, and submarines . . . Kommersant wrote that the Defense Ministry eschewed contracts for 24 or more MiG-29K and more than 60 Yak-130 trainers at MAKS-2011.

So what does the mid-year GOZ picture look like? 

The president and prime minister have fumed and set a series of deadlines, not met thus far.  And the defense minister and deputy prime ministers have assured them they would meet each deadline in turn. 

More interesting, and somewhat unnoticed, is the fact that the prime minister and defense minister (among others) seem to be consistently working from different sets of numbers on the size of the GOZ, and how much has been placed under contract.  The GOZ hasn’t captured this kind of leadership attention at any time in the past 20 years.

Producers are being honest when they say late state contracts mean they can’t do anything (or at least what the Defense Ministry wants them to) in what remains of the year.

Picking up the pieces of GOZ-2011, and trying to put GOZ-2012 on a better footing will occupy the rest of this year.

Lost in everything is what will the Russian military get eventually by way of new hardware, and when will they get it?  And how good will it be?

Solomonov on Need for Increased Missile Production

MIT General Designer Yuriy Solomonov told Interfaks yesterday Russia needs to increase intercontinental ballistic missile production in the coming years to preserve its strategic nuclear forces (SYaS or СЯС).  See a more complete version of his remarks at Arms-expo.ru.  He said:

“We have two years at our disposition to be in a condition, proceeding from implementation of the production preparation program, to get all cooperation ready for the possibility of manufacturing a large quantity of products.  Many times more than have been made previously.”

He said Russia has produced 6-10 missiles per year over the last ten years.  And he acknowledged that plans for increased production volume may not be fulfilled:

“All this rests, with respect to corporate enterprises, on resolving the task of allocating them investment.  And the regulatory-technical base — the way officials interpret it — doesn’t allow for resolving this task.  If it isn’t resolved, it’s possible to say unequivocally that the task of significantly increasing the volume of products delivered by 2013 won’t be fulfilled either.”

So he’s saying the reluctant state will need to invest in Votkinsk and its component suppliers?

Solomonov notes that the Votkinsk plant, manufacturer of the Topol-M and RS-24 ICBMs, produced up to 120 Pioner (SS-20) medium-range missiles a year between 1980 and 1987.  He says:

“It follows from this that the production capabilities of the factory undoubtedly allow it to realize, proceeding from this potential, production of a substantially larger quantity of missiles than in the preceding ten years.”

Solomonov and Bulava

Bulava designer Yuriy Solomonov seems to have come out from underground now that the Bulava SLBM has some successes under its belt.

Yesterday the Russian media carried excerpts from a soon-to-be-published interview with Igor Korotchenko’s Natsionalnaya oborona

Solomonov already has a book about his adventures in missile design to his credit.  The only thing that’s changed is the Bulava program seems to be righting itself.

Solomonov said, not surprisingly, that the Bulava’s warheads are ready, and he expects the missile to stay in the inventory until 2050.

He expects Votkinsk to ramp up for Bulava production.  He noted that, for a facility that produced 100 missiles a year in Soviet times, “Now there isn’t any kind of problem from the point of view of organizing the technological process and organizing people for this task.”

Solomonov said Borey-class SSBN Yuriy Dolgorukiy will begin (like Dmitriy Donskoy did) with a surface test launch.  But he doesn’t rule out that this could be changed to a submerged launch.  The tentative date is 17 December. 

He forecasts 4 tests in 2011, the start of serial Bulava production, and possibly the missile’s acceptance into the Navy arsenal, if it achieves a “high reliability coefficient.”

In the interview, Solomonov apparently will talk about how Bulava could be adapted into a ground-launched missile.  This brings back the whole issue of “inter-service unification,” which led to some of the excitement with Bulava.

Svpressa.ru and Anatoliy Tsyganok have a good time lambasting Solomonov for this (again) if you want to take a look.

Three Identical Missiles

The Defense Ministry’s inter-departmental commission didn’t make any announcement about its work or the causes of Bulava SLBM test failures as had been anticipated on 20 May.  If this commission has clues about the missile’s problems, it didn’t reveal them.  But Kommersant concludes that the Defense Ministry hasn’t reliably determined the causes of previous failed launches.

However, on 21 May, Defense Minister Serdyukov announced a new approach to Bulava testing.  The Russians will make three identical missiles and launch them in hopes of pinpointing the same problem in each.  It’s a gamble, but it could work.

RIA Novosti quoted Serdyukov:

“The problem of the unsuccessful ‘Bulava’ missile launches lies in the assembly process.  We do not see any other violations there.  The whole matter is missile assembly quality.  Each unsuccessful launch has its own causes.  They are all different.”

“Now we are working on making three absolutely identical missiles.  We believe that this will allow us to precisely locate the mistake, if there is one, since it must be repeated in all three missiles.  Now we are working on how to control the assembly process in order to know that all the missiles are identical.  Toward November, I think, we can begin launching the missiles.  After this we will be able to identify the cause precisely.”

Earlier reports had said the next Bulava test would occur in June, but Serdyukov now says November at the earliest.  Over six years, only 5 of 12 Bulava launches have been successful or ‘partially successful.’  The missile launched on 9 December 2009 self-destructed after a third stage engine problem.  Grani.ru recalled that other recent problems included steering system and stage separation malfunctions.  Moscow had intended to put the Bulava on its new Borey, or Proyekt 955, SSBNs starting in 2007.

Gzt.ru describes the new three missile approach as an expensive “hit or miss” method.  The Defense Ministry hopes launching identical missiles will point to the same problem in each, if there is one.  But if they still manifest different problems, Moscow will be no closer to pinning them down.  The risk is another year without getting any closer to a new SLBM.

Gzt.ru concludes:

“Serdyukov didn’t specify what will happen if in the November series of launches of ‘Bulava’ each time a different component of the missile fails.  Apparently, this possibility isn’t being considered.”

Also in Gzt.ru, Defense Ministry critic Konstantin Sivkov describes the three missile plan as absurd and expensive.  With each missile costing 300 million rubles, it’s a 1 billion ruble effort and there’s no guarantee the bug, or bugs, will be identified.  He believes the designers will have to conduct stand tests where all components can be checked under controlled conditions.  He blames defective parts allowed into the system due to inadequate production controls.

Gazeta.ru cited one Andrey Ionin, a missile designer, who agrees the problem lies in the absence of technological discipline in the enterprises of the Russian OPK.  He says:

“Cooperation by several hundred enterprises, working under different forms of ownership, in different parts of the country, without observing all rules of technological discipline is pointless.” 

Nevertheless, simultaneous assembly of three missiles could be a way of searching for mistakes in Bulava.

MIT missile designer Yuriy Solomonov has said repeatedly it’s defective materials, production process breakdowns, and the lack of quality control, but neither he nor military men are saying which materials or processes they suspect.  He’s also said Russia lacks 50 materials needed for solid-fuel missile production.

In Kommersant, former RVSN general Viktor Yesin claims the Defense Ministry’s inter-departmental commission investigating Bulava has determined that enterprises didn’t cooperate and provided poor quality parts for the missile.  Still he sees no alternative to Bulava and believes its design is workable.