State-owned helicopter conglomerate Russian Helicopters plans to bring the Mil and Kamov design bureaus under a single organizational structure before 2022, according to a company statement.
Russian Helicopters (itself controlled by government holding company Rostekh) announced the two longstanding bureaus will be united in a new National Helicopter Center named for M. L. Mil and N. I. Kamov [National Center of Helicopter-building or NTsV — НЦВ].
Mil and Kamov will be joined in one business by mid-2020. “Further integration processes connected with optimizing the activity of the two design bureaus in the format of one company will continue until 2022,” Russian Helicopters noted. The company said the center will unite the potential of the two helicopter-building schools for more effective resolution of design and modernization missions.
The independent Mil and Kamov “brands” will be retained, but their workers will be combined in the NTsV. The merger is supposed to remove existing administrative, legal, and economic barriers to cooperation between their designers.
Interfaks-AVN reported the establishment of the center is explained by a need to optimize the work of a whole range of supporting and administrative sub-units and to allow engineers from both bureaus to exchange technical solutions, unify standards, and share work loads.
Besides cutting management and labor costs, the union of Mil and Kamov is supposed to reduce the time required to put helicopters into serial production.
According to Russian Helicopters’ deputy general director Mikhail Korotkevich:
By our accounting, the distribution of tasks between two design bureaus, as well as between the production and repair plants of the holding will allow us to free up 15-20% of their annual effort which can be directed at creating technical reserves and developing new equipment.
Korotkevich added that Russian Helicopters wants to eliminate “unnecessary competition” between Mil and Kamov on similar helicopter designs. He expects more efficient use of infrastructure and lower expenditures on testing to come from the merger of the bureaus.
This merger of Russian helicopter giants will be interesting.
There are mergers and then there are mergers. Putting Mil and Kamov under the same tent as separate entities is one thing. Сhanging their business and breaking their “rice bowls” is something else. Actually achieving efficiencies and savings is another thing too.
From Soviet times, the Russian approach was to create competition where it wasn’t in the socialist centrally-planned economy. That’s how the MOD and defense industry created world-class armaments — Sukhoy vs. Mikoyan, Ilyushin vs. Antonov, Rubin vs. Malakhit, Yuzhnoye vs. Makeyev vs. MITT, etc.
Over time the design bureaus — probably guided by the MOD and government — tended to concentrate on their specialties rather than competing directly.
This hasn’t stopped brutal clashes particularly when state purchases of weapons systems are limited or declining. It may be happening now, and it may have led the Kremlin to rationalize Russia’s military helicopter market. But blending Mil and Kamov won’t be easy. There has been more recent bare knuckle competition between the helicopter designers than in other segments of Russian defense industry.
In recent days, Primorye media reported on a demonstration by workers at Kamov’s AAK Progress plant 100 km northeast of Vladivostok. They are protesting the lack of orders for their helicopters and attendant cuts in the work force.