Sovershenno sekretno’s Vladimir Spasibo describes the early post-Cold War process of mergers and consolidations in the Western defense industries, and then asks:
“And how are our integration processes going? By altogether different schemes. Mainly by creating industrial ‘kolkhozy.’”
His example is the United Aircraft Corporation (UAC or OAK) which conglomerated most Russian aircraft designers and producers.
Spasibo says this consolidation should have eliminated problems with skilled personnel shortages, technology losses, obsolete production lines, low labor productivity, product quality, duplicative development, and excess capacity. But it didn’t.
Spasibo examines the labor force in the OPK’s aircraft industry. He claims with VVS purchases of 380 billion rubles per year, and productivity of 6 million rubles per worker (three times less than Boeing’s rate), there should be 66,000 workers in Russia’s industry, but its 6 lead plants have more than 100,000 workers, and the aviation industry overall has more than half a million.
He looks then at the labor force for the entire OPK. With purchases totaling 19 trillion rubles, with modest productivity of 3 million rubles per worker over ten years, the OPK should have 630,000 workers, but Rostekhnologii General Director Sergey Chemezov says there are now 1.2 million. And Spasibo concludes good specialists won’t work for what companies are able to pay as a result.
Chemezov has pointed out that only 36 percent of Russia’s “strategic enterprises” are financially stable; at the same time, 30 percent show all the signs of bankruptcy. The situation is particularly bad in the munitions and special chemicals sector, where nearly 50 percent of companies look like potential bankruptcies.
Spasibo adds that only 15 percent of the OPK’s technologies meet world standards, 70 percent of basic production assets are outdated, and the equipment renewal rate is only 3-4 percent. He says:
“To count on these companies being able to produce the weapons required is laughable. But they will absorb the money they receive. Naturally, without any particular result for the reforming Armed Forces.”
Spasibo concludes:
“The ‘estimated expenditures’ of the Defense Ministry obviously demonstrate that we’re again being dragged into a senseless and dangerous arms race which in no way increases our military security. On the contrary, it increases the risk of creeping into military conflicts.”
“NATO and the U.S. absolutely don’t need a war with Russia. China doesn’t either. Even despite periodic rumors that it has territorial claims on us.”
“But it’s impossible to make these claims by military means. Especially if Russia will have a modern high-tech army. But once again no one is building it. And doing this is impossible, scattering resources on strategic arms, VKO, an ocean-going fleet, whose role in the hypothetical case of war is completely incomprehensible. The situation’s exacerbated by the lack of an entire series of experimental models fit for production and supply to the Armed Forces, an obsolete technological and organizational structure of OPK enterprises which, most likely, will turn the money into dead metal.”
“During perestroyka, we learned that the USSR lost the ‘Cold War’ to the U.S. and that the arms race killed the Soviet economy. Scholars and commentators talked about this with figures and facts. In those days, there were many suggestions about what to do with the Armed Forces and VPK. But all this ended in empty talk. In fact, they simply killed the VPK. They practically didn’t invest money in the Armed Forces. There was neither an army, nor a defense industry to arm the army.”
“And here a time has come when the Kremlin and the White House have decided to modernize the army and, using the financial possibilities that have appeared, to pour 20 trillion rubles into it before 2020. But won’t we now be stepping on the very same rake as in the eighties, won’t the president and premier be repeating the mistakes of the Politburo, initiating a thoughtless and dangerous arms race? The key word here is thoughtless.”
“Of course, the draft State Program of Armaments, 2011-2020 is a document under the top secret seal. Does this mean the public shouldn’t discuss and understand what trillions will be spent for. Or is it the prerogative of a narrow circle of interested officials — lobbyists for the VPK and the military?”
“The trouble is old and familiar. Recently deceased Academician Georgiy Arbatov wrote about it in 1990: ‘An affair most important for the country and the people — defense, security, fantastically large military spending — was monopolized by a narrow group of generals and general designers from military industry.’ And further: ‘I think the military shouldn’t be given a monopoly on assessing the threat of war. Just the same it’s reasonable not to make this assessment without accounting for its opinion.’ It just shouldn’t dominate this.”
Thank you Mr. Spasibo. A good article. He has a clear point of view on the issue of the GPV and where the Russian military might or might not be headed. But where does it leave us?
Just a little commentary . . . Spasibo says Russia aims to match NATO, the U.S., and maybe China too. This raises the issue of whether it should aim for this and whether it can achieve this. The answer to both is no.
That is, however, not the same thing as saying the Russian Armed Forces don’t need to modernize. If they were smart, they’d aim for capabilities to offset the advantages of their stronger potential enemies.
That means difficult picking and choosing, something we haven’t seen much of in the GPV, where it looks like every service is at the table awaiting a full meal.
Russia is definitely not France, but this doesn’t mean Moscow has to defend everywhere. Perhaps it should prioritize and worry more about Vladivostok and China than about Iturup and Japan.
Spasibo does a good job of pointing out that there are at least as many problems in the VPK, the OPK as in the military itself. And yet there’s no real effort yet to remedy them. All of this goes to whether Russia can reach whatever aim it sets for military modernization. As Spasibo says, they might just be sending good money after bad. They may be risking a repetition of past mistakes by overspending on arms, but, of course, they may not even get a chance to repeat these mistakes if money isn’t allocated. Remember that previous GPVs died of financial starvation in their infancy.
One’s not sure about Spasibo’s argument on Moscow’s promotion of an arms race. Right now, only the Russians need to ‘race’ — and the race is to catch up after years of falling behind. And it doesn’t necessarily need to catch up to the extent that it duplicates U.S. capabilities.
And yes Spasibo’s right in saying these defense expenditures should be debated and decided more widely and publicly, but unfortunately Russian citizens have even more basic and important political and social issues that need that kind of scrutiny first before they get down the list to military procurement.
Russian Defense Policy 