Klebanov talks the talk, but is government action walking the walk?

Published: 1/28/2000

It seems that the government may being turning up the heat on the consolidation of the aerospace industry, Deputy Prime Minister Ilya Klebanov responsible for aerospace industry, has declared that within the next three to five years, there will be two aviation manufacturing plants in Russia. According to Klebanov, "it is nonsense for a few dozen aircraft building plants and design bureaus to exist." Adding that their merger is essential for the industry to gain competitiveness and that the merger the dozens of design bureaus and plants into four entities is currently underway. Klebanov also said that the development of aircraft was a priority and that the Russian industry historically a leader in military aerospace and now lacked competitive products including a fifth generation fighter. While appreciating the tone of Mr Klebanov statements it should be remarked that the most recent of the vaunted restructurings the creation of the Sukhoi joint stock company. Left the major aircraft plant KnAAPO as a state entity, because of local concerns about privatisation. Suggesting that achieving consolidation into four entities may be difficult, especially in those regions where the aerospace activity may be the only enterprise with any semblance of viability. The government itself in the form of the Federal Property Ministry, can also be an obstacle to consolidation as appears to be happening in the Aviadvigatel/Perm Engine Company merger talks, where government"s concerns over dilution and its eagerness to retain some meaningful level of ownership, could drag the process out over a number of years.

Article ID: 1374