Decisive government action remains the key (230 words)

Published: 2/9/2001

Anatoly Dekhtyarenko, vice president of the Union of Aviation Engine Building (ASSAD) has said recently that the association, made up of Russian aero engine designers and producers, intends to provide proposals for the restructuring of the industry to industry minister Alexander Dondukov and Yuri Koptev of the Russian Aerospace Agency for inclusion in the industry restructuring plan due in early March. According to Dekhtyarenko, the meeting to discuss the proposals focused on the difficulties of merging state entities and joint stock companies and the liability problems of profitable companies merging with those with large debts both to government and others. Suggesting that in principle at least the industry has little objection to mergers, some of which have already occurred as witnessed at Aviadvigatel and Perm, who now share common management. The state however, as the major shareholder in the joint stock companies and controller of the state entities, in addition to often being both the largest creditor due to tax debts, will be the decider of the industry's shape. It was however, unclear in the early stages of the Aviadvigatel and Perm merger in 2000, that it was sure what it exactly wanted to achieve and there was by no means equanimity between the various state agencies involved. With the merger viewed favourably by the aerospace agencies, but viewed with suspicion by the State Property Fund, concerned about any dilution of interest.

Article ID: 2347