US accused of stealing designs

Published: 3/14/2000

According to reports in from the Russian news agency, Versiya, concerns are being expressed by a number of sources that United Technologies may have used its relationship with Perm Motors, through Pratt & Whitney, to take design ideas from the Perm-based producer and to export them. Giving much credence to this type of story is always difficult. There has always been a grouping within Perm that is firmly opposed to any relationship with Pratt & Whitney and this opposition has seen several manifestations since relationships began in the early 1990s. As to the accusation of stealing ideas, the comment from one former insider at P&W is that it is “laughable … as it implies that Perm had something we wanted”. While Perm had strong laboratory work, it was never very capable of developing much of it to production, which left it well behind the West in most areas of materials science. The specific accusation relating to the acquisition of monocrystal developments is seen as being particularly absurd, given that P&W was producing such products 20 years ago. The reason for this recent revival of American bashing at Perm appears to have been stimulated by the recent speculation of who will control the engine maker. Ilya Klebanov, Deputy Prime Minster, while assuring the media during a recent visit to Perm that Gazprom would not take control of the company, at least until after the Presidential elections, was also being personally accused of being too close to Potanin-controlled Interros, the other major private shareholder besides P&W, as a former board member of the Potantin-controlled Oneximbank. Interros also controls LOMO, the electronics company that Klebanov previously worked for as a director until 1997. Interros is seen as being close to UTC and there one has the most up-to-date Russian conspiracy. With a change of government however, Klebanov's position of Deputy Prime Minster is by no means secure and if he does go, it seem s likely that the debate over Gazprom's interest in Perm may be revived by a new incumbent. How P&W/United Technology figures as the villain in the conspiracy is not entirely clear. It is not a competitor to PM, despite what certain factions in Perm would have us believe. It has committed large funds to the development of the plant's technology and it is thanks in no short measure to P&W/UT that the PS-90 is at all viable. Undoubtedly, the identification of an external threat would assist someone's case in limiting US involvement in the company, but it is difficult to see who would be a winner from such exclusion in economic terms, as P&W has provided much of the plant's ongoing investment, including the funds for the new PS-90A2.P&W has been reluctant to provide working capital, another complaint from the Perm detractors, who point out that PM could put the engines on the ten Tu-204 waiting for them if they had the working capital. How P&W would ultimately be repaid for such investment, is however, left to further speculation, with the only possible answer being, very slowly given the financing deals that have been put forward for the aircraft. Reports from within the plant, however, suggest that P&W would be more inclined to support the development of engines for the fulfillment of the Gazprom 400 turbine orders until 2006, than in producing aero engines. P&W however, denies this and as recently as January 2000 reiterated its support of the ongoing programmes and the PS-90A2. Why the US giant would invest over $125m in the engine maker and then seek to undermine it has never really been explained, particularly when the engine maker's primary competitors, GE and Rolls Royce, have made negligible commitments to the market or to its industry, although GE of late has been upping the ante with its plans to re-engine the Il-76 and plans for further developments with Rybinsk.

Article ID: 1674