Published: 5/31/2000

Newly elected President Putin has drawn heavily on the military industrial complex for support during the last few months. He has even brought one of their number, Alexander Dondukov, formerly Chairman and General Designer of Yakolev, into government, as the minister responsible for industry and technology reporting to Ilya Klebanov, who retains overall responsibility for the industrial portfolio and his position as Deputy Prime Minister, a not unexpected appointment for a man seen as a Putin loyalist. This slight change at the top is however, not viewed by those familiar with Dondukov as being likely to lead to a dramatic change in aerospace policy. Dondukov is seen as being above all a politician and to have risen to his present position not through taking radical stances. The former MiG designer has however achieved his position from one of the bureaux most likely to be at risk in any reorganisation of the industry, given that it was perceived to lack political weight, although the Dondukov appointment may have altered that view. On other fronts however, the heavy regional opposition to the first phase of aerospace restructuring witnessed at Sukhoi and to a lesser extent elsewhere, may have be resolved by the appointment of seven presidential representatives to exercise federal power over seven newly created regions covering all of Russia. The view is that Putin is sending a clear message to the regions of his intention to see federal objectives achieved, by appointing five generals among the seven representatives. Stronger federal power may have the impact of pushing through at least organisational reform such as the completion of the joint stock company Sukhoi. What the next stage will be is unclear. Klebanov has said, as has Putin , that they want a viable industry with 'two to three' participants and there is little to suggest that the view has changed, particularly given the importance of the aerospace sector to industrial production, representing as it does 40% of the total at present. The necessity to bring the constituent elements to heel however, remains, and even the threat of little or no funding from the Russian Aerospace Agency, still does not deter companies from announcing programmes and projects with little commercial logic or viability. The government has however, been dealt a setback of late with the An-70's adoption by Germany looking increasingly unlikely, after the UK's decision to make a European choice in the A400M and with the Russian Air Force reported to be favouring the cheaper re-engined and stretched Il-76MF over the An-70. This suggests the programme will struggle to find funding for production in the Ukraine and at Aviakor, funding which according to reports is urgently needed. There has been little in the way of statements from the involved parties, but the programme, which was seen by many as one of the Ukraine's and Russia's few truly internationally competitive aircraft, is looking increasingly vulnerable. In civil transport, the new government may be the death knell of the independence of the aviation authority, the FSVT, which is reported to be currently contemplating life as a department of the Ministry of Transport, its former home until 1997, when Zaitsev, the former General Director, persuaded Yeltsin to give it separate status. The reason being given for the change is the lack of political weight in the corridors of power of the current General Director Andreyev, a former Air Defence General. He is reported to have failed to persuade the authorities of the virtue of the agency being given ministerial status, therefore returning it to the Ministry of Transport as part of a plan to consolidate ministries. Andreyev is also reported to have few friends within the industry and as being perceived as unresponsive to the plight of the embattled civil sector. Despite the fervent 'business as usual' from Andreyev , the agency is nervous, with rumours of job cuts and a potential change at the top, with a number of names being mentioned as possible replacements for the General Director including Pleshakov from Transaero, Surinov of the Transport Clearing Chamber and Zaitsev, the former General Director.

Article ID: 1820