The producer's future, even as a component and upgrade facility, still seems dubious (1,005 words)

Published: 11/9/2001

Struggling producer Taganrog based TAVIA, omitted from the industry's restructuring, is reported to have agreed a rescue plan after a meeting between Vladimir Bartenyev, Deputy Minister of Industry for the Rostov Region and RAKA. However, TAVIA chairman Anatoly Pankratyev says no agreement has yet been signed. According to reports, the two sides proposed that RAKA would endeavour to encourage orders for the plant in three areas, provided TAVIA does not remain in external administration under Russian bankruptcy law. These are as follows: · Overhaul of military aircraft: a move recently publicly supported by Deputy Prime Minister Klebanov during a visit to Taganrog.(The company is currently overhauling maritime reconnaissance Tu-142MK-E (Tu-95) for India that is being rolled over on a yearly basis until 2007 for the 11 aircraft delivered to the Indians from 1988 onwards from the Taganrog plant) · Participation in the production of the Tu-334 (although this is already agreed) · Production of parts for the designs of TANTK Beriev (Be-200, Be-334, A-50). Discussions with Be-200 producers IAPO are reported to be underway, with no conclusion as yet. The plan's focus on overhaul and subcomponents supports Klebanov's statements in June that there will be no production of complete aircraft in Taganrog after 2003. Recent reports, however, have suggested that some element within TAVIA and Beriev believe the two entities should be reunited and remain committed to pushing the ageing Be-32K into a new guise as the Be-135, for military applications including AWACS, although Beriev is reported to be less enthusiastic than TAVIA. The long expected A-50 orders for India also appear to be in a holding pattern over technology export disagreements, although the recent lifting of the US defence embargo against India may make the environment more favourable for the AWACS variant of the Il-76. The General Director of Beriev, Vladimir Chub, has also suggested that later production of the Be-200 should be transferred from IAPO to TAVIA for possible production of a cargo version of the aircraft, although no tooling for such an aircraft exists at the plant and the move is unlikely to be well received by IAPO. Funding Funding for any new operations, however, looks more questionable, as sources within the plant say that revenue is only currently coming from the Tu-142 upgrades and other military overhaul work. This, while paying for operating costs and management wages, does not stretch to those of the workers that continue to have arrears stretching back to May. The funding for the Tu-334 remains elusive, despite its inclusion in the aviation programme through to 2015 and the recent public commitment at the Duma hearings on the future of the industry, while the aircraft slowly moves to certification. TAVIA is reported to expect no assistance from the region in getting the installed Tu-334 tooling into production, should orders emerge. Management struggles The company is due to have an AGM in December, where a new board will be elected along with a new General Director to replace Kasparyan, the plant's temporary manager, according to Pankratyev. Pankratyev optimistically adds that debts, reported to be $700,000 in June, should have been cleared by that point. The leading candidate for the role is Valery Kakurkin, Head of Engineering, holding the role of General Director at the same time as his predecessor, after a contested board meeting. The original AGM to elect the board in March 2001 was postponed as a result of a complaint by TAVIA shareholder OOAPK Karavai Plus, reported to be a bakery, and an 8% shareholder, a Rostov- based company called Rosif. The postponement was then followed by a split among the company management with the incumbent General Director Ivan Semchenko attacked by a group of managers led by Kakurkin, and two Deputy General Directors, Pogrebnyakov and Churkin, who then proceeded to arrange a meeting for 27th March, that was also subsequently cancelled by the Rostov Arbitration Court following a complaint from a small shareholder. A meeting was then called for 27th June by Alexander Denisov, the General Director of Karavai and the three TAVIA managers who collectively hold 10.7% of the company (the state being the major shareholder through RAKA with 44%). They only advised the existing board that such a meeting was taking place, and ignoring the subsequent decision against it on 6th June. The meeting went ahead on 27th June with the participation of some of the board including Anatoly Voskoboinikov and representatives for the government's 44% stake, despite having voted against the meeting on the 6th June. The meeting duly elected three representatives from Karavai along with Kakurkin as General Director and displaced four TAVIA managers. According to reports, Semchenko, who was on vacation, appointed his son as temporary General Director. He refused to accept the decision and tried to fire the new board members and have the meeting anulled by the Rostov Arbitration Court. However, the initiation of bankruptcy procedures by one of the company's creditors, owed $78,000, made the events redundant as both General Directors were replaced by the new temporary external manager, who should be replaced by the newly elected General Director in December. The future The failure to include TAVIA in the new aerospace structures was no mistake on the part of the Putin administration, given the plant's overall performance, expertise and poor record that contributed to the Be-200 going to IAPO. What is not clear is why, given the express intention to reduce it to a component and upgrade facility, as a 44% shareholder, the government should it find so difficult to achieve this. The simple answer is politics and a perfect illustration that, in the Russian aerospace sector, despite the best of intentions, the industry is not yet tamed and retains the fear of a wounded beast that has be shot before it realises that it is all over.

Article ID: 2901