Rostec Will Unite Sukhoi and Mikoyan Design Bureau To Avoid Bankruptcy

Amidst falling international sales, joint U.S. and European Union sanctions on the Russian military industries, the Russian aircraft industry is facing tremendous pressure to stay aloft.  New programs such as the Su-57 fighter jet, PAK DA and the MC-21 commercial airliner are ten years behind schedule.

Rostec State Corporation (Rostec) will unite United  Aircraft Corporation (UAC) UAC, Sukhoi and MiG companies into a single corporate aircraft manufacturing center, which will consolidate the management of aircraft programs and other UAC assets.

The UAC Corporate Aircraft Center, where Sukhoi and MiG will join, will consolidate the functions of managing aircraft programs, and will also become the managing organization for Tupolev, Ilyushin and the Irkut corporation as well, a Rostec release said.

The engineering and design functions of the group will be separated into a separate center, which will be located in Moscow – it will include all aviation design bureaus.

The decisions were announced by the General Director of the State Corporation Rostec Sergey Chemezov yesterday at a meeting with the UAC management and its leading engineering centers, where the tasks of the development of the aircraft industry for the coming years were discussed.

The objectives of the transformations are to increase the economic sustainability of the UAC Group, optimize the administrative and managerial staff, and reduce non-production costs and debt burden. To control the ongoing transformations, the head of Rostec, Sergei Chemezov, will head the UAC board of directors.

The optimization will not affect the engineering staff. Design schools will remain independent, receive new opportunities for development, as well as improved working conditions in the format of the Unified Engineering and Design Center. The center will be located in Moscow, where the existing test and bench infrastructure of the UAC is concentrated. Moving aviation design bureaus to other regions is not on the agenda.

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“We are forming in Moscow a unified management organization and a unified center of design competencies for all UAC companies. Systemic reforms should improve the structure of the company and solve the issues of its financial stability, increase the competitiveness of domestic civil aircraft and cover the significant needs of Russia in modern aircraft for passenger transportation,” said Sergei Chemezov.

 “The structural transformations, are aimed at increasing the utilization of production capacities and labor productivity. The cumulative optimization effect from the ongoing transformations should be up to 130 billion rubles,”s aid UAC General Director Yuri Slyusar.

About Rostec

Rostec State Corporation is one of the largest industrial companies in Russia. It unites more than 800 scientific and industrial organizations in 60 regions of the country. Its key areas of activity are aircraft engineering, radioelectronics, medical technologies, innovative materials, etc. The corporation’s portfolio includes such well-known brands as AvtoVAZ, KAMAZ, UAC, Russian Helicopters, UEC, Uralvagonzavod, Shvabe, Kalashnikov, etc. Rostec is active in the implementation of all 12 national projects.

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