Procurement: Reorganizing The Soviet Defense Industry


September 22, 2012: Russia is retiring the MAZ wheeled transports for many of their missile systems. This is because the MAZ firm is in Belorussia, one of the 14 new nations created when the Soviet Union fell apart. Despite the fact that Belorussia has been a close ally of Russia since the dissolution, Russia wants to build key military items within Russia and has been arranging for Russian firms to take over manufacturing weapons or components that were long built outside what is currently Russian territory.

During the Cold War Russia also had some key defense plants in Eastern Europe. These nations were called Russian "satellites" from 1945 (when Russian troops chased German forces out) until these occupied states finally broke loose in 1989. The newly independent East European nations were not interested in continuing to supply Russia with military items, and Russia agreed to this when it became clear that the newly liberated East European states wanted to join NATO.

Russia was left with a unique problem after the Soviet Union dissolved in 1991. To avoid a civil war, or endless litigation, the dissolution agreement had ownership of the many state owned factories transferred to the new country they were in. Russia lost half its population in 1991 as 14 new countries were formed by the Soviet Union dissolving. Russia ended up with most of the military related factories and research centers but many key plants (especially for components) were scattered in the 14 new nations. To compound the problem, Russian defense spending plunged more than 70 percent during the 1990s. Spending cuts were even higher in the new countries. Many of the Soviet era defense firms went out of business or, if they were lucky, managed to convert to non-military products.

Many of the surviving plants were outside Russia and, like the ones inside Russia, survived mostly on export sales. Russian leaders were not comfortable with Russian defense plants competing with former Soviet plants and sometimes depending on these same factories for components. So for over a decade the Russians have gradually established production of items that were being produced in former Soviet plants now outside Russia. This policy has not been popular with the new 14 states and Russia has tried to ease the pain by buying the old Soviet plants and moving some assets and personnel to Russia, where manufacturing was resumed.

The MAZ plants in Belorussia are currently producing wheeled transporters for many missile systems (rocket and missile launchers for artillery and anti-aircraft weapons as well as mobile ICBMs). New contracts for these transporters are being given to Russian firms.





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