Interview with the CEO of "Izhmash" Maxime Kuzyuk
Recently, the Russian company "Izhmash" has completed the main phase of the reorganization, while receiving an operating profit. In preparation for the full completion of the restructuring, "Izhmash" is engaged and the creation of new weapons. What is the new machine "Izhmash" and what needed reorganization of the group, in an interview with "Lente.ru" the company said CEO Maxim Kuzyuk.
"Lenta.ru,": To begin, perhaps, with the everyday concerns: with defense contracts. There have been difficulties in 2011, and in that sort of outlines. How now, "Izhmash" situation with state defense order?
Maxim Kuzyuk: This is a difficult problem that exists at the level of the whole country. A lot of companies are hostages of the situation in which was the "Izhmash". To date, we have entered into contracts only a small part of what was planned and scheduled for this year. This is despite the fact that the SDO today occupies only a small fraction of total output, and the orders directly to the Ministry of Defense of Russian state defense order is generally minimal. Thus "Izhmash" works more closely and productively with other security agencies — the Interior Ministry, the FSB …
In this situation a few reasons, including the large stocks in the warehouses of the Ministry of Defense of Kalashnikov rifles — an AK-74. To use these resources more effectively, "Izhmash" is considering various options for upgrading the AK-74, which will satisfy the requirements of the Ministry of Defense in a constructive manner, and from a position of economic efficiency.
The second part of the question due to the fact that even under those orders available with us is a permanent job with the Ministry of Defence for pricing. This is a known problem in the industry. On the one hand, I understand the Ministry of Defense goals: reduce costs, make more efficient procurement, to get away from the fact that prices are "inflated". Accordingly, the Ministry of Defence puts a very correct the problem, on the one hand. On the other — our system that existed before, did not stimulate efficiency in enterprises, because the task was — to legalize the production cost. That is, it, including, and could "swell". Pricing came from the cost, and the ability of the Ministry of Defense is really deeply understand the details of the pricing was not so high.
Therefore the department has chosen a simple way: typed professionals who undertake compare different prices on different technologies and just cut costs. Probably, this tool is effective in some cases, but in this case it leads to the fact that we can not produce lower our production costs, operate at a loss. Enterprises and so complicated situation. And just for the prestige of the state defense order not to have any meaning.
And any specific orders in the state defense order is received? Weapons, manufacture or disposal?
We are carrying out orders for the study of law enforcement agencies, an open competition in which we plan to make deliveries. The contract for the disposal we have not concluded. This is due precisely to the fact that the requirements imposed, including the licensing system, the supervisory authorities to conduct this process, do not let us do it at economic level, those prices offered by the Ministry of Defense. We are now negotiating. The situation is that we have some recycling technologies. In one technology is more cost one article and another — is less than, and the other — opposite. "Tsenoviki" the Defense Ministry took and cut everything and say that we have to meet these limits.
Unfortunately, this is not possible, because we are technologically more costs on one article in one technology, and the other — on the other. This leads to the fact that the prices that are offered to us, we simply can not fit. I very much hope that there will be a constructive dialogue. As, for example, in the Ministry of Defence has a technical department, where very competent people work, with whom we have a mutual understanding of what to do.
And what exactly is ordered law enforcement agencies?
They order, including AK "hundredth series." I can not disclose what specific model, but that AK "hundredth series." There are orders in our submachine gun "Vityaz" and sniper rifles.
A "two-hundredth" series?
"Two Hundred Series" does not exist. It never existed, it was created as a project. It was not even firing pattern, but just a look. Unfortunately, most automatic "two hundredth series" was not. When we Vladimir Zlobin (chief designer of "Izhmash" — note "Heathcliff") began to look at what is in "Izhmash" what operating time, I said, "Let us see what the ‘two-hundredth series.’" Began to understand — it turned out, except for one dummy, nothing was done. Perhaps the idea is, of course, were, but as such, "the two hundredth series" was not.
That is why the new model, we even changed the name because the AK-12 — a fundamentally different machine to the other is constructive, other features. For this model, made a number of improvements. AK-12 — it is a real sample from which we shoot, including shooting members of security agencies. They shoot machine on our test station, said his wishes are expressed, what can be improved. I note that the AK-12 from the representatives of special forces, we have received very positive reviews.
A Ministry of Defence to "feel"?
Shows are scheduled for guidance and testing as part of the now re-established an interagency working group that created by the MIC on the instructions of Deputy Prime Minister Dmitry Rogozin ("laboratory", as he calls it). In late May, planned for demonstration firings of the Ministry of Defence.
You said that the AK-12 — the fifth generation of this machine. And since when is counting?
The offset is the AK-47, which was adopted in 1947 on weapons manufactured since 1949. Next was a series of AKM, then came the AK-74 — it was the third generation, fourth generation — is the AK-74M and the "hundredth" series, which are very close.
That is — the constant modernization. And why was elected as the path to save the classical scheme and the Kalashnikov AK-12?
There are two reasons. First — this is the reliability requirements of the Ministry of Defense weapons, stable operation after the attacks, the fall, the opportunities to exploit the humidity, dirt, dust and so on. Kalashnikov system — this is the most reliable scheme. Most modern weapons manufacturers in various forms of execution is transferred to the scheme, including FN Herstal, Heckler & Koch.
The second reason — it is a necessity to create a new weapon in the price range, close to the cost of already existing models Kalashnikov assault rifle, and is as easy to use. This is important because for mass production to meet the needs of the army, we have to work out the product not only in terms of tactical and technical characteristics, but also the cost. One reason, for example, why AN-94 did not mass — it cost five times more AA, including in production times and was difficult to handle and maintain.
Reliability and dependability — is the main competitive advantage of Kalashnikov assault rifles. Western manufacturers that use a similar scheme, the best proof of this. Therefore, leaving the general principle of the work we carried out its deep modernization. Revised the locking mechanism, automation, trigger mechanism to reduce the impact and reduce the recoil shoulder. The reliability of the Kalashnikov assault rifle was provided, inter alia, d
ue to the large mass of the moving parts and large gaps. We are going to ensure that with the help of modern technology surface treatment to reduce the mass and velocity of the moving parts, reduce returns, while preserving the reliability of the former. To reduce the "throw up" and developed a more efficient muzzle brake compensator.
When designed the AK-74, battle tactics were such that a fighter hiding their weapons. So they (the developers of the machine — "Lenta.ru,") reduced the level of the stop arm and raised the weapon above. Now for the special forces are much more important than another — the first to detect a target and hit it. That is war, "wall to wall" will not. Now she is a tactical, hidden, and you just need to be able to identify and hit the target first.
So we changed the recoil shoulder, also reduces these throws. That is, even when striking is the progressive movement rather than throw. In general, this allows us to change the specifications, even using the classic scheme of a Kalashnikov.
By reducing the speed of movement of the bolt has not decreased rate?
No. Moreover, our machine, let’s say, some version of it will be for the special forces dvuhtempovymi: at the same speed, which is now shooting a Kalashnikov — about 600 rounds per minute, and at higher speeds.
Plus, there appeared cutoff.
Yes. This is dictated by the requirements of customers — we supply in some countries "hundredth series of" cut-off, and the Department of Defense indicates this option in their demands. Why is this done? To the less experienced fighter was able to more economical use of ammunition, firing short bursts.
A "two-handed" weapons, which is so much talked about?
Wrote about the "one-armed", and in fact does have the ability to control and left and right hands. Removing the safety, fire management regimes, the release of the store, shutter setting — all this can be done with the left and right sides. We are currently working with special forces — they keep the gun with his right hand, and they need a platoon of the left, and we had the opposite — all for the right hand, then there is need another hand to hold during the platoon.
Now all that is changing, we do so with the fighter could choose as it is more convenient. Some right-handed cock the left, and such a possibility. Including one unit of the request to the platoon was both right and left. And we can implement in the AK-12.
That is, the platoon commander’s handle is simply moved from one side to the other?
It can both move left and right, and simply be mounted on two sides.
What’s wrong with Picatinny rail?
This is just one of the problems that existed in the previous series. Even in some of the older versions have installed Picatinny rail, but the issue is that the cover on the Kalashnikov assault rifle designed removable. She never called for the installation of sighting devices. In the AK-74M was provided lateral strip, which is installed optional equipment. Problems with few side bar. First, not all devices can be installed. Second, when removing and installing them must re-targeting. Picatinny rail at the moment can not shoot the sights. Therefore, we have chosen to create a platform on which integrated Picatinny rail, it is secure and stable, not to engage in zeroing and effectively hit a target at long range.
That is, roughly speaking, the cover has been reduced?
We left cover, but it is fixed to the front and rear parts so that there is no backlash. Also changed the very rigidity of the lid. That is the very design of the cover is changed, it is rigid and well-fixed at two points, respectively, it has no leash or when shooting or when the temperature changes.
A weapon accuracy increased somehow?
Yes, and the accuracy and precision of a single lamp are increased by the fact that we are developing a new barrel, which varies manufacturing accuracy of the barrel as well. We are developing a new version, in general, manufacturing, technology and design of the rifling. All this is now in the process of testing, and we just will select the best. We will go on several fronts to improve the precision and accuracy, and choose the best according to test results.
And all this is created under the existing cartridge?
Yes. Now the first problem — is to develop a machine under the existing cartridge. Why is this important? Because ammo for large warehouses. The transition to a new ballistic solution and a new cartridge is possible, but it will be a long process. However, we have plans to develop a new ballistic solution that will meet the current requirements, plus the use of technology is more accurate production of the cartridge.
One of the problems with accuracy — it’s not just the trunk, but it is itself the cartridge, which are important and the geometry of the sleeve, and precision manufacturing bullets, its balance, precision powder sample, the uniformity of burning gunpowder — that is, there are many questions that we plan to work through and resolve . So we need to be with the implementation of the decision and gunpowder manufacture, and production of shell casings and bullets to bring the production to the level of requirements that exist.
We have a version that shoots imported, foreign patron, they are, of course, the results of precision and accuracy is higher. For example, now, when we compare the AK "series of one-hundredth" under the NATO cartridge and foreign samples under the same cartridge, the results in terms of accuracy and accuracy are very close. But our task is, of course — to make better weapons. Therefore, it is we are going to decide.
Let’s Ministry of Defense is interested AK-12 and declare that they will buy. However, procurement is still not widespread initially, because you have to first put somewhere from stocks accumulated an AK-74. Here, apparently, it just goes on and modernization?
I think that it is about three directions at once. First — this is recycling what is already sub-standard and just fills warehouses Defense: so-called weapons of the fifth category, which we now recycle. Second — this is a good refinement of the new weapon, which does not make sense to recycle, but you can upgrade to a modern setting body kit. Our chief designer Vladimir Zlobin already reported on the meeting of the interdepartmental working group on what upgrade options exist. Modernization is cheaper than making new weapons, so now our designers are looking for a solution that would allow it the lowest cost to the Defense Ministry.
We are talking about installing Picatinny rail for mounting sights, tactical flashlight designator and other options. Changes cover, this cover for lever added Picatinny rail, forearm, is scheduled to make folding stock. For example, put the butt of an AK-12 — there is ergonomically designed with adjustable butt on the flight, tylnik changes in height and has the cheek: it is necessary in order to be able to quickly take aim, to attach to the butt.
And what are the major modifications will be based on the AK-12?
On the basis of the AK-12, we will be releasing a whole range of products: an assault rifle, shortened automatic submachine gun, a semi-automatic sniper rifle, machine gun, and of course, a whole range of civil versions of these weapons.
And how do you assess the prospects for our military market?
At the moment there is no alternative. We create advanced weapons, which, on the one hand, will meet all modern requirements, will be no worse than the most advanced modern counterparts, but will be significantly cheaper. And we can see that by creating a platform and a sufficient set of different products, including ergonomics, at a price we can satisfy the needs of our customers.
That is a chance to get to market high?
Of course. At the same time I know that there is a huge interest among our
regular customers overseas. Because the AK-12 — is what is now required for the conduct of modern warfare. If we release a series that will not be very different at the price of an AK-12 (and this is the main target), the potential is very large, and the export and the domestic market. However, we do not dwell on it. We now have in exploring a number of other weapons for special forces, including on the basis of other principles of automation.
There is, for example, a balanced automatics, which was designed to "Izhmash" in the 70s, but with a new look, with new solutions, including new technologies. We are also considering and working on the issue of using a biased momentum, which is implemented in the machine Nikonov. The only thing you need to realize there are a few things. The first — to improve manufacturability, the second — again, the opportunity to make the installation of modern equipment and ergonomics, and the third — to achieve results, the accuracy of a single lamp that was higher.
In 2010, the general director of the State Corporation "Russian Technologies" Chemezov met with Prime Minister Vladimir Putin and said that negotiations with the Beretta on the joint production "Izhmash". In this way there is any progress?
Negotiations are under way not only with the Beretta, and a number of other Western arms companies, which are now realized that our market is big enough. Also, now is a policy of localization. They know that they can lose this market or do not get, and there is great interest in a number of arms companies with which we conduct separate negotiations on the level of "Izhmash", and the level of Industry and Trade Ministry, but as long as a specific, well-defined plans and no partner is not selected. Although in principle such negotiations are underway, and I do not rule out the possibility of cooperation and localization of some Western products.
A main goal — to get the technology?
This is not something to aim. The goal — to reduce the period of production a completely new product, because Western manufacturers have products that is different from what we are doing. AK-12 is characterized by certain principles of manufacturing, technology and meets certain requirements. In the segment of very expensive weapons we do not have alternatives that cost would be very expensive and would have had some even better performance. However, it is possible.
In addition to the weapons companies, we are in talks with a number of accessory manufacturers who are also willing to take on the localization of production. We do not need to produce a large range of accessories. We are ready to work with our internal suppliers and external, to become the integrator and provide a turnkey solution for the complex, according to the system of destruction, so to speak.
But is not this scheme is risky, especially in the case of deterioration of relations with other countries?
This is why negotiations take time. It is necessary that had support at all levels, from the defense industry, Industry and Trade Ministry, the State Corporation "Russian Technologies". Only with the development of clear, understandable and transparent for all schemes, which will make this a mutually beneficial co-operation, it can be implemented. Of course, it is new. If we now have a similar experience in the automotive industry, the weapons that experience almost none.
Why do I ask this question in the case of "what if", would it not be interrupted, for example, the production of accessories or weapons in Russia?
Always, when it comes to working with a Western partner, especially from NATO, or attract a private investor or company to supply, there is a risk that they are finally realizing that this unpromising or commercially uninteresting market may go . No one will deny them. On the other hand, state-owned companies such as the "Izhmash" have an obligation to fulfill the state defense order, they are recognized as the sole supplier for a variety of nomenclature, and we can not deny. We can only negotiate the price with the Defense Ministry. In this regard, of course, the state needs to maintain a balance. You can not have only private companies, private equity or only foreign partners can not rely only on them.
Especially in the field of weapons we do things much better than, for example, in a car. We do have a backlog, there is a unique technology and unique solutions to which many countries are now only seek — seek to achieve this level of our western colleagues.
By selling shares of "Izhmash" which weapon is the most popular? Athletic machines for the military sniper?
If we talk about small arms, the relationship we have today — about 70 percent of civilian goods, 30 per cent — the military. Including this is due to the fact that large orders from the Ministry of Defence is not, and contracts for military-technical cooperation — irregular. The only permanent customer is MIA, as I said.
We are actively developing civilian direction, we have control, an understanding of how to develop this market, how to deal with the issue of promotion. We become more commercially oriented organization. Here, in the civil segment, we are popular as civilian version, built on a platform Kalashnikov — is "Saiga" and gun "Saiga" and civilian version of the sub-machine gun "Hero", the civil version of the Dragunov sniper rifle, shotgun "Tiger."
Unfortunately, on the basis of a sniper rifle SVD — carbine "Tiger" — we can not ship to the U.S., as there are limits to the level of an intergovernmental agreement, which I believe should be removed, it is at some point defended manufacturers in the United States. In this case, the consumer now pays for analogues of ten thousand dollars (similar to IRS in the U.S. costs ten thousand dollars), although we sell it much cheaper and can produce significantly more efficient. Dmitry Rogozin at a meeting instructed to work out the issue with the Foreign Ministry to remove these restrictions. Then we expand the market.
As for our civilian versions based on the Kalashnikov assault rifle, for example, a gun, "Saiga" — is generally unique weapons, is not unique. Because it is a feed store, semi-automatic based on the vapor is the tube that runs fast and very reliable. This is the most reliable weapon in its class and the fastest gun. That is why, for example, in practical shooting (it is a sport that was originally born as training special forces in the U.S.) in the class of guns, it’s the only weapon that is used by all teams in the world: Brazilians, Germans (there is even a German team "Saiga-12"), Ukraine, Russia …
Most of the athletes themselves TUNING our "Saiga", so we are currently developing a special version have already been refined to the requirements of athletes. We are working with the Federation of Practical Shooting in Russia to make such a version. A state corporation "Russian Technologies" support our team, that, in general, is now one of the tools for the promotion of our products.
In addition, we are a manufacturer of a biathlon rifle. In biathlon, there are only two global companies which produce such weapons: German Anschutz and the "Izhmash". Over the past years, we have lost ground, especially abroad, and even in our country for many collectors have switched to rifle Anschutz, because we have ceased to evolve and create the best. For a member of the national team no matter how much it costs, it is important to have the best. Anschutz is two times more expensive than our izhmashevskaya rifle, but they take away the best-best barrels made better ergonomics. However, they are still inferior to the one of the criteria — reliability, which is also very important.
During the competition, last year we lost an Olympic medal — at one of our athletes strik
er broke down on the rifle Anschutz. The man who we have engaged in the service, said that our rifles for 30 years, three firing pin broke. For the last 30 years! Anschutz — in the last three years, six or seven. This is a great indicator. We are now creating and developing a better rifle, it went to collections at her, she shot to reliably and accurately to the highest standards. I think we are at the beginning of next season will produce a whole batch and give our collections to the test.
If we talk about youth biathlon — that’s where we are in the lead, because for young people value for money is more important. For example, was the competition in Norway — 70 percent of the rifles were of the "Izhmash" or a version built on the "Izhmash". Why do I say "version" — because in the biathlon is now important that: first — a barrel and breech mechanism, a trigger, and then — the bed. Lodge for the collections is done individually, in separate workshops, so the rifle can look completely different.
Thus, taking into account the modified (other lodges) of our rifles was 70 percent. This is a good indicator. However, we hope that it will go from the young and the elderly. Why now, some of our collections are running around with Anschutz? Someone turned in their time — and all are used to. The same goes with the western athletes, for example, in Germany runs with our German rifle. She once tried, she liked it — now it runs with our product. But these, unfortunately, even less than our competitors with Western weapons. Our task — to make a better rifle, and in the middle segment, for young people, and so we are in the lead, we really only need to actively promote.
What is the share of exports of civilian weapons?
Almost half we export, with about 80 percent in the United States. U.S. — two-thirds of the world’s arms market, the most interesting market. In the past year we have focused on the U.S. market is to get the instant effect. And, in general, we will have achieved: in 2011, we have increased the supply in the United States by 50 percent, in 2012 we plan to increase by another 20 percent. Now for the first quarter, we already see that exceeded the plan.
Earlier it was reported that U.S. police have bought "Saiga" …
That’s right. They are not bought directly, and through our partner in the U.S., which is the process of finalizing. Unfortunately, we can not deliver the configuration you would like, there are also restrictions on what can be imported into the United States. So we supply a kind of hunter’s version, which is then finalized our partner: put the pistol grip, the other butt — this version is already in the supply of, and now it will not be shipped on the first delivery.
That is, the interest is there, the first test was a success, and it is connected with the quality of our "Saiga-12". This is a hunting rifle, the fastest, with a very comfortable replacement store. Moreover, we can put there a different cartridge. The first round will be a bullet, police use it to kick the door, that is, to break the lock. We have a special muzzle device, which can be simply to rest in the castle, shoot — and while no one gets hurt. And the next round will have either a shot or a buckshot — depending on the task: to reduce mortality or, on the contrary, increased.
It is possible to have different cartridges with different shops. In particular, we are currently working on a version that will work with non-lethal ammunition. What is the difficulty: non-lethal munitions have a very different energy. Accordingly, it is necessary to automation and worked at low and at higher energies. This is a more difficult task, because the need for special adjustments, but I hope we will find a solution. Non-lethal version is ready and now we are working hard to combine lethal and non-lethal version.
With Americans a large order?
It is big enough. It is in the thousands, but about specific numbers I can not talk, it’s a trade secret.