Rostec to unite UAC, Sukhoi and MiG into a single aircraft construction corporate center.

Rostec Corporation said it would unite the UAC, Sukhoi and MiG Companies into a single aircraft construction corporate center in order to consolidate control of aircraft programs and other UAC assets.

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The corporate center of aircraft construction, which is to unite the Sukhoi and MiG, will consolidate control of aircraft programs and will be the managing organization for the Tupolev, Ilyushin and Irkut Companies. The reform will be implemented by stages during several years (Picture source: Tass)

The engineering and design functions will be accumulated in a separate center located in Moscow. It will unite all design bureaus, Rostec CEO Sergey Chemezov said at a meeting with the UAC and leading engineering centers.

The reform has to increase UAC economic sustainability, optimize management, and decrease costs and debts.

Designers and engineers will not be reduced. The design schools will remain independent, receive new development capabilities and improve labor conditions in the framework of the single engineering design center. It will be located in Moscow, as UAC test benches are accumulated there. The transition of design bureaus to other regions is not on the agenda.

“We are forming in Moscow a single managing organization and a single center of design competences for all UAC companies. The systemic reform has to improve the structure of the company and promote its financial sustainability, increase competitiveness of domestic aircraft and satisfy Russian needs in modern civilian aircraft for passenger transportation. As the task is important, I decided to personally control the reform and head the UAC board of directors,” Chemezov said.

The corporate center of aircraft construction, which is to unite the Sukhoi and MiG, will consolidate control of aircraft programs and will be the managing organization for the Tupolev, Ilyushin and Irkut Companies. The reform will be implemented by stages during several years. It is yet necessary to discuss all the key changes with designers, directors of aircraft programs, and production facilities.

“The structural transformations and optimization of costs, the transformation of the industrial model and the design cluster, and digital UAC transformation aim at providing load to production facilities and increasing labor productivity. The total effect of transformations has to save 130 billion rubles,” UAC CEO Yuri Slyusar said.

Chemezov earlier said Rostec planned to restructure UAC debts and increase its capitalization in the first quarter of 2021. UAC debts worth 400 billion rubles will be restructured and repaid. Rostec will receive budget money to add to the UAC capital. It will repay credits and restructure remaining debts. UAC debts comprised close to 500 billion rubles when it joined Rostec.

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