Russia’s fixed-wing aircraft sector now effectively comprises the United Aircraft Corporation (UAC), and in the helicopter sector Oboronprom is UAC’s equivalent. In contrast, Russia’s missile industry is comprised of two giant dedicated firms focused on tactical military applications.
Firstly, Almaz-Antey, as its initials appropriately suggest, focuses on anti-aircraft missile systems. Its flagship products are the S400 Triumf and the S300PMU series. Formed in 2002 through the merger of NPO Almaz and the Antey Concern, Almaz-Antey has since absorbed several smaller players in the missile sector.
Secondly, NPO Mashinostroyeniye (NPOMash) focuses on offensive tactical missiles, although it also builds the Tor M1 anti-aircraft missile system. NPOMash’s most visible undertaking is its joint venture with India’s Defence Research and Development Organisation to build the BrahMos antiship cruise missile. Like Almaz-Antey, NPOMash aggregated several smaller missile companies in 2005 and 2006.
In addition, other related companies participate in various niches of the military missile segment. In the strategic nuclear missile segment, entities such as the Moscow Institute of Thermal Technology, which builds the Topol-M ICBM, cross over into tactical niches such as anti-submarine missile development. At the other end of the spectrum, the KBP Instrument Design Bureau, which began as a gun and ammunition developer early in the Soviet era, produces a wide variety of anti-tank missiles. Lastly, in addition to building helicopters, Oboronprom upgrades Pechora (SA-3 Goa) missiles and produces components for the S300.
In light of the aviation consolidations, the current industrial organisation of the missile segment seems especially counterintuitive because missiles are much more heavily tilted toward military applications than aircraft and helicopters are, both of which have substantial commercial markets.
The commercial market for large space launchers is booming but the distinctions between civilian and military ballistic missiles are, in principle, less significant than those between civilian and military aircraft. In particular, aircraft engaged in direct fire tasks (e.g. strike fighters) have no civilian equivalent and even transport aircraft vary along more dimensions than heavy-launch missiles.
This fundamental difference would seem to argue for more decentralisation in aircraft and less in missiles – the exact opposite of Russia’s current aerospace industrial organisation. So, are there any viable explanations for this seemingly confusing stance?
One possibility is that Russia has not yet got around to centralising the missile industry. But contradicting this option is the fact that Almaz and Antey merged at the same time as Oboronprom was formed, four years before UAC crystallised.
Moreover, statements from officials within Russia’s space industry indicate that the continued missile decentralisation is no accident. In 2005, the head of Russia’s Federal Space Agency, Anatoly Perminov, explicitly argued against centralisation. “One should remember that any kind of super monopoly is a bad thing,” stated Perminov, who asserted that, “if the state customer has no choice, the stagnation and extinction of complete design schools [would result].” This argument easily extends to the military segment as well.
So an alternative possibility, and one which is more in line with Perminov’s observations, is that Russia is pursuing monopolistic specialisation while attempting to maintain the potential for cross-niche competition in the military missile segment.
Conceptually, the military missile arena lends itself to such specialisation. Unlike airplanes and helicopters, which are reusable platforms or vehicles, missiles are one-way weapons that are launched from these platforms. Furthermore, missiles can be carried by land, sea and aviation platforms, and can attack all three types of platforms (not to mention other missiles).
Already, this 3×3 matrix categorisation yields nine niches. Throw in other dimensions such as range or warhead type and the missile segment can, at least in theory, easily support a plethora of specialisations.
This leads to a final possibility: Russia’s embrace, or at least tolerance, of multi-company competition in missiles reflects an underlying doctrinal shift from the primacy of platforms to the primacy of weapons. For most of last century, weapons developers focused on making platforms ‘smarter’ with electronics technologies while munitions stayed relatively dumb because the state-of-the-art products were not advanced enough.
But now technology enables terminal kinetic munitions. In other words, everything that physically disintegrates on contact with the target can be just as perceptive, responsive and adaptive as the platform that launched it, and, munitions are a lot cheaper than platforms.
This technological megatrend plays into some traditional Russian military preferences. In naval combat, for example, Russian doctrine has always emphasised long-range missile attacks, regardless of platform. If C3ISR and missile technology now facilitates that concept, Russia’s industrial organisation of the military missile industry may simply be a case of going with the technological flow.