The crisis does not lie. The flawless business model fashioned by UralVagonZavod leaders early in President Vladimir Putin's third presidential term is falling apart before our eyes. That model is uncomplicated and effective: rank and file workers constantly demonstrate unlimited love for their national leader in exchange for ever larger state contracts for whatever nonsense will pay the bills.
It all began during Putin's live call-in show during his presidential campaign in late 2011. Workers from the monopolistic tank manufacturer UralVagonZavod received an unprecedented three opportunities to speak on the air.
The idea behind their speeches was very simple: "O great Father and Tsar, we will stand by you through fire and water. We are ready to come to Moscow and personally beat back those damned protestors. And all we ask in return is that you order Defense Minister Anatoly Serdyukov to purchase our tanks."
That business plan quickly produced outstanding results. The mastermind behind it was probably Yevgeny Shkolov, who reportedly served in the KGB station in Dresden with then lieutenant colonel Vladimir Putin, and who later cashed in on that friendship by heading UralVagonZavod.
The Defense Ministry responded with an announcement that it saw no need to buy new armored vehicles. It argued that the armed forces already had an excess of tanks and that the greatly modernized T-72 tanks could easily handle combat missions in the former Soviet republics.
The Defense Ministry did not want to buy the T-90 tanks as UralVagonZavod leaders were insisting because it represented, in the words of one senior military official, merely the 17th upgrade of the T-72. But a miracle occurred: two weeks after the call-in show, Putin published an article promising that, if re-elected, he would order 2,300 tanks over the next 10 years.
UralVagonZavod employees were euphoric at this evidence of how their beloved Vladimir Vladmirovich Putin took care of the common man. After all, the cost of producing a new tank is significantly higher than the price of upgrading an old one.
That was when it first dawned on me that the government's 20 trillion ruble ($325 billion) plan for modernizing the military was not intended to provide the armed forces with enough modern tanks and aircraft, but to buy the votes of Putin's core electorate.
However, it would have looked bad to pay so much money for the new T-90 tanks. Therefore, factory workers dutifully announced that plans were in full swing for a fundamentally new combat vehicle called the Armata. And for the next three years the factory issued glowing reports of how they were making great strides and that the joyous moment was approaching when this tank — with no peer anywhere in world — would go into mass production. They announced that the new tanks would make their first showing at the upcoming Victory Day parade in Moscow.
At the same time, UralVagonZavod was careful to follow its business strategy, and at the recent "Anti-Maidan" rally in Moscow, its workers called out from the stage: "The opposition has dried up. Three years ago we were ready to come here in tanks to defend Russia. Now a few tough workingman's words are enough stop all those lousy Navalny supporters."
But it seems such sycophantic pronouncements will soon come to an end because no mass production of the tanks is planned. In an interview with Moskovsky Komsomolets newspaper, Deputy Defense Minister Yury Borisov lamented: "We miscalculated on the Armata … The money allocated for that project turned out to be too little to produce the necessary quantity."
Amazingly, Borisov then voiced exactly the same conclusion that former Defense Minister Anatoly Serdyukov and his superior, former Chief of the General Staff Nikolai Makarov, had reached five years earlier. "We discovered that we can spend less money to reach the same goal," Borisov said.
"Today we can say that the T-72 tank — thanks to its new onboard equipment, gunner sights, guidance systems, ammunition and active and passive defense capabilities — has a far greater combat effectiveness than previous models. Accordingly, that brings up the principle of 'reasonable sufficiency,'" he said. As for the Armata, he said, "we have no need to rush forward with that project today."
I once wrote that patriotism is the last refuge of the slacker. As evidence, consider that, according to Borisov, the Armata ended up costing two and a half times more than planned. That was the premium UralVagonZavod workers thought they could charge in return for their vow to take on the opposition.
Now, UralVagonZavod specialized machinery director Vyacheslav Khalitov has announced that the factory will produce only two dozen or so new tanks. They will make an appearance in the Victory Day parade in Moscow on May 9 and then return to the factory to complete production by year's end.
Thus, the Russian people will see semi-finished tanks fit only for a parade, but that are many months away from any serious use. And even then the tanks will spend three years undergoing operational testing in the military, with mass production slated to begin in 2018 — right in time to impress voters and help re-elect Putin to his fourth presidential term.
In any case, UralVagonZavod will not see any big money until that happens. And this comes at a time when Russian Railways — headed by Vladimir Yakunin who, as a close friend of Putin, the factory cannot even hope to pressure — has stopped ordering new train wagons, the factory's primary source of income.
As a result, many workers have already been given leave and there is talk of instituting a shortened work week. The same fate might even await the tank production units. Thus, UralVagonZavod workers might feel an urge to direct their "tough workingman's words" somewhere other than the opposition.