Alexander Vatagin, Klimov - ОАО "Климов"
Release Date: 2008-10-17
KLIMOV has been reorganized from top to bottom since your arrival and that of your new management team in 2004. Has the company’s philosophy fundamentally changed with those management and structural changes you implemented?The philosophy did not change - it appeared. Unfortunately, the previous team did not develop a strategy and the enterprise had no formal vision of the business by the time we came. Now, both the vision and the strategy of achieving our goals are available for everyone on our website. We realize how high the mountain is, how we should climb it and how much time it takes.
What new strategies has the new management applied to successfully turn the company upside down in such a short period of time?
I would rather speak about regular management methods, as the Western world understands it. Everything is described in classical literature on management but it had not been applied before, unfortunately. I mean segmentation, positioning, SWOT analysis, the 4Ps, BSC. In terms of strategy we are typical guerillas. As there was no strong position by the time we came, we decided to concentrate on the two key competencies. We narrowed the front line and threw away all products that we considered superfluous (for example, power units); we entered foreign markets and increased our profit from the 2 main products considerably. We decreased our personnel by 20% and the remaining employees got the maximum possible salary on the Russian market.
What are your development plans for the next 5 years?
We are currently restructuring the production - this is our focus. We are constructing a modern plant and eliminating outdated capacities and spaces. We should comply with modern requirements not only in terms of construction but also in terms of producing engines of next generations.
What would you name as your most celebrated/successful products nowadays?
The most successful and reliable engines by Klimov are RD-33, TV7-117 and their modifications. No doubt, for the next 5-7 years we are confident in the future of the RD-93 engine for the Chinese aircraft Super-7. TV7-117 in both aircraft and helicopter modification also has good prospects.
In 2007 Klimov JSC introduced to the world its VK-800 helicopter turbo-shaft engine, which is the first totally Russian engine after the break-up of the USSR. You have predicted the demand for the VK-800 – to be certified next year - to make up no less than 2,500 items by 2016. Given the current context of high oil prices and environmental concerns, how does VK-800 distinguish itself from the previous Russian engines?
VK-800V is the first engine developed from a scratch from the axis line on the post-Soviet territory. The demand for this engine till 2026 will be on the level of 3,600 items - about 15% of the capacity of the world engine market in this category. Hi-tech characteristics of VK-800 are ensured by optimal choice of thermal and dynamic parameters and comply with the modern requirements to engines of this type. Unique features of the product consist in the application of a single-stage high-pressure turbocompressor and an uncooled turbine. The engine has a simple and relatively cheap but reliable construction. Modern design technologies and new methods of work organization were applied for its creation. The approach to developing the engine was practical: the applied construction solutions allow a 10% reduction of the servicing costs.
Which Russian and foreign companies have shown an interest in the VK-800 helicopter turbo-shaft engine so far?
In Russia VK-800V is positioned as a power unit for the new helicopters by Helicopter Plant named after M.L.Mil. In June, 2007 VK-800 debuted on the International Aviation Show Le Bourget and attracted the interest of the representatives of foreign helicopter companies. Later, during Aviation Expo China 2007, Chinese partners showed their interest towards the Klimov engine. VK-800 can be used in a power unit for the high-potential Chinese multipurpose helicopter.
If the predictions of demand are correct, it means a considerable output for your company. How would this impact the current industrial production and investments of KLIMOV?
Concerning the impact on production level, wide outsourcing can help increase the efficiency of operation and reduce production costs of the product, preserve and develop scientific and technical basis of JSC Klimov. No doubt, it will require additional investments to create a modern scientific and technical infrastructure of aviation industry in St-Petersburg.
Klimov-branded engines are operated in over 80 countries of the world, which makes it imperative to have a state-of-the-art after sales and maintenance service, but Russian companies used to have a poor reputation in this area… How would you contest that view? How do you guarantee the best service to your clients nowadays?
Indeed, before Russian aviation engine manufacturers could not offer service support of due quality to their foreign partners. We, as the developer, aim at ensuring flight safety and that is impossible without servicing. We are in the beginnings of this new approach s but we are getting closer to success in this regard. Besides, lack of proper servicing would keep us away from equal competition with the leading world developers and manufacturers. In the course of operating such complex equipment - aviation engines - operators often face non-conventional problems and only the developer can solve them quickly and efficiently. We plan to implement servicing and repair of power units together with the operated machine. Engineering centres will be located all over the world in order to save time and costs. This will allow not only increase the quality of aviation equipment but also introduce quick and low-cost servicing.
JSC Klimov is one of the oldest Russian partners of the People's Republic of China. The relationship between them goes back 50 years. In fact, a year ago, during the 23rd Aviation Expo China 2007, Klimov signed a number of contracts with Chinese companies for more than $12 mln. However, this year Klimov has taken the strategic decision not to participate in the Zhuhai AirShow next November.
Why has Klimov decided to not go to Zhuhai this year, for the first time?
We are currently developing a new concept of our exhibition activity. This policy is the result of the integration processes in aviation. Assets of JSC Klimov will soon enter Oboronprom. As we are going to be part of the United Engine Construction Corporation (UECC), our advertising and exhibition activity requires a new concept. Currently we are developing the plan of further participation of JSC Klimov in the world exhibitions.
What has changed in the relationship with China?
PRC and JSC Klimov are long-term partners. We hope that after our integration in the UECC our cooperation with China will reach a new level and become more efficient, intensive and prospective. We are negotiating engine servicing with some Chinese enterprises for engines developed by JSC Klimov and operated in China. “CATIC” remains our key partner in China.
What would be your final message to the readers of the www.RussianAvia.net trade portal?
There is no doubt that both Russian and Chinese aviation have a bright future. If we join our efforts in this sphere, we will be second-to-none in the whole world.
| Company: | Klimov - ОАО "Климов" |
| Position: | General Director |
| Country: | Russian Federation |