REUTOV, Moscow Region. March 4 (Interfax-AVN) - It is the enterprises, not governmental authorities that should come out with initiatives to form mergers, thinks Valery Kulakov, deputy director general for corporate structures of the Reutov-based Machine Building Research and Production Enterprise.
"Our idea to from a larger enterprise has simple explanation: if we do not build a large corporate structure on our own, we will either become a base for another corporation at the best or will be devoured by a larger company," Kulakov told Interfax-Military News Agency on Friday.
According to him, the practice of forming holding companies on decisions of governmental authorities without taking into account the interests of enterprises quite often results in an unfair redistribution of sales markets and the state defense budget.
"The defense industry is excessive and the only reason why administrative bodies are trying to merge smaller structures is their bid to get a larger piece of the state defense budget pie or force competitors out of the military and technical cooperation market," he said.
The forming of large corporations within the defense industry should not be the main objective, Kulakov noted.
"Mergers are effective, but there is the other side of the medal, " he said.
According to him, large corporate structures will not be able to survive without effective governmental support.
"Defense industry enterprises have no power to compete with one another now, as they have to fight for survival against commercial enterprises, including gas-suppliers and financial companies," Kulakov said.
The Reutov research and production enterprise has been forming a corporation of enterprises involved into missile and rocket technologies since 2003.
The corporation will be mostly aimed at production of cruise missile systems, strategic missile systems and launch vehicles, as well as integrated space data systems, IT and dual use systems and equipment.