Prime Minister Vladimir Putin visits Ural plants.
On November 18, Prime Minister Vladimir Putin arrived in the Sverdlovsk Region of the Urals. There a helicopter flew him to several industrial plants spread across three local cities. Andrei Kolesnikov, special correspondent of Kommersant, who accompanied Putin to the titanium smelter VSMPO Avisma, reports that the "Titanium Valley" project the prime minister announced thus far remains a "Titanium Depression."
The prime minister arrived in Yekaterinburg in the early hours of November 18 and was scheduled to visit three local industrial facilities – Avisma in Verkhnyaya Salda, the New Pipe Plant in Pervouralsk and the Ural Locomotives plant in Verkhnyaya Pyshma.
The pipe plant, owned by the Chelyabinsk Pipe Rolling Plant (ChelPipe) Group, had prepared for Putin's visit in advance, much as they had at another ChelPipe unit that the prime minister visited. Italian designers had been hired to paint its production floors in vigorous hues and decorate its smelting shops with potted eucalyptuses. Stylish leather armchairs adorned the control room.
Several hectares of garden soil had been delivered to the Urals from the Moscow Region, as well as 150 metric tons of Norwegian paint, with which designers covered every surface as best they could. "They have painted it in the style of Malevich," said Sergei Rybak, one of the group's senior executives. They bought smart overalls for workers at $2,000 apiece, Rybak added, with the Russian tricolor embroidered on each.
"This is especially important," Rybak said, "because our manager is American."
At Avisma, which was the first plant Putin visited, there were no decorations at all. However, the walls of the plant's gloomy rooms, which must dream at night of modernisation, have been plastered with posters urging workers to redouble their efforts.
"Losses are actions that increase production costs and do not add any value to the product," one of the posters warns. "Losses are inevitable in any process. But identifying and eliminating losses yields two important benefits: first, your work becomes more rewarding! Second, you no longer have to spend hours looking for your tools, negotiating your way across piles of rubbish, or performing actions that add no value to your product!" another one reads. (This last statement is probably precedent-based, like British law – A.K.)
Putin examined the plant's smelting and forging shops. The plant claims it has the world's most powerful forging press – something "even the Chinese can't build."
He then visited the workshop of Ural Boeing Manufacturing (UBM), a parity venture between Boeing and Avisma established in July 2009, which has finally begun production. This workshop makes titanium casts for the Boeing 787 Dreamliner.
Interestingly, the titanium blank used to forge the Dreamliner's wing ribs weighs 1,185 kilos when it leaves the plant; but after further processing at Boeing facilities in Seattle and Japan, it drops to a graceful 98 kilos before it is attached to the aircraft.
At UBM, the blank is made into a 360 kilo component; however, nobody ever explained to me where the remaining titanium (nearly 300 kg of a highly expensive material) ends up.
Putin told workers at the plant that within the next two weeks, he will sign an order to establish a free economic zone, the "Titanium Valley," in Verkhnyaya Salda. But at this stage, the place looks more like a "Titanium Depression."
According to the prime minister, local companies will enjoy tax breaks and financial support: $700 million has already been invested in Avisma, he said, and more will follow as soon as agreements are reached with investors and partners. He probably means Rolls-Royce, which plans to move to Verkhnyaya Salda, where it will also most likely die.
It appeared, however, that workers were interested in other things than the potential advantages of eliminating losses or adding value to their products.
One of the workers asked how soon a stadium would be built. "We do a lot of sports," he said, hastily adding: "The construction is taking too long. They promised to commission it long ago, but haven't completed it yet."
"Really?!" the prime minister asked, sounding genuinely surprised. "But I saw it as we were driving by! I asked if it works, and they told me that it certainly does!"
An uneasy silence followed. The workers did not want their governor and plant officials to lose face. All of them planned to continue working there; perhaps some of them won't after this little gaffe.
"When will it be completed?" Putin asked the group of officials who were standing firmly and confidently at his side as he talked to the workers.
"In March," one of the plant executives answered just as confidently as earlier that morning he said that it had been operational.
Afterwards, Putin moved on to Pervouralsk, leaving both Avisma officials and workers in a state of relief. There, he took part in unveiling a new electric furnace.
Perhaps already inured to such stunts, the prime minister paid little attention to the potted eucalyptuses and got straight down to business. He stationed himself at the furnace controls and confidently moved the electrode into the furnace using a joystick. It shot into the furnace with a deafening crack.
The control room is separated from the furnace by a thick panel of glass, so we could watch as people wearing silver overalls ($2,000 apiece, remember?) bustled about like astronauts from a 1970s science fiction film. One of them wandered somewhat distractedly into the control room. The man, clad in silvery overalls, a helmet, and gloves, walked slowly and bashfully into the control room. He must have been sent to report that the smelting process was safely underway, but Putin didn't even notice him.
Meanwhile, Andrei Komarov, one of the plant's main shareholders, said that the $10 billion loan the pipe industry received with government guarantees has brought the industry back to life and that the $2 billion given to ChelPipe alone has virtually launched it into the stratosphere of new development.
The group plans to hire several thousand young professionals and build housing for them under a new programme: each family will begin paying its low-interest mortgage after a five-year grace period, during which they will pay only their housing and utilities bills.
Putin, who showed some enthusiasm for the plan, kept a focused hold on the control room joystick. He said that they should begin building now and next year the government will issue new guarantees. From the looks of things, they will probably have to rely upon Putin's personal guarantee for the time being.
