Russian President Vladimir Putin has formally ordered the creation of United Rocket and Space Corp. in a bid to reduce costs in the industry by rolling scores of space hardware developers and manufacturers into a single company.
The corporation will include 43 currently separate companies, including the country’s major prime contractors Khrunichev Space Center, RSC Energia, TsSKB Progress and Lavochkin, according to a Dec. 2 decree signed by Putin and posted on a government website.
The decree said one of the priorities for the corporation would be to consolidate and streamline the purchasing of foreign electronic components. Deputy Prime Minister Dmitry Rogozin said earlier that the larger company would have the purchasing power to negotiate better volume-based discounts than the companies could get on their own.
The enlargement will also allow the industry to eliminate excess manufacturing capacity at a time when some of the firms to come under the United Rocket and Space Corp. umbrella are operating at 40 percent of capacity and thus find it hard to make payroll, Rogozin said.
Igor Komarov, the former chief executive of Russia’s largest car maker, AvtoVAZ, is expected to take the helm at the corporation when it takes shape. Komarov left his position at the automobile producer in November to become a deputy director-general at Roscosmos, the Russian space agency.