Delayed Restructuring Through Gradual Global Integration in Aviation and Space Industry in the Ukraine

Abstract

The Ukraine inherited a large part of the former Soviet aviation and space complex. One of the seven bureaux of the former USSR responsible for civilian aircraft development has been located in the country. 131 The Ukrainian aviation industry currently comprises of more than 50 enterprises, including a number of subsidiaries of Russian companies. Two of them have critically been important for the restructuring of the industry: the Antonov aviation complex in Kiev and the MotorSich engine factory in Zaporozhie. As the Ukrainian aviation industry was in 1989 employing more than 150 thousand workers and engineers, by the end of 2001 the overall number of employees had decreased by more than 60 percent. 132 The industry has not been formed as a separate entity from the very beginning, but only as a part of the aviation industry of the former Soviet Union. This means that the level of co-operation in technology and production was exceptionally high. Barriers to entry in the aviation market were very high, and corresponding technical capabilities could be built only during relatively long periods of time. 133 The aviation industry in the former Soviet Union was part of the military-industrial complex, which had a well-developed system of subsidiaries with quality control as the key issue in the production process. 134 At the time when 80 to 90 percent of the aviation and space industries were still deployed in Russia, other former Soviet republics had to rely heavily on supplies from Russian factories to produce airplanes. 135 There was no special metallurgy for the aviation industry in Ukraine; 85 percent of the equipment was produced in enterprises situated in Russia. However, the Ukraine had a special place in the former Soviet aviation and space complex mainly due to the production of engines for several types of Soviet planes in Zaporozhie and due to the Antonov aviation complex, that designed famous cargo and medium-sized passenger planes with the AN trademark. Currently about 18-20