chapter  9
19 Pages

A Case Study of Russian Defense Conversion and Employee Ownership: The Saratov Aviation Plant

WithJohn A. Battilega

This chapter discusses the experiences of the Saratov Aviation Plant in its transition from a state-owned plant producing 55 percent defense products to an employee-owned joint-stock company using, in 1992, about 6 percent of production capacity for the defense industry. It reviews the history of the plant, and then discusses the sequence of events and activities which led from early privatization under special conditions granted by the Soviet government to full incorporation as a closed joint-stock company. The chapter considers the role played in this process by Western assistance. It identifies several issues and obstacles experienced by the Saratov Aviation Plant that will probably also surface in all Russian enterprises undergoing similar transformations. The Saratov Aviation Plant currently employs approximately 13,000 workers and occupies about four million square feet of production space. During the privatization of the Saratov Aviation Plant, several important issues and some obstacles surfaced.