On September 1 meetings of Boards of Directors of UAC, Irkut Corporation and Sukhoi Civil Aircraft were held. A number of decisions of these governing bodies give a start to transformation of UAC, Irkut Corporation and Sukhoi Civil Aircraft into a new Corporate center of a single united company with functions of a Civil Aviation Division on the basis of Irkut Corporation. This is an important step within the corporate transformation program to form a single company in accordance with previous decisions of the UAC’s Board of Directors from December 2016.
All existing and perspective aviation programs remain on track in full as well as all contractual obligations. All employees including engineers and workers remain committed to creating competitive Russian aircraft.
In accordance with decisions taken UAC President Yury Slyusar while retaining his current post for the duration of transformation will become President of Irkut Corporation. Oleg Demchenko, who for many years successfully managed Irkut Corporation will become First Vice President – Chief Designer of Irkut Corporation.
In turn, Sukhoi Civil Aircraft will become the basis of a Center for marketing, sales and after sales support of all civil aircraft produced by UAC. Mr. Alexander Rubtsov is appointed President of SCAC to realize this function. Due to consequent concentration of civil aircraft development and manufacturing functions by the UAC Corporate center Vladislav Masalov will effectively from September 1 no longer be President of SCAC assuming a new job.
Corporate transformations are aimed to realize UAC’s strategic goal to increase the share of civil products in its portfolio to 45% by 2035 and to drive annual civil aircraft production to 100-120 aircraft per year, as well as to increase UAC’s economic effectiveness and lower costs by centralizing supporting processes and decreasing levels of management.
The transformation will allow to concentrate resources to develop, manufacture and market Russian civil aircraft, it will also ensure consistency in these areas and simplify certification and licensing procedures.
The formation of the “transformation core” – UAC’s new Corporate center will allow to increase effectiveness and expedite the changes including the formation of the military, transport and special purpose aviation divisions.
The target model foresees transition from a holding with a large number of different subsidiaries with different sizes, goals, specialties and management systems to a single company with a common share. The resources of UAC’s Corporate center, the effectiveness of Irkut Corporation and SCAC experience in international sales will together have a synergetic effect.
The estimated effect from reduced costs in vendor items procurement, optimization of loan-based and investment funding, reduction of debt management costs and other factors will provide a substantial effect and increase sales profitability.
The changes aimed at achieving a more competitive market position are widespread in the world’s aerospace industry. Similar stages in development were previously passed by leading global aerospace players. Achieved results in refining corporate management systems, among other things, are forming additional competitive advantages for these companies.
According to UAC President Yury Slyusar, “we are close to a situation where any project should involve all parts of the mechanism and the old structure is becoming less and less adequate to new challenges. We are not competing inside the country, as previously, we are competing globally with global players. Without solidarity there is no competitiveness. The single united company should become the vehicle that will help to achieve the necessary competitiveness level. In this logic we are bringing UAC’s corporate landscape to the target model.”