Russian Military Industry in Shambles: Massive Lay Offs, Low Wages, and Low Morale

Things are not looking good for Russia in Eastern Ukraine, nor does it look good on the Russian mainland, specifically in their military-industrial complex. A letter uncovered by The Jerusalem Post reveals that the Russian Military Industry is in massive shambles, with their employees having low wages and losing civilian contractors as they have no money to pay them.

The Post uncovered a letter sent from the Trade Union of the Civilian Personnel of the Armed Forces of Russia Siberian region to the Russian Prime Minister, Mikhail Mishustin. According to their report, employees had been complaining about their low wages and the massive layoffs the industry had been experiencing. While they did not explicitly name the invasion of Ukraine and sanctions as the culprit of these problems, we can hypothesize that it was indeed due to the economic impacts of the various fiscal and economic sanctions that led to these problems.

This is the second time a Russian trade union has sent a letter to the Russian government regarding low wages and rising living standards, with the first one being the Arkhangelsk trade union. Russian trade unions are a very important block of political support for President Putin.

This is not the first that the Russians have experienced a massive layoff in their arms manufacturing sector. SOFREP reported earlier in April that Russian shipbuilder Vostochnaya Verf in Vladivostok had stopped building ships or repairing vessels as they did not have the necessary funds and parts to keep up production and repair services. The lack of foreign components due to the economic sanctions has severely impacted their operations, which has led them to stop production altogether. Some of these foreign components allegedly were navigation systems, naval warfare systems, communication systems, and steering columns, to name a few.

Worse, the company had to cancel government orders of two tankers and two missile boats worth some 35 billion rubles and had to “suspend” all work since April 2022, with a large majority of their staff being “dismissed.” This is bad news for the Russians as Vostochnaya Verf was the main supplier of ships for the maritime border forces of the Russian Navy, according to their official website.

Another critical piece of evidence that we can connect this new development to is the fact that the main manufacturer of Russian tanks, Uralvagonzavod, had halted production back in March also due to a lack of components and parts. The company had its assets frozen by the British Government last February 24th, with the US government having it sanctioned since 2014 due to the Russian annexation of Crimea. With a large number of Russian tank losses in Ukraine, and with many more to come as the Ukrainians have been armed with Western anti-tank and anti-armor weapon systems such as the Javelin, NLAWs, Panzerfaust-3s, and their very own Stug-buggies, the Russian forces are not able to replace or repair their tanks – which does ultimately leave them in a vulnerable position.

“The Russian military-industrial complex remains dependent on imported high technologies. Without the supply of which, Russia is unable to continue the production of modern weapons,” the Ukrainian Intelligence Directorate said.

This seems to be true, as a study published by the University of Zilina revealed that the Russian defense industry had increasingly grown dependent on the import of components during the 1990s, specifically on its electronic components, avionics, aircraft engines, and new generation composites for its military equipment. In fact, 80% to 85% of the Russian defense industry was determined to be dependent on foreign components.

As we understand things, a considerable amount of high tech electronic chip sets used in planes, tanks, missiles and other systems was coming from Taiwan.

“In 2011-2012, the dependence of the Russian defense industry on foreign components was estimated at 80-85%. We have already said that sanctions imposed on import of military and dual-use goods to Russia in 2014 had a profound impact on the defense industry,” the authors said.

Even worse, a large number of those foreign components were imported from their enemy, Ukraine, which they have been bombing for over three months.

“Sanctions took effect in 2015-2016 due to exhaustion of the resources and expiration of the contracts signed with the Western countries before the imposition of sanctions. As a large number of components were imported from Ukraine, it was difficult to find an alternative,” they added.

In response, the Russians tried to produce the components themselves but were only able to replace 57 Ukrainian components out of 1,070 items:

“Minister of Defense Sergey Shoygu ordered to master the production of 695 (out of 1070) weapons and equipment samples which were previously produced in collaboration with Ukrainian enterprises. However, in the first half of 2015, only 57 Ukrainian components were replaced instead of the planned 102 items. It accounted for 55% of annual plan,” the study wrote.

Russian Surface-to-Air Production Plant Shuts Down

In fact, they rely so much on foreign components that a Russian facility that had been producing surface-to-air missiles (SAMs) was shut down due to import restrictions brought upon by Western sanctions. The facility in question is the Ulyanovsk Mechanical Plant, a plant located in the Ulyanovsk Oblast. This facility produced the 9K37 Buk (SA-11 Gadfly) and the 2K22 Tunguska (SA-19 Grison). It is unknown whether S-300s and S-400s were manufactured in the plant.

According to Ukrainian intelligence, almost no components in the facility were natively Russian, and almost all components were imported, as was allegedly said by a plant worker. When the factory finally closed, these employees said that they were given just two choices: To go on a forced unpaid leave or join the Russian army to invade Ukraine as SAM operators. If they chose to go to Ukraine, they would get paid some $600.

It would be difficult to think that these workers would want to go to Ukraine as they probably know how many losses their forces have been taking over there. While the Russian public does not publicize its casualty numbers, word must have spread like wildfire in Russia about the deaths of their people in Ukraine as families had started to demand answers about where their sons were following the sinking of the Moskva.

With various military plants being shut down under the grip of Western sanctions, it is completely relevant to ask ourselves how long the Russians can sustain their invasion of Ukraine as their losses in tanks, vehicles, missiles and planes far exceeds their industrial capacity to replace them.