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Visiting Obukhov Plant

January 18, 2023, St Petersburg

Vladimir Putin visited the Obukhov Plant, part of Almaz-Antey Aerospace Defence Corporation. The President talked with plant workers.

The President also inspected the enterprise’s shops and was shown military and civilian products.

The President was shown a prototype E-NEVA electric crossover and the Russian-made BAZ-S36A11 four-wheel-drive civilian lorry. The President saw medical equipment, including a modular robotic exoskeleton, manufactured at the plant, and the Mangust mobile radio beacon for directing and controlling ground traffic at airfields. The President was also shown 3D printers and simulators for training and retraining air traffic controllers.

* * *

President of Russia Vladimir Putin: Good afternoon.

I am very happy to see you, and I would like to congratulate all St Petersburg and Leningrad residents on today’s event, namely, the 80th anniversary of breaking the siege of Leningrad. I have just met with veterans, and I have said that this event is of significance not only to our city but to the entire country.

Of course, I could not help but visit St Petersburg enterprises that manufacture essential defence produce that the country has always needed, and it needs it more than ever today. This year marks the 160th anniversary of the Obukhov Plant, a major leading enterprise of the national defence industry. It operates very reliably, stably, and it posts good results. I hope that this will also be the case in the future.

It is a pleasure to see you. I would be happy to speak if you want to hear something from me.

Anton Kochkin: My name is Anton; I work in this shop as a construction electrician.

Since last summer we have been working in three shifts. We have been working hard, probably like people did in the first five-year plan periods if we recall history. However, in the 1990s, the production cluster was practically destroyed. Won’t this happen again, or, to be more precise, won’t it be repeated after the tasks of the special military operation are resolved?

Vladimir Putin: But you said yourself that the plant went through difficult times in the 1990s. Moreover, if we take this cluster, it is historic on the one hand, but has a lot of new features, on the other. Since 2013, additional decisions were made to restore and develop the plant. We started restoring our defence industry, including the Obukhov Plant and the entire corporation, long before the special military operation we are now conducting.

The corporation is manufacturing much needed products. As you know there is a great demand for them in the world arms markets but right now, they are needed primarily for the Russian army. Nothing of the kind, no crashes are expected, especially since this equipment has a big cycle and all contracts and agreements have been signed.

At the same time, there is a task that never goes away, no matter what, which is that defence companies must produce not only military but also civilian equipment. Just now during my conversation with your executives, one of them said, “We feel more stable when we stand on our own two feet, two supports. And the second one is civilian equipment.” Yes, the task is to reach 30 percent – 30 percent of what defence companies produce should be civilian. In 2021, the figure was 27 percent, which is close to the goal of 30 percent.

Probably, now the share of combat equipment is growing but our requirements are also on the rise. However, we will resolve this task of producing civilian equipment gradually. There will be military orders, while also growing the civilian side. I am sure that such large concerns as Almaz-Antei and the Obukhov Plant will confidently stand on their feet.

Do you know what else is happening now? We have just looked at some samples of equipment that you have been producing after some of our so-called partners left our market. It appears that our production level has become high enough. Our businesses rather easily intercept what was left by these partners. In other words, we have learned to produce what we could not make yesterday. Of course, this does not mean that we can produce 100 percent of what they did, but we will achieve the production level we need. The Obukhov Plant will feel confident. There is no doubt about this.

Anton Kochkin: Thank you.

Vladimir Putin: Anything else? Yes, go ahead, please.

Artyom Bogdanov: Artyom Bogdanov, process engineer.

Mr President, the Obukhov Plant plays an active role in the programme for training specialists for defence industry enterprises under targeted training contracts. Are there plans to defer conscription for jobs in the defence industry or to recognise work in the industry as alternative service at the legislative level?

Vladimir Putin: You know, as for the draft within the partial mobilisation, all workers in the defence industry were granted such an opportunity, that is, they were exempted from the draft. And in the economy in general, as the Defence Ministry reported, that number was around 830,000, I think.

This is the first thing.

The second concerns conscripts who are drafted for regular service. Given that the defence industry is operating at full capacity and you are working in three shifts, as well as the urgent demand for its products, we are also considering granting deferment of military service to those who have to be called up for compulsory military service. I think this issue will also be resolved soon.

Artyom Bogdanov: Thank you.

Vladimir Putin: You are welcome.

Andrei Novikov: I am Andrei Novikov, an assembly shop worker. Tell me please, is it possible to fix wage indexation at least at the level of the country’s official inflation?

Vladimir Putin: This is one of the most pressing issues, a key one, we can say it concerns the level of well-being of our citizens, our people. It is being addressed in different ways, I will say, there are two main components to it.

In the public sector, as laid out in the so-called May Executive Orders of 2012, a lot has been done, but unfortunately, a lot has not yet been done to the level intended. But we will certainly continue to work in this area. In this regard, the Government has been instructed to complete wage indexing in the public sector as early as January.

As for the private sector and state-owned enterprises operating on the market, it is quite a different story here because dictating wage levels at enterprises in an administrative manner is very dangerous as it can throw their finances out of balance. Ultimately, if you go down that path, an enterprise could become unprofitable, it would simply close down and that would be it, the jobs would disappear. So, we must be very careful in this respect in a market economy.

But this does not mean at all that we should not think about it. On the contrary, we must think about this all the time. Other mechanisms are used in this case, at any rate, today, for instance, an increase in the minimum wage. Why? Because the minimum wage affects many other components related to wages and salaries in both the public and private sectors, or in the sectors of a vibrant market economy.

Last year, we increased the minimum wage twice. I think overall it was an increase of 19.5 percent. I may be wrong, but it was certainly above the inflation rate that turned out to be less than 12 percent in this country. That said, we must realise that despite an average inflation rate of less than 12 percent, the situation with some products, some product groups, especially foods, looked quite different, especially in the middle of last year. People, the average citizens, experience serious pressure at times.

So, with these and other mechanisms, we will certainly monitor the level of wages and the correlation between inflation processes, that is, the rising costs of goods and services with real wages. For this year, I again instructed the Government to adjust the minimum wage to keep the increase above the rate of inflation.

As I have said, I hope there is a downward trend for inflation (inflation is actually the increase of prices). It is less than its target indicators and less than our experts thought, their foreign colleagues as well. Annual inflation is below 12 percent.

I will recall that in some so-called developed economies, inflation is over 20, 21 and even 25 percent. In some countries that I will not name now, but that also seem to do well, inflation is close to 70 percent. Ours is under 12 percent – this is also a bit too much, but there is a downward trend. We believe that in the first quarter it will be about 5 percent. It is even expected to drop again.

To put it simply, there are certain traps, as we discussed with the Government just yesterday. If inflation is reduced completely, the economy could see some failures. This is why the Central Bank’s policy is based on the premise that inflation should be around 5–7 percent. But adjustments to the minimum wage and other payment benefits related to real income needs to stay ahead of the curve; it should be above inflation.

Andrei Novikov: Thank you.

Vladimir Putin: Yes, please.

Irina Yashina: Good afternoon. Irina Yashina, design engineer.

Child support allowances are paid until the child is 18 months old. Kindergartens do not always take children that young. Is it possible to pay allowances until a child turns 3 if a kindergarten cannot take the child?

Vladimir Putin: What district do you live in?

Irina Yashina: Lastochkino Gnezdo, Nevsky District.

Vladimir Putin: Nevsky District? And you are unable to place your child in a kindergarten there?

Irina Yashina: My child started going to kindergarten at the age of two-and-a-half.

Vladimir Putin: So, he did go?

Irina Yashina: Yes, he did.

Vladimir Putin: The reason I am asking is because Mr Beglov reported to me that the city of St Petersburg is meeting 100 percent of the demand for preschool facilities. There are 64 such regions in the Russian Federation. I think this year – next year, for sure – but preferably this year, all regions should make sure that all families that want their children go to kindergarten and preschool are able to do so.

So, once again, Mr Beglov, are these needs covered 100 percent in St Petersburg?

Governor of St Petersburg Alexander Beglov: There are no issues with placing children aged two-and-a-half at kindergartens. If some districts are still experiencing a shortage, we will resolve them completely this year. So, if there are issues, we are ready to consider and resolve them.

Vladimir Putin: Look, according to official reports, you have 100 percent of the demand covered, but now you are saying that some districts are experiencing shortages. Please look into that.

Alexander Beglov: In the case of newly built housing, when construction projects are being transferred and accepted…

Vladimir Putin: Take another look at it. You just told me that you personally started paying more attention to social infrastructure, including schools, outpatient clinics and kindergartens, when building new residential neighbourhoods. Take another look at it.

Alexander Beglov: Yes, sir.

Vladimir Putin: What is the situation like in the country overall? Indeed, child support benefits are paid until a child turns 18 months, and then nothing is paid through the age of 3. Clearly, kindergartens are important.

In this regard, I would like to say that other support measures can be used. For example, we have resolved that children from low-income families, families with an average per capita income below the subsistence minimum, are eligible for benefits in the amount of up to one subsistence minimum per child up to 17 years old inclusive. That is one thing.

The second. Indeed, child support benefits are paid until a child is 18 months, and then no allowances are paid until the child turns 3. However, families with a per capita income at or below two minimum wages can draw funds from the maternity capital. It can be done. However, the most important thing is to make sure that everyone who wants to see their child go to a kindergarten can do so. We will make it happen.

In St Petersburg, if something is not up to code, the governor says he will bring things up to code. Indeed, this has been done in almost all districts. Perhaps, something is not working out as it is supposed to in some places, or maybe certain things are not suitable for certain people, but this is a different issue that requires our attention.

Irina Yashina: Thank you.

Vladimir Putin: Please, go ahead.

Vladimir Viru: Hello, my name is Vladimir Viru, I am an electrician.

My question is this: will additional support be given to the defence sector and, in particular, to our plant, given the current foreign policy situation?

Vladimir Putin: Support is being continually provided. Your top managers, Mr Mikhail Podvyaznikov [General Director of the Obukhov Plant] will confirm that we are working along several lines. Funds are being allocated to address current financial needs, expand the plant’s capacity, manufacture up-to-date products that are most needed, and to go from producing individual items to mass production. In general, there are very many areas that are being given support.

We have only just talked to the top managers of corporation about yet another opportunity to provide support, keeping in mind that the external market has obviously moved to the background because we have to meet the needs of the Russian Armed Forces. Therefore, some questions that arise require special attention from the Government and we will look into them but now I will not go into detail – the general director together with the minister and the deputy prime minister [in charge of these issues] just told me about this.

There is one more issue that needs to be considered. We recently met in Tula with the general directors of various plants and also talked about it. I am talking about the Obukhov Plant, Almaz-Antey: unfortunately, some of our foreign customers have failed to meet their obligations in full and have not paid for the products they received from us. Of course, in this case we must support the plant and we will.

Vladimir Viru: Thank you.

Vladimir Putin: Are there more questions? No?

Please, go ahead.

(The discussion continued on an issue raised by Taras Tkachenko, an employee in the quality control department, who asked about healthcare for plant employees. The President promised that existing problems would be resolved.)

Vladimir Putin: Go ahead, please.

Vladimir Ivasenko: Good afternoon, Mr President. I am Vladimir Ivasenko, bureau head.

A lot of money was invested in the reconstruction of our sports complex and the development of the Almaz-Antei children’s football club after your visit in 2013. We would like to invite you to visit our sports complex again. Maybe the funding for the reconstruction of the Ice Palace will be found and we will play hockey with you in honour of the plant’s anniversary?

Vladimir Putin: Where would you like to build this Ice Palace?

Vladimir Ivasenko: At Spartak Garden.

Vladimir Putin: At Spartak Garden?

Vladimir Ivasenko: Near the plant.

Vladimir Putin: Mr Beglov, I think there is a circle road passing Spartak Garden, right?

Vladimir Ivasenko: Yes, that is right. It is behind it.

Vladimir Putin: Behind it. If something is built there in addition, especially a sports facility like this, I am not sure how safe it is. There was also to be a bridge there. Has it been built already?

Alexander Beglov: Yes.

Vladimir Putin: The Obukhov Bridge has been built, and the circle road uses it. How would you build under the bridge? Or maybe you could build a sports facility near the road? I do not think this is the best solution. We need to think it over. We should ask Mr Beglov and the plant management to look for a good site for this.

Alexander Beglov: Will do, we will look for it together, certainly.

Vladimir Putin: Yes, please look around for this because it is not very good to build it under the road, under the bridge. That said, the idea is generally very good. I will play hockey with pleasure.

Vladimir Ivasenko: Thank you.

Vladimir Putin: Go ahead, please.

Sergei Ryabinin: My name is Sergei Ryabinin, I am a construction electrician.

Today, we are observing the breaking of the siege of Leningrad. This is a personal story for every resident of Leningrad, St Petersburg. The Obukhov Plant was part of the frontline and over 6,500 of its employees lost their lives in the Great Patriotic War. Today, we are confronting Nazism again. What do you think can help us win in this confrontation?

Vladimir Putin: You know, I have just met with veterans and we talked about this. I would like to emphasise that it is absolutely justified to say that we are fighting against neo-Nazis.

After all, they have elevated Bandera to the rank of a national hero. He collaborated with Hitler and executed civilians. His accomplices also executed civilians. Can you even imagine? But everyone is silent. They do not notice. They pretend not to notice. But this is a fact and they continue these practices of using anti-retreat squads and executing civilians. They continue abusing civilians in Donbass and in adjacent territories, in fact.

Therefore, we are entirely justified in calling it a neo-Nazi regime. And we have every reason to help, including through the use of the Armed Forces, the people who consider themselves part of Russian culture and Russian language speakers, who cherish them as their own culture and traditions. We have no choice but to protect them.

Now about what could help us in this, considering what you said – our historical memory and the trials our people braved. You know, in this sense conceptually, in terms of achieving the final result and the victory that is inevitable, there are several things that have not gone anywhere and that are laying the foundation for our victory. This is the unity of the Russian people, the multi-ethic people of Russia, the courage and heroism of our soldiers in the special military operation and, of course, the work of the defence industry, companies like yours, and of the entire economy because each of these links in the chain – industry, the state of government finances, and the social sphere, which includes support for families and requires the special attention of the state, healthcare – each of these lays the groundwork for our effective development and our victory. Victory is assured. I have no doubt about it. It is assured, in part, by what you are working on, how you are going about it and what you do.

Here is one example. We have just talked to our colleagues, your top managers. For instance, we produce annually three times more of the air defence missiles that you manufacture than the United States does. Overall, our defence industry manufactures about the same number of air defence missiles of different designations as all of the world’s defence manufacturers put together. Our production is comparable with global production. So we have something to rely on. All this is bound to fill us with confidence that victory will be ours.

Sergei Ryabinin: Thank you.

Vladimir Putin: Thank you.

January 18, 2023, St Petersburg