Kalashnikov faces bankruptcy

Posted By Joshua Keating Tuesday, September 29, 2009 - 3:40 PM Share

Izhmash Arms, makers of the developing world's favorite automatic weapon, the AK-47, is facing bankruptcy, thanks to competition from cheap knockoffs:

According to Izhmash Arms' parent company, the Rosoboronexport State Corporation -- which has a monopoly on supplying Russian arms to the international market -- there are about eight countries in which dozens of business are making their own versions of the Kalashnikov. And they are doing this without passing on any licensing fees to the Russians.
And now it appears that the financial difficulties facing the weapons manufacturer have reached crisis point: its very existence is threatened. A businessman in Izhevsk has filed a motion to declare Izhmash Arms bankrupt because of outstanding debts of around 8 million rubles (around €180,000 or $265,000). The case has caused a sensation in Russia because for a long time the Russian armaments industry has been one of the only industries considered competitive on an international basis. And Izhmash, which was founded in 1807 by Russia's royals, is one of the largest firearms manufacturers in Russia.
However, arms exports have fallen dramatically over the past year, falling from around $10.8 billion (€7.4 billion) worth of weaponry in 2007 to a mere $3.5 billion (€2.4 billion) in 2008.

According to the Der Spiegel article, Izmash's problems are partly of its own making. Licenses to manufacture the AK were granted generously to like-minded regimes throughout the third world during the Cold War. After the Soviet Union fell, the companies that were already making the weapons saw no reason to stop.

RAUL ARBOLEDA/AFP/Getty Images

EXPLORE:BUSINESS, MILITARY, RUSSIA

(2)

HIDE COMMENTS LOGIN OR REGISTER REPORT ABUSE

JANKLOW

11:12 PM ET

September 29, 2009

seems like an odd choice of

seems like an odd choice of images for an article about the makers of Kalashnikov rifles...

ACAD RONIN

7:25 PM ET

October 5, 2009

Somebody's fundamental ignorance

Who chose to illustrate a story about the bankruptcy of the maker AK-47 with a picture of th4e Uzi? The two weapons have distinctive, and massively different silhouettes.

If the AP provided the picture with the story, that is par for the AP. They are not a serious journalistic source. If FP, you should know better. In any case, if you make such obvious mistakes, how can I trust you to know what you are talking about when you deal with more complex matters?

Passport, FP’s flagship blog, brings you news and hidden angles on the biggest stories of the day, as well as insights and under-the-radar gems from around the world.