{"id":61778,"date":"2020-05-20T09:12:38","date_gmt":"2020-05-20T09:12:38","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2020\/05\/20\/scandal-ridden-ukroboronprom-seeks-fresh-start-in-ties-with-western-arms-makers\/"},"modified":"2026-08-08T00:39:07","modified_gmt":"2026-08-08T00:39:07","slug":"scandal-ridden-ukroboronprom-seeks-fresh-start-in-ties-with-western-arms-makers","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/global\/europe\/2020\/05\/20\/scandal-ridden-ukroboronprom-seeks-fresh-start-in-ties-with-western-arms-makers\/","title":{"rendered":"Scandal-ridden Ukroboronprom seeks fresh start in ties with Western arms makers"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 If Ukroboronprom is to continue as anything more than a local defense firm, the Ukrainian conglomerate will need to find industrial partners abroad, according to director general Aivaras Abromavicius.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And attracting those foreign investors will be <a href=\"https:\/\/www.defensenews.com\/industry\/2018\/02\/13\/head-of-ukrainian-defense-firm-ukroboronprom-steps-down\/\">nearly impossible<\/a> without a set of needed reforms to the government-owned company, Abromavicius warned Tuesday\u2014 reforms he acknowledged seem to be stalling out at the government level.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWestern investors and Western companies are very sophisticated and they\u2019re very smart. You know, Ukroboronprom for years has had a tainted reputation,\u201d Abromavicius said at an event hosted by the Atlantic Council. \u201cSo it is very clear that almost no Western company of any reputation and size is interested in directly acquiring any assets in the <a href=\"https:\/\/www.defensenews.com\/congress\/2019\/09\/25\/what-you-need-to-know-about-the-us-aid-package-to-ukraine-that-trump-delayed\/\">defense sector in Ukraine<\/a> because of the reputational risks.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That is one of the many reasons Abromavicius is pushing reforms of the company, whose questionable reputation was further damaged by <a href=\"https:\/\/www.defensenews.com\/top-100\/2019\/07\/22\/rocked-by-scandal-can-defense-conglomerate-ukroboronprom-regain-some-legitimacy\/\">a massive scandal in 2019<\/a> involving executives receiving kickbacks on parts smuggled in from Russia. The scandal rocked Ukrainian politics, with some arguing it was a major factor in the loss of the presidency by Petro Poroshenko.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">President Volodymyr Zelenskiy, inaugurated in May 2019, launched an effort to clean up the mess, which included appointing Abromavicius, a former minister of economy and trade, to oversee a reorganization of the company.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/smr\/nato-2020-defined\/2020\/01\/13\/ukraine-sees-two-paths-for-joining-nato-will-either-work\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"234\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/GettyImages-1186740090.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Ukraine sees two paths for joining NATO. Will either work?<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">The country has made a concerted effort to boost its presence across the European Union&#039;s and NATO&#039;s institutions as an advertisement of its commitment to the West.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">Abromavicius, who is pushing a full financial audit of the company alongside a potential reorg of its business units, stressed that \u201cwe need to raise governance standards to completely different levels,\u201d factoring in increased transparency, if the company is to have any hope of working with nations abroad. And, he said, Ukroboronprom needs partnerships to survive as anything other than a local, small concern.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cThe way forward for us is to do joint ventures,\u201d Abromavicius said. \u201cObviously the way forward is just to set up <a href=\"https:\/\/www.defensenews.com\/global\/europe\/2018\/07\/27\/turkey-ukraine-advance-an-188-co-production-talks\/\">production facilities in Turkey<\/a>, in India, you now, United Arab Emirates, whereby our [intellectual property] and their financial resources [combine] together to produce for the domestic and global needs.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While acknowledging that U.S. firms are reluctant to work with Ukroboronprom given its history, such a tie-up would be cheap for any of the major American defense companies, said the Atlantic Council\u2019s Michael Carpenter. And, he warned, the American government may soon have a major geopolitical incentive to try and push a Lockheed Martin or Raytheon to work with the Ukrainians.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWith the economic chaos that\u2019s being wrought by the COVID-19 pandemic, I predict you will see China moving into a lot of countries in Eastern Europe and looking to buy up distressed assets at bargain prices, and it\u2019s going to be crucial that when Ukroboronprom looks for outside investors or looks for doing joint ventures, that U.S defense industry is poised to partner, and to invest,\u201d Carpenter said.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIt\u2019s going to be very important for, I think, the U.S. government also to push our defense industry a little bit to look at this as an opportunity,\u201d continued Carpenter. \u201cIt\u2019s going to be important from a sort of strategic sense not to allow this industrial base to get snapped up by Chinese or other countries that are going to be, frankly, operating in a predatory manner in the months ahead, and that we allow for that matchmaking, not just with U.S. firms but with European firms as well to go forward.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While not directly tied to defense matters, Boeing is <a href=\"https:\/\/www.cargoforwarder.eu\/2020\/05\/16\/something-s-cooking-between-boeing-and-antonov\/\">reportedly considering<\/a> some sort of team up with Antonov on the cargo side, with the Ukranians pushing for a formal joint venture.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/top-100\/2019\/07\/22\/chinese-firms-bump-down-western-companies-on-top-100-list\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/14_special_chinese.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Chinese firms bump down Western companies on Top 100 list<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">For the first time since 2001, the Top 100 includes Chinese defense firms.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">Beijing, meanwhile, has attempted major inroads in Ukraine, with Chinese aerospace firm Skyrizon <a href=\"https:\/\/www.forbes.com\/sites\/katyagorchinskaya\/2020\/02\/17\/ukraine-prepares-to-snub-china-in-aerospace-deal-with-us-help\/#5ca35ba6328c\">attempting to purchase<\/a> a controlling stake in engine manufacturer Motor Sich and the Tianjiao Aviation Industry Investment Company attempting to purchase a chunk of the <a href=\"https:\/\/asiatimes.com\/2019\/07\/chinese-aero-group-eyes-worlds-largest-plane\/\">Antonov facility<\/a> which produced the An-225 Mriya. China has emerged as a <a href=\"https:\/\/www.csmonitor.com\/World\/Europe\/2019\/1121\/Ukraine-in-play-How-Chinese-investments-change-the-game\">major economic trading partner<\/a> with Ukraine in the years since Kyiv cut off relations with Russia. (Antonov falls under the Ukroboronprom umbrella.)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Pentagon acquisition head Ellen Lord has <a href=\"https:\/\/www.defensenews.com\/coronavirus\/2020\/03\/25\/amid-pandemic-pentagon-urges-hyper-vigilance-against-foreign-investment\/\">warned several times<\/a> since the COVID-19 pandemic began that the DoD needs to be keeping an eye on both the domestic and foreign defense industry, with the expectation China will attempt to use the economic downturn to its advantage.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWestern allies took a backseat, ignored the Ukrainian defense sector, and you know, [the] Chinese stepped in and snapped up the best of the private companies in this sector in Ukraine,\u201d said Abromavicius. \u201cSo I would urge, obviously, our allies to take a better look at the defense sector which is being reformed right now in Ukraine. And, you know, show us, show more interest in doing things together.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While Zelenskiy came into office promising major reforms to the country, activists have accused his government of stalling out on many of the promised efforts. Abromavicius \u201cfully\u201d acknowledged that the reorganization of Ukroboronprom has slowed recently, saying he hopes Western officials can \u201cgive it a kick\u201d to get things moving again, but he expressed his hope that in the coming weeks there may be legislative action.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cSo it is a bit too early to say that we have a full support, because I say that everybody and their dog has its own view of what Ukroboronprom reform should look like,\u201d he said. \u201cAnd I think overall, the Defense and Security Committee is a strong supporter, Ministry of the Economy is a strong supporter, I believe that president\u2019s offices as well. And I hope that Ministry of Defense is on our side\u201d soon, he said.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Should the U.S. government push American defense companies to work with Ukroboronprom to keep China out of the Ukranian defense sector?<\/p>\n","protected":false},"author":7,"featured_media":116655,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":46,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[160,46,11,12,36],"tags":[],"coauthors":[3378],"class_list":["post-61778","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-news-roundup","category-europe","category-global","category-industry","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"2D4QZIL3QBCIBOPPYUT2ZMOM54","arc_canonical_url":"\/global\/europe\/2020\/05\/20\/scandal-ridden-ukroboronprom-seeks-fresh-start-in-ties-with-western-arms-makers\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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