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Eastern Europe and Central Asia , Missile and Space

Ukraine's Yuzhmash Aerospace Plant Faces Bankruptcy; An Opportunity for North Korea and Iran to Aquire Valuable Missile Technologies?

February 02nd - 2018

Dating back to 1954, Ukraine's Yuzhmash enterprise long played a key role in Soviet space and missile programs. Producing spacecraft, launch vehicles, liquid propellant rockets and landing gear, it was the origin of some of the Soviet Union's most prolific programs. From the Soviet Union's first nuclear armed rocket the R-5M, to the modern and sophisticated R-36M 'Satan' ICBM, the plant was capable of producing 180 intercontinental ballistic missiles per year. It was one of the most sophisticated enterprises of its time, and the missiles it produced are still among the most capable in the world. Indeed, modern Russian missile platforms such as the Satan 2 are closely based on the technologies of this Ukrainian manufacturer.

Following the end of the Cold War Yuzhmash fell on hard times and diversified its production to include castings, forgings, tractors, tools, and industrial products. While Russia was largely responsible for the development of its own missile technologies following the dissolution of the USSR, Yuzhmash was still able to earn substantial revenues through joint programs with Russia. With the establishment of Ukraine as a separate state in 1991, Yuzhmash became a state owned manufacturer headquartered in Dnipro owned by the Ukrainian government which continued to cooperate closely with its Russian counterparts. With tensions between Russia and the Western bloc escalating from the mid 2000s, and the country seeking to modernise its ICBM systems, Yuzhmash again proved an invaluable partner for Russia. The company's scientists as a result had access to much of the technologies pertaining to Russia's modern programs as well as to Soviet era programs. It was only in 2014 with the overthrow of the Ukrainian government and the country's sharp pivot to the Western bloc that cooperation began to break down. Joint programs were officially terminated in 2015, and Yuzhmash has since faced bankruptcy.

As was the case following the collapse of the Soviet Union, the termination of advanced weapons programs often led associated scientists to seek work elsewhere. With invaluable knowhow and experience which was otherwise extremely costly to obtain, other states with similar weapons programs could benefit substantially from employing such scientists. Just as following the collapse of the Soviet Union Soviet scientists flocked to China, Iran and North Korea where they proved invaluable assets to the three countries' defence programs, so too does a potential collapse of Ukraine's Yuzhmash provide ample opportunity for both Iran and North Korea to acquire invaluable technical knowhow. North Korea in particular has a great deal to gain, as Yuzhmash specialised in space systems and intercontinental ballistic missiles - the latter which Iran has shown no indications as of yet of seeking to develop.

High level U.S. intelligence sources have indicated that Ukraine likely sold North Korea rocket engine technologies in 2017, and these allegations were revealed in a publication for the New York Times. Whether the transfers were part of leaks by paid individuals or official sales of technology remains uncertain - but the American allegations themselves as of yet remain unproven.

In January 2015 Mayor of Dnipro Boris Filatov admitted that the Yuzhmash could well prove a source of invaluable knowhow for Iran or North Korea should the enterprise go bankrupt. As he recalled when warning the United States of the likely consequences of allowing Yuzhmash to go bankrupt: "I had a not so pleasant conversation with some very senior American politicians. I won't say with whom. I told them simply: if things continue like this, these people may end up in Iran or North Korea. Is this what you want?" Ultimately the collapse of Yuzhmash could bode well for the space and weapons programs of both Pyongyang and Tehran, states which are likely to share information obtained between them due to high level defence cooperation particularly in missile development. While both states' weapons programs have come a long way since the 1990s, there is still a lot to potentially be gained by obtaining knowhow associated with the Soviet and modern Russian ICBM and space programs.

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