Indian Military Aviation- Jan 10 2012

[nakul]

Again your opinion which I respect but don't agree with. I am convinced that a majority of Indians abhor this kind of thinking and have become sick of it.

There's little point in going off on a "he says she says" tangent here. The bottom line is we all want the best for Indian military aviation and we all have our own beliefs on what it will take. Many believe that the DPSUs have failed miserably and are responsible for our unenviable situation today where we import rifles and ammunition from 3rd rate countries. Many believe that this "the Indian way", chalta hai etc. It's important to recognize that NOBODY here is suggesting that HAL etc should become extinct and all its people be fired. Most believe IMO that there is a middle ground and folks like Alpha Design and Astra Microwave are one indication of how it may be possible to break out of the DPSU straightjacket and why this is happening.

India does not need a Lockheed Martin with factories spread over 50 states and all politicians towing its line. That is the kind of Reliance can field. We had an NRI who was able to supply trucks worth 35 lakhs for 65 lakhs. If this is the power NRIs can have, imagine an Ambani shoving military maal down India's throat. We need to grow, but it should be organic where our forces get the best. There is no point in haphazard measures which will hurt our defence industry.

Currently, DRDO has to field a much superior product for it to gain acceptance. Most people grudge the fact that a superior product is dumped for foreign imports, but see the kinds of improvements it brings. The LCA is going to be the best in class when inducted, Arjun MkII will have an active reactive system, HELINA would give us unmatched capabilities. Without these improvements, we would end up like Pakistan who are happy to induct the JF 17 since it is indigenous. The PSUs take time because it is very hard to make an LCA in JF 17 time scales. No amount of private investment will change that.

It is easier to get rid of the arms lobby than to throw of a MIC. The USA is a prime example when pvt industries with deep pockets start playing golf with politicians. If the country needs to shore up its defence needs, it should be done at the benefit of the armed forces and no one else. As Karan M pointed out, no one will happily give away core technologies. We have to develop them on our own. All major arms industries around the world survive on govt support when in need of funds. Even France gives orders sufficient for Dassault to survive. How does India giving assured orders to HAL make it different? At the end of the day HAL is like Irkut, ADA is like Sukhoi. We need more ADAs who can transfer seed knowedge to private industries. Since ADA is still not big enough, we are yet to see a boom in pvt industry. Its important that the eggs are safe with ADA, the hatchlings can be didtributed to Reliance & co.

[Karan M]

I don't. I refer to the majority of Indians who I think will agree that HAL is a non-performer compared to say a Tata. But I expect you to respect my point of view and present valid counters, not make accusations.

Sorry, what valid counters am I expected to offer to counter your entrenched views which are already baked in? Lazy, worthless PSUs vs the saviour pvt sector stuff...its a waste of time, really.

Next, you abrogated to yourself the royal "we" and now you claim that a majority of Indians will say a TATA is better than HAL. Is this sort of argumentation even serious....

But that "we" feeling is not shared by I, and many others, I daresay in the GOI & defence industry as well who are far more circumspect. Your comment about "radical surgery" etc for instance. Who pays the price for that especially if it fails & given things here, its rather bound to.

Besides which given your post conveys an almost complete lack of balance when it comes to HAL versus what the private sector can do.

I might read this as a smart businessman who is close to GoI getting the inside track on which way the wind is blowing. And a smart Boeing executive making a smart life decision because he too sees something hugely positive that he wants to be part of. Happens all the time.

You may read it as anything, and that's your prerogative - but what makes what you sure it is true? Otherwise, what you did was make an theory, which can be countered with other theories backed up by other assumptions..

All I did was point out that your theory of Vivek Lall joining Reliance being some hidden vote of confidence from Boeing - could be wrong, and it could as easily be another theory...ie it was pure careerist "try this, lets see if it works, otherwise I will run back to the US" sort of stuff we see all the time, in multiple industries...

If foreign MICs want to participate in the Indian aerospace industry, they will have to do so under Indian requirements, not on their own terms. They don't want to work with Indian government firms because they have a long negative track record to deal with and know exactly what created it. No responsible company would willingly put itself in a bad situation.

Again, utopian stuff but not really how things are at all.

First, any foreign owned firm is fairly liable to uphold its local laws & regulations such as ITAR, irrespective of whether it works with countries like India. This is a source of frustration for India, and one unlikely to disappear.

Second, you quote the textbook response of what companies would do to win/retain business, when faced with unyielding Indian requirements - valid, if this were an ethical business discussion in an academic setting.

In reality though, they are doing something simpler - they go back to their embassies and the embassies lobby, and lobby hard. For India to relax its rules, and whenever possible to land the deal, and then prevaricate, prevaricate.

Responsible company/ies, you are kidding us right?

This is the most political sector in the world, closely watched, regulated by their respective countries, and no country out there wants to part with even a pebble unless they have to.

Go take a look (if you already haven't) at how the Indian attempt to rationalize drug prices is facing entrenched opposition from other nations & their corporate-Govt business support arms..

This is nothing different, even if couched in grandiose terms of "mutual security", "assured alliances", "partnerships for the future"...and similar stuff.

[Kartik]

Since you are an expert in aviation composites, you are probably aware that FAA-certified and mil spec-conforming composite airplanes, including supersonic ones, are made in peoples' garages every day?

It would be far more helpful and less obnoxious if you would share your inputs on why and why not without jumping on people just because they have a different view on what is best for Indian military aviation. If you want to defend a non-performing and proven dud, fine go ahead but don't arrogate to yourself the authority to dictate what is best for the country.

They are assembled in garages from kits that are built elsewhere- they are not built from scratch in garages. There is a big difference between the two. You cannot fabricate a large sized composite panel in a garage, not unless that garage has equipment that large workshops have such as .

I wasn't being obnoxious. That poster has a history of simply demeaning everything HAL does and his post on the nose bay door and wiring harnesses illustrated just how little he actually knows about how to put them together. I simply posted a picture of the gun bay door and showed him that its not a piddly part that 2 guys in a garage can put together (like he said). He went into personal attack mode, telling me that he's forgotten more than I've learnt and about his educational background..

HAL is not a non-performing dud. If it was, we wouldn't be seeing those license manufactured airplanes entering IAF service. It is inefficient and I've stated that. But to attack it incessantly and on every given opportunity stinks.

[Kartik]

This "Lovitt Technologies" of Australia is the sort of Private aerospace firm we need to see in India capable of doing Aerospace work. Currently ONLY HAL is capable of doing anything worth mentioning. Mahindra, Tatas etc may get there in 10 years. Currently we only have a few in India, and none as capable as this Lovitt of Oz . India pvt players in Aerospace are Taneja Aerospace, Maini engineering, Shanthi gears, etc

I'd add Tata Advanced Materials Ltd (TAML) to the list. They do manufacture composites components and have been outsourced some work by HAL as well.

[Kartik]

.. please share links on people having autoclaves in their garages and making airplane parts for supersonic planes?

One doesn't always need an autoclave to use composites for aircraft, an oven will do. If some part does need it, autoclave time can be rented in one of the many companies making windmill props, RVs, race car bodies etc. Bottom line, it is commonly done by DIY types.

Do you know how much paperwork goes into making aircrafts and helicopters and other defence items in US?

I do.

Just FYI, autoclaves are more than just high temperature vessels- they apply pressure as well, which may be required depending on the shape of the parts being cured. Panels of the nose bay door type cannot be cured in an oven and will have so many flaws as to be guaranteed rejected when tested.

[Indranil]

This "Lovitt Technologies" of Australia is the sort of Private aerospace firm we need to see in India capable of doing Aerospace work.

No, we desperately need to see private companies replacing HAL, GTRE, DRDO etc.

Seriously, how do you make such sweeping statements?

@Tejasji, I hope you reconsider your decision to not post again.

[Karan M]

Your opinion, not shared by me and what I think are the majority of Indians.

Again, you mention the majority of Indians...so we are to take your "poll" of the majority of Indians, and then extrapolate it to what should be done for HAL et al. Scientific? Logical?

Everyone in India grins and bears it, so things won't magically improve just because management changes.

Again your opinion which I respect but don't agree with. I am convinced that a majority of Indians abhor this kind of thinking and have become sick of it.

Ok, so you post a standard para about how things "need to change" and how the bad public sector will be saved by the good private guys, I point out that as things are re: the private & public sectors in India, and you come back with a rather weird "I am convinced that a majority of Indians abhor this kind of thinking and have become sick of it. ...sounds rather pompous.

Are you working in an Indian company? Not one of the showpiece ones but the regular ones and ask why many of the folks within run to MNCs..

Ask about hiring and retention policies in many of these companies (not the showpiece ones).

Ask them about why running abroad, running to the handful of big names, or changing to IT remains a good choice for many engineers who land jobs in some of these firms.

Ask them about promotions, payscales..

All these continue to have limitations. They are NOT as rosy as you imply they are in a PSU vs Private matchup.

Net, Indian industry is growing, but the scale of change required is too much and you are just dismissing this.

Look at the amount of work that needs to be done TODAY, and then you'll begin to understand the scale of the issue in India and why a transition from x to y cannot occur overnight and will not bring about any massive change in fortunes but rather cause problems

Pay is also not so liberal so as to reverse an exodus of Indian brains. Family owned Indian concerns often operate on a very steep pyramid. The bottom-middle tiers get literal peanuts versus some other MNC dominated sectors (only a few flagship companies are somewhat exempt).

Another big problem is capital expenditure..

There are many private firms doing a decent job, but they are nowhere near the scale of conceiving or even making an ALH or designing a Jaguar upgrade.

Fact is we have a long way to go to develop a professional MIC in the private sector.
Look beyond the brochures and schmalzy talk of importing build to design stuff of second rate gear, especially when even that capability is yet to be proven.

Merely evangelizing one side while asking the other to have some "radical surgery" whatever that means, is not likely to work either.

Sorry but a messianic private sector rescuing the Indian MIC is unlikely to happen, because the private sector too has huge amounts of talent scarcity, organizational issues, lack of savvy top management, ineffective bureaucracy which will take a fair amount of time to rejig.

Meanwhile, things will continue iteratively. Because the MOD is reasonable enough to grow capabilities and will not throw the DPSUs out for a mix of reasons. Political reasons are one amongst them, but so are the obvious facts that they do have core capabilities few if any companies in India can develop even within the next decade.

The MOD will continue to use offsets as a means to sustain the SME base and grow the footprint of the larger private players, and in the future, DPSUs will compete with pvt players, but for strategic reasons, it always makes sense for India to retain the DPSUs..

Autonomy, freeing them to do more, these are all things that are possible..

I really don't see why you are so worried.

As things stand

-The private sector is entering Indian contracts
-The DPSUs have new business which involves R&D and growing competence
-The DRDO et al are developing multiple new items which are to enter production
-SMEs are getting offsets

Things are not ideal but they are not as bleak as you claim they are, to require drastic surgery and such stuff either.

There's little point in going off on a "he says she says" tangent here. The bottom line is we all want the best for Indian military aviation and we all have our own beliefs on what it will take. Many believe that the DPSUs have failed miserably and are responsible for our unenviable situation today where we import rifles and ammunition from 3rd rate countries.

That's less an indictment of the DPSUs but more an indictment of the endemic corruption that has existed in India thanks to a complete straitjacket of the econo-political system by one group. And the fact that defence imports bring in good money. Artificial scarcity exists across the board, and tomorrow even if private firms come in, the same will continue to exist.

Many believe that this "the Indian way", chalta hai etc. It's important to recognize that NOBODY here is suggesting that HAL etc should become extinct and all its people be fired. Most believe IMO that there is a middle ground and folks like Alpha Design and Astra Microwave are one indication of how it may be possible to break out of the DPSU straightjacket and why this is happening.

Again, companies like Alpha etc have come about because there is now business for them. The sheer lack of interest in the MIC apart from a handful of poorly funded flagship programs (funding in spurts and then droughts) automatically means that a viable ecosystem would not develop.

Alpha, Astra are SME's - btw. They don't have the cost structure of a behemoth like HAL or BEL. Because they don't have the scale of doing what a HAL or BEL can do either.

I mean, an Astra has a topline of Rs 100 Crores or thereabouts (and thats one of the more successful SMEs).. thats the price of a single radar system made by BEL.

[Victor]

your entrenched views which are already baked in?

As opposed to your entrenched views which are already baked in?

Lazy, worthless PSUs vs the saviour pvt sector stuff...its a waste of time, really.

Agree that's a wast of time. Who wrote it? Not me.

you abrogated to yourself the royal "we" and now you claim that a majority of Indians will say a TATA is better than HAL. Is this sort of argumentation even serious....

So what in your opinion is a "serious" argumentation? Like I said, please be specific in your counters.

that "we" feeling is not shared by I, and many others,

I expect that and thought I'd made that clear. If you are going to take the trouble to respond to and counter my posts, please do me the courtesy of reading them fully first.

but what makes what you sure it is true? Otherwise, what you did was make an theory, which can be countered with other theories backed up by other assumptions..
All I did was point out that your theory of Vivek Lall joining Reliance being some hidden vote of confidence from Boeing - could be wrong, and it could as easily be another theory...ie it was pure careerist "try this, lets see if it works, otherwise I will run back to the US" sort of stuff we see all the time, in multiple industries...

Could be. All we we're doing here is discussing informed "chairmarshall" theories, not making decisions, right?

In reality though, they are doing something simpler - they go back to their embassies and the embassies lobby, and lobby hard. For India to relax its rules, and whenever possible to land the deal, and then prevaricate, prevaricate.

And? I truly hope we are able to do this back to them in the not too distant future.

Responsible company/ies, you are kidding us right?

Nope, not kidding. They are answerable to their stockholders and every single employee's neck is literally on the line.

Go take a look (if you already haven't) at how the Indian attempt to rationalize drug prices is facing entrenched opposition from other nations & their corporate-Govt business support arms..

Given the health/wealth situation globally, who would you bet on? Given India's defence needs ($100 billion over next decade?) and abject PSU performance, what would you bet on? We are back to stating mere theories and its better to say "I don't agree with you because....." instead of

utopian stuff but not really how things are at all

.

[member_23360]

In future(After 5 - 10 years), all license production activities(for e.g. SU 30 MKI license production etc.) should be handled by PVT sector while PSUs should be restricted to product development ( for e.g. lca, amca development).

[Ardeshir]

^^Pray tell, why?

[Neela]

Said poster had this to say about GTRE

X post from Kaveri thread.

According to the article posted by Vic and it was straight from the Kaveri project director, Snecma was providing SCB tech. thermal barrier coating tech. and Blisk tech. So what the hell is GTRE providing. The extent of tech. transfer by Snecma is essentially gifting India the ability to produce gas turbine engines for fighters in India independently. It hardly seems likely they would do this solely to get a joint venture deal. The only thing that makes sense to me is that this is quid pro quo for the Rafale deal and the Mirage upgrade rape, I mean deal.

I do not want to start the same discussions here. But I want to point out that the post is insensitive and quite rude. I cannot atttribute this to ignorance. He has read the previous posts and knows that GTRE has tested a 70kN engine. Yet he says "what the hell is GTRE doing" and "France is gifting INdia jet engine technology" .
As if Reliance or Mahindra can make a jet engine in 1 month if Snecma gave them these same technologies. Just think about a simple jet starter. GTRE has developed this on its own. They have invested time, effort and money on this to get a product that is reliable and passes QA. Integrating this into a product is a challenge , more so for a company that is doing this for a first time. There could be issues in where it is placed, needing more thermal isolation. All these are small challenges in itself. Complex problems requires far more detailed trouble shooting. And hundreds of these problems cannot be simulated at all. One will see problems at such a late stage in development that one can easily be demotivated and give up. That is why when someone says "what the hell is GTRE doing" , it really really is rude. Dr Saraswat has taken the positives out of the GTRE effort and says more time and technology partnership is needed. He has not gone to PMO and asked for GTRE to be disbanded. So it is a few people's word here on these forums Vs Dr.Saraswat. I know who people with common sense will believe.

A simple, humble assembly line is place where technology and innovation over decades has transformed it into a highly efficient workplace. Entire courses are dedicated to it ( generally under Industrial management). Those who think HAL is just assembling stuff would do well to just ponder over the myriad laws, workers, logistics, deliveries and products and estimate the complexity there.

Another common thing that is mentioned about HAL is that Army officers should take over management.
Say WTF do army officers know about the shop floor or a CNC machine. This is a classic case of confusing dedication over management - they are not the same thing.

Criticism is ok but pretending to be an expert and giving solutions without having an iota of experience is what irks people.

[member_23360]

^^Pray tell, why?

It will reduce some burden and HAL can better manage product development activities, also this will boost Private sector.

I hope within 15 - 20 years, Private sector will be matured to under take more complex product development projects.

[abhishek_sharma]

^^ By product development do you mean R& D activities?

[member_23360]

Activities like LCA, AMCA development

[Karan M]

As opposed to your entrenched views which are already baked in?

Hmm...I am not the one saying "replace the private sector with the public sector"...am I.. so, no, my views are more nuanced than yours & I am fully willing to see both existing capabilities develop further, and new ones come online.

I don't propose throwing either one of them out or asking for some radical surgery or the like.....(partly because its very unlikely to occur as well)..

Agree that's a wast of time. Who wrote it? Not me.

Actually you wrote far worse...I think I was being a tad charitable when I paraphrased your statements..

Here are a few...HAL is a non-performer...DPSUs have failed miserably and are responsible for our unenviable situation today where we import rifles and ammunition from 3rd rate countries.... Nobody wants to be forced to work with a company that has a long, shoddy and well known record of non-performance. ...

So what in your opinion is a "serious" argumentation? Like I said, please be specific in your counters.

What specificity do you require? There is ample evidence in this entire thread & multiple discussions on the internet to see what BEL, ECIL, HAL etc have done.

There are many programs in which DPSUs have done a credible job of partnering & supporting critical national programs, EW, radars, sonars, missiles..

Repeating the same ad nauseum is not a productive use of our time. If you are truly interested beyond this typical public private stuff, you can get the evidence easily via this forum itself. Classes of products really..the DPSUs deserve credit for sticking through and bringing these items to mass/serial production and not just taking the easy way out ..

I expect that and thought I'd made that clear. If you are going to take the trouble to respond to and counter my posts, please do me the courtesy of reading them fully first.

Pot meet kettle...When you talk of courtesy of reading others posts fully, you might have done the same before starting off about on a tangent about how the vast majority of Indians abhor xyz line of thinking, when you didn't even get what I was saying..anyways, no point in being disagreeable over a debate, so lets drop this..

Could be. All we we're doing here is discussing informed "chairmarshall" theories, not making decisions, right?

If it was "could be", then it was not evidence of which way the "shift" was going, in terms of Boeing choosing not partner with HAL and instead choosing Reliance by sending Vivek Lall.

Net - no such evidence exists. As matter of fact the choice of private just shows that GOI is not as brazen as the PRC is, and is allowing these firms to dilly dally..

And? I truly hope we are able to do this back to them in the not too distant future.

Which is laudable but misses the point that these companies are not playing by the strict "fair is fair" rules that you applied to their actions.

Net, they are not playing by Indian rules alone (since they are subject to country of origin laws) and nor are they in synch with Indian aims & objectives.

This renders the bit about XYZ choosing to join with an Indian private firm being a decision driven by evaluation of competence, moot.

Clearly, they wish to protect their IP & strategy demands they keep it away from state firms which are known DRDO partners, and move it to JVs where they can firewall whatever they want.

Which BTW is also linked to the lobbying for the removal of the 26% and even 49% caps for FDI in defence. They want fully owned subsidiaries in India, doing their work, whilst being counted against offsets. Hey, we employ xxx people locally, that should be enough for you...

Nope, not kidding. They are answerable to their stockholders and every single employee's neck is literally on the line.

Check the context of my reply.

I said responsible companies in terms of these companies being responsible or somehow subject to meeting Indian interests. Clearly not.

Company X being answerable to stockholders in y country, is irrelevant to Indian interests.

Go take a look (if you already haven't) at how the Indian attempt to rationalize drug prices is facing entrenched opposition from other nations & their corporate-Govt business support arms..

Any reason for the sarcastic icon? I merely presumed that you may already know this, and out comes this...anyhow

Next..

Given the health/wealth situation globally, who would you bet on? Given India's defence needs ($100 billion over next decade?) and abject PSU performance, what would you bet on?

Err what? So I point out how certain Govts routinely lobby for their pet industries and attempt to brazenly arm twist countries like India (all the while tooting a different horn back home) and then you come back with "abject PSU performance".. Didnt get the correlation?

Actually India's defence needs are what will ensure that both the public & private sector will both grow, both via direct purchases & licensed assembly, indigenous make projects, and then there are the offsets.

We are back to stating mere theories and its better to say "I don't agree with you because....." instead of

utopian stuff but not really how things are at all

What you quoted was utopian if not anarchic, because the theories you quoted, unfortunately have no practical path of implementation in our current setup and are unlikely to solve India's problems, but exarcerbate them. We can't afford to radically tinker with our baseline even if we try and get more stuff underway elsewhere..

A few issues..

Almost 90% of India's platform level integration capabilities currently exist in the DPSUs and have no comparable scale in the private sector (outside of shipbuilding)..

R&D spend as a % of Revenue across heavy engineering majors continues to favor the DPSUs hence DRDO continues to tap certain DPSUs for partnership

If we look at what core projects and programs have private involvement and at what level, we can clearly see that in select programs Level 1 systems are sourced from private firms, and that the costs involved in graduating from private subsystem manufacture to full scale platform/system integration..are fairly prohibitive..

I mean, if we spend some time looking through all these details, it becomes pretty clear, that talk apart, Indian Pvt sector is nowhere near the scale required to take up DPSU level work within this decade. Probably at the end, if things turn out well for them. Within those ten years, HAL, BEL etc will not stay still, they too will move.

Thing is India's needs are finally coming to the level where it can sustain several large firms..that's a good thing for India.

Plus, radical reconstructive surgery of any kind, just does not work in the Indian milieu.

Its not how things work here. Change is iterative, gradual but it does occur, but its not going to be some slash and burn stuff.

Its hard not to be cynical about Rafale-Reliance (too much comes to mind) but its worth giving them a chance. I wouldn't write them off (or Mahindra or TATA).

India needs all the companies it can get, and more the better.

[abhishek_sharma]

>> Activities like LCA, AMCA development

Why should govt pay for R&D and then transfer the product to the private sector for reaping the benefits? This usually happens (when govt pays for subsidized education and funding for R&D work) and private sector pontificates on "efficiency" and "profitability".

[member_23360]

Govt. is already doing this -

For e.g. http://www.business-standard.com/india/ ... or/472932/

http://www.ndtv.com/article/india/india ... try-237961

[abhishek_sharma]

Of course, it is doing so. My point is that it should *not* be done.

[srai]

^^^

Governments pay for defense related R&D and take majority of the losses (but not profits). This is true of all "free-market" economies like the US, France, UK, etc. MIC does not work without heavy investment from the public sector/finances.

[abhishek_sharma]

Once again, I know it is true. It *should not* be that way. Moreover, if people in US and France jump in a well, we should not follow them.

[Karan M]

>> Activities like LCA, AMCA development

Why should govt pay for R&D and then transfer the product to the private sector for reaping the benefits? This usually happens (when govt pays for subsidized education and funding for R&D work) and private sector pontificates on "efficiency" and "profitability".

Right now, there are three things happening.

- Cost sharing approach: DRDO pays for x%, DPSU pays for y % (x+y at around 70- 80%), IAF/IA/IN pay for the rest (20- 30%). IAF MiG-29 EW project (pretty expensive) is per this. Another one is where the user service has committed to costs. IAF is paying 30% of D&D costs for LCA MK2.

- Make procedure under DPP: GOI funds R&D prototyping & development costs of upto 80%, industry bears the rest. 30% of value, of the finished item has to be indigenous.

- Transfer of Tech with a licensing fee: DRDO has done this for several smaller scale projects (at item level): NBC items, health items etc.

[Karan M]

Once again, I know it is true. It *should not* be that way. Moreover, if people in US and France jump in a well, we should not follow them.

You have to incentivize the private sector if it lacks the resources to do it on its own. By minimizing the risk, you bring the firms in. Which is of course a good thing for the long term - more manufacturing capability locally.

[member_23360]

>> Activities like LCA, AMCA development
- Transfer of Tech with a licensing fee: DRDO has done this for several smaller scale projects (at item level): NBC items, health items etc.

can it be done for large scale projects like lca production ??

[Karan M]

- Transfer of Tech with a licensing fee: DRDO has done this for several smaller scale projects (at item level): NBC items, health items etc.

can it be done for large scale projects like lca production ??

It can but is very difficult especially since there are no HAL equivalents around. Thing is DRDO requires partners who too can take up part of the workload. Otherwise instead of working on the next gen product, the person would be busy hand holding the production team to understand the current one.

Typically, how things are done now is that they involve a few select private and public partners at design and development stage. Depending on the project and its complexity, and partner skill levels, where they start working together varies. But generally, by the time product comes to production, both sides would have had ample time to fix issues, and launch production and sustain it.

One of the key things DPSUs brought to DRDO in the early days of cooperation is the "manufacturing" mindset, where detailed design drawings, documentation etc were required as essential to make the product/parts ready for repeated manufacture at a certain level.

HAL & DRDO will have to walk this path even for the LCA and similar projects.

Net - the earlier the partner is involved, the better. Coming late to a complex party like the LCA is possible (after all, that's what licensed assembly is) but not ideal.

[Victor]

India needs all the companies it can get, and more the better.

I'll add that we don't need companies that are answerable to no one, have a culture of sycophancy, promote on seniority not merit, have non-competitive remuneration for top talent and have a decades long record of under performance because of these debilitating maladies. If we can change HAL/GTRE/DRDO to this state it will be a welcome miracle and you'll get no further arguments from me. Yes, eventually even this type of company will produce *something* but IMO that would be by accident not design. IMO.

[Victor]

...if people in US and France jump in a well, we should not follow them.

Agreed. But if they design fantastic warplanes, should we not follow what they do?

A basic truth we ignore is that in order to have a productive centralized manufacturing sector, a country needs an iron fist in enforcement. That was the case in the USSR and is the case in China. That is impossible in India and without it, people are not going to be incentivized enough. As soon as the iron fist disappeared in the USSR, their competitiveness also disappeared. Its human nature and there is nothing special about us Indians. We are as intelligent and as dumb as everyone else and will perform like everyone does. If we don't pay attention to what has worked in the past and what hasn't, we have only ourselves to blame.

[Indranil]

^^^ No miracle would be required Viktor Saab, only competition for survival is required.

In my view though, the biggest threat to HAL's survival will be even before they there is competition. HAL would have to fight quite hard to keep its trained manpower from being poached by the private players.

[aharam]

After spending the last hour reading the debate on DPSUs between several folks, with rather valid points, I felt compelled to get out of lurk mode and participate. The fundamental issue here is whether DPSUs are (a) capable and (b) can or will the private sector eventually take over and to what effect. I am sure HAL is capable and has a core cadre of researchers and technicians who work there because they want to. I once heard this from someone in ISRO, that folks join such organizations because they want to. The same source said that ISRO had almost 80% of its cadre that were actually effective. Before you counter this, note that even in the private sector, there is a set of people that don't actually pull their weight and 80% of an organization pulling its weight at PSU salaries is very good, since it is clear that salary is not their motivation. Whether this is true, I do not know first hand, but the source to put it mildly is very credible.

The reason, I laid out this elaborate theme is to raise the question, what is the equivalent effectiveness rating for a DPSU? HAL's deliveries have been late and they tend to take on more than they can chew. When it comes to offsets, they are the 800 lb gorilla in the room, so getting an offset contract is more a testament to the truth of the above statement rather than any intrinsic capability. Tha said, they are doing a hard job, when the private sector can easily poach their employees on salary. I for one would not want to be a manager in their shoes.

So, is the private sector intrinsically better. The answer is not so cut and dried. Yes, they do have better incentive mechanisms, since they are not tied to a nationwide compensation program. Then again, if they are successful, they are a force unto themselves. If a Boeing or Lockheed Martin can derail a Pentagon budget, imagine the power concentrated in the hands of a Reliance, which on a per capita basis is far more powerful than American defense contractors, that are richer on paper. I strongly urge folks to read Eisenhower's famous MIC speech, there are many links to it, one is at http://coursesa.matrix.msu.edu/~hst306/ ... ndust.html
While Eisenhower was a cautious general, maybe exceedingly so in the European campaign, his premonition on the power of the MIC was bang on target. Will a push to gain efficiencies through privatization in India come with the same risks as in the US, which right now is clearly following a path of defense expenditures that can only lead to economic ruin, since there appears to be no monetary reality to Pentagon's budget.

Privatization may in the long term not be the panacea it appears to be - DPSUs are slow and inefficient, but at least they don't have to respond to shareholders like private sector firms, where the the only path to success is to change the national defense budget allocation over the long term. In some sense, privatization is like a dictatorship - you get efficiency at a rather large cost. Right now the defense private sector in India is small, much like the US in the nineteen thirtees - it will produce excellent material at reasonable cost, since it still has to prove its worth. The question is what will the private sector do in the long term. If the US with its comprehensive checks and balances system is any example, the private sector path is dangerous.

This has been a long rambling email. Your thoughts would be much appreciated.

Cheerio
Aharam

[Suresh S]

victor and tejas you are bang on target.For a intelligent person to come to the right conclusion you must have experienced india, europe and especially USA and hopefully many other places as an adult to know the strengths and weaknesses of your culture.
To understand what is good for indian military aviation or defense in general it is not necessary to know the difference between a pylon and bomb bay door.Knowledge of minute details of an airplane because one happens to work in that field does not make one an expert on Indian military,s needs and judging by the response of many on this forum it seems to have the opposite effect.
Continuing to defend mediocrity in PSUs and culture of reservations is trying to defend the indefensible.
Tejas may use hyperbole and repetition but that is required when so many people on this forum seem to believe just the opposite.
A malignant melanoma can not be cured by bandaid it needs radicle surgery. PSUs can not be improved they must cease to exist.
when a country had been under foreign occupation for 800 years there is something fundamentally wrong with the culture. Unless these fundamental issues are dealt with India will continue to be dictated by the whims and fancies of major or even minor powers and trying to continue on the already proven wrong path and even defending it is one more sign of that fundamental problem.

One OT thought it is my belief that if Netaji subhas chandra bose had not died tragically in that plane accident and had become the prime minister of india it is india and not china that would have been the 2nd largest economy in the world in 2012 and our GDP in purchasing power terms would have more than that of USA today.

Tejas email me at
[email protected]

[Victor]

Aharam, suggesting that public sector defense companies may be the best after all because the private sector messed up in America sounds quite like the West saying coal is bad and green is good after they have already built up their industrial bases using primarily coal. Keeping companies like HAL around on life support wouldn't hurt the MICs of the West--we even buy our primary trainers from you guys.

[shiv]

PSUs will exist and continue to thrive in India for at least another 50 years by which time many of us will be dead. Wishing them away may make one feel better, but they ain't going nowhere very quickly. A brief understanding of why they exist would help. But since most people already blame Nehru and Congress for the fact that they exist, I am sure we can spend the next 50 years cursing Nehru, like Manu is blamed nowadays for something else.

Millions of Indians benefit from socialism in India. Socialism thrives in India at a fundamental level and there is democratic sanction for socialist policies. If your mother uses gas to cook at home, you are a beneficiary of socialist Indian cooking gas subsidy. If your father owns or runs diesel powered vehicles, he is benefiting from India's socialism. If you have studied in a kendriya vidyalaya, IIT, AIIMS, JIPMER, PGIMER, you are a beneficiary of India's socialist policy. If you or your family have fixed deposits in public sector banks currently offering 9% per annum returns, you are harvesting the manna of Indian socialism. If you have your lifetime's savings invested in tax free PPF savings, you have been earning interest in excess of 8 percent PA for decades. You will never get that security in any private bank anywhere in the western world. If you travel by rail in India you are using subsidies. Travel by bus, use the postal system, you are using subsidies. Indian PSUs are part of the same government sponsored gifts to Indians. Cursing PSUs alone is a fake and ignorant one sided mistake especially if you and your family have spent lives in India making full use of all the sops that GoI gives in the name of socialism. If you are less well off in India you benefit more from these goodies. A huge segment of the Indian middle classes benefit from this. That is why Indians have no intention of taking down a system that keeps them alive in favor of random jerk off remedies.

If you leave India after your dad paid for your education and never come back, you will not even know all this. You learn this only by living and working in India. And it is a mistake to imagine that those who live and work in India have no idea of what things are like abroad. A huge percentage are returnees from abroad. It is totally without merit to curse PSUs, Nehru and socialism without knowing how it touches your life. If one is merely ignorant it's one thing. But if one deliberately chooses to ignore facts - then its GIGO.

[Singha]

due to the diesel subsidy which affects road and rail transport, even mukesh ambani benefits in a lower price of goods.
everyone benefits from PM down whether they want to or not.

[Victor]

Socialism thrives in India at a fundamental level and there is democratic sanction for socialist policies.

No idea what this has to do with India's ability to defend itself without having to buy weapons and aircraft from countries like Bulgaria and Ukraine but whatever.

To the less-informed, it may come as a surprise to know that America too is a socialist country with the oldest democratic sancion for socialism including subsidized petrol, housing, education, health care, power, postal system, railways, farming, weapons manufacturing, car manufacturing and Social Security among other things. Another very socialist country is China and both are even more "socialist" than India which does not have a social security net for its poor and elderly.

So if India stays socialist for another 200 years its no skin off anyone's nose. However if it uses that "socialism" to justify wastage of national resources by pampering badly run companies, it is stupidity.

[shiv]

Socialism thrives in India at a fundamental level and there is democratic sanction for socialist policies.

No idea what this has to do with India's ability to defend itself without having to buy weapons and aircraft from countries like Bulgaria and Ukraine but whatever.

To the less-informed, it may come as a surprise to know that America too is a socialist country with the oldest democratic sancion for socialism including subsidized petrol, housing, education, health care, power, postal system, railways, farming, weapons manufacturing, car manufacturing and Social Security among other things. Another very socialist country is China and both are even more "socialist" than India which does not have a social security net for its poor and elderly.

So if India stays socialist for another 200 years its no skin off anyone's nose. However if it uses that "socialism" to justify wastage of national resources by pampering badly run companies, it is stupidity.

Oh absolutely no disagreement with that post except to point out that you said this earlier:

No, we desperately need to see private companies replacing HAL, GTRE, DRDO etc.

It ain't gonna happen. You can fuggedabahtit. Private sector in India will only complement PSUs and WILL NOT supplant them in the foreseeable future for any number of reasons. Anyone who believes otherwise will only continue to have frustrated rants in the name of patriotism and will not see his or her wish fulfilled. I am willing to have this statement carved in stone for future reference. I am neither wishing for it nor responsible for making it happen. I am saying what is and what will be. It is sheer ignorance to be unaware of the place of PSUs and socialist subsidies in India and come up with sweeping "solutions" that can never be implemented in India. It only exposes a deep ignorance of India pasted onto over-anxious patriotism.

And those PSUs currently have more aerospace manpower skills and infrastructure than any private sector player in India and I do not foresee any private player making a big dent on this for at least a a decade. Private industry in India will have to come up pari passu with PSU and they will have to cooperate and exploit each others' skills and strengths. The private sector in India will take 50 years to catch up with HAL, if at all. Unless they get government subsidies or they are allowed to export arms freely. That will be a political decision, not a pure economic decision.

Whether the US is socialist or not has no bearing on this. The most profound professorial knowledge of why and how things work in the US cannot be applied to India by a simple copy paste. Especially if one is disabled by an equally profound ignorance of India, or a superficial knowledge of what things were like in India "when I was in school and college."

[Victor]

The private sector in India will take 50 years to catch up with HAL, if at all. Unless they get government subsidies or they are allowed to export arms freely. That will be a political decision, not a pure economic decision.

In all likelihood, they will get govt subsidies and be allowed to export freely. I somehow doubt Ambani the bania would be throwing crores into developing an aerospace business without very good reason.

[abhishek_sharma]

That is exactly what I don't like-- govt subsidy for private profits. Only God knows how this causes "efficiency".

[shiv]

Take a look at this. HAL makes too many things. Much needs to be hived off. But we need private players who can do some of the following. Currently no Indian private player has proven capability in most of these fields.

This is made by the "Foundry and forge division' of HAL
http://www.hal-india.com/foundryandforgedivision.asp


Aerospace division


This is the Gas Turbine division


Accessories division


Engines division


Avionics divn

[shiv]

The private sector in India will take 50 years to catch up with HAL, if at all. Unless they get government subsidies or they are allowed to export arms freely. That will be a political decision, not a pure economic decision.

In all likelihood, they will get govt subsidies and be allowed to export freely. I somehow doubt Ambani the bania would be throwing crores into developing an aerospace business without very good reason.

Defence will only be side business for Ambani. He will enter commercial sector. If he does I wish him well. We need that too.

[member_22605]

+100 abhishekji and i don't see reliance or Tata or anyone else from any country, magically developing and manufacturing products on time without manpower and most of this manpower in India can only come from HAL or DRDO. Suppose reliance takes up the IJT and then the thing crashes say after 2 years of flying flawlessly, how will they rectify the problem with their higher salaries,superior management and project handling skills?
Aerospace is more than just big money and iron fisted management and it is very difficult for the pvt players to understand it without experience and that is where HAL/DRDO will always have an upper hand.
Cheers!

[Austin]

I think Ambani will put his hand into Aerospace Business where he can make good profits and these profits will come from Offset Programs that would inevitably go to Private sector since the PSU are heavily loaded and cannot take more.

So offset of MMRCA , other offset program in pipeline that now most defence deal carry that Ambani will pounce on using his contacts plus the other DPSU/DRDO will offload too. These many small program for many billion dollar project will mean regular income for the new business.

I dont think they will end up designing , developing new products for defence like say LM/Boeing does for Pentagon that dirty business with high technology risk , huge investment and needs decades of experience to get going , these dirty business will be handled by DRDO/HAL and other PSU