Yakunin Slams Freight Car Maker

Russian Railways chief executive Vladimir Yakunin on Friday lashed out at Uralvagonzavod for its quality control standards, a day after Russia's largest maker of rail freight cars accused the state railway monopoly of buying fewer units than stipulated in a supply contract. The increasingly heated dispute between the companies, both 100 percent controlled by the state, comes as Russian Railways, or RZD, struggles to cope with falling revenues from weaker cargo volumes. RZD was loss-making in January for the first time since it was created in 2003. "Just yesterday ... a train went off the rails because a side frame broke on a car made in 2007. It just goes to show how disorderly the oversight is at [Uralvagonzavod] and how awful the technology is," Yakunin said in Novosibirsk, Interfax reported. "The management of the factory should, first of all, focus on running that business and only then try to lay the blame for their own headaches on other people's shoulders," Yakunin said. Uralvagonzavod said Thursday that it would have to halt its freight car assembly line in April -- potentially leaving more than 11,000 people out of work -- because RZD was refusing to buy any more units. A spokesman for the Sverdlovsk region plant, which also makes tanks and oil cisterns, said he thought that Yakunin was just looking for a pretext to reduce his company's orders. "We've significantly improved our production and oversight of our technological processes with European equipment," Uralvagonzavod spokesman Boris Mineyev said. "The Russian wagon-making has its problems, but they are common to all producers, and it's not a reason to refuse to buy from us." According to a copy of the contract obtained by The Moscow Times, Uralvagonzavod was supposed to supply RZD with 13,600 cars for 22.7 billion rubles ($672 million) this year. An RZD spokesman said the monopoly would buy 8,800 cars, while Uralvagonzavod said RZD would buy only 4,000 cars and 2,000 cisterns from them. A competing supplier to RZD said Friday that the state railways had already used the bad-quality argument to buy fewer cars. "Russian Railways has ordered 30 percent less from us this year," said Artyom Ledenev, spokesman for Transmashholding, RZD's biggest supplier. Gudok, RZD's official corporate newspaper, said March 2 that the orders for locomotives from Transmashholding were reduced in part because of quality issues, citing Sergei Palkin, the head of RZD's technical auditing center. Transmashholding cut production by 30 percent and was working four-day weeks because of the weaker demand. A Russian Railways spokesman insisted that the main reason for not ordering as many cars this year was money rather than quality. "We haven't got enough money to buy as many cars as we planned," the spokesman said. Yakunin also sought to comfort his company's disenchanted suppliers. "If the economic situation gets better, we will increase our investment program," he said. The company said it would decrease its investment program by 34 percent, to 262 billion rubles ($7.8 billion), down from 400 billion rubles the government approved in November.