Izhmash, official maker of the AK and Saiga rifles, filed for bankruptcy!!!


Izhmash, possibly the world’s most famous arms manufacturer, has filed an application for bankruptcy with the Russian courts. Pravda reports

Izhmash, the pride of the nation’s defense industry, may prove to be an unprofitable enterprise. Udmurtia’s Court of Arbitration will look into the financial documents of the group of enterprises of Izhmash Concern. If reasons for bankruptcy are unveiled, Russia’s largest maker of firearms will have to be reorganized. >

Izhevsk owns the designs and trademarks of many different guns including:

  • AK-47, AK-74, AKM and AK-100 series.
  • SVD Dragunov sniper rifle.
  • Tigr rifle (civilian SVD).
  • Saiga rifles and shotguns.

I asked Max Popenker, well known author and owner of world.guns.ru, about the situation. Max told me that the upper management of the company has been absolutely useless for years. He thinks eventually the government will save the company, but he is not optimistic about its future.

If you were thinking about buying a Saiga rifle or Saiga-12 shotgun. I suggest you buy it right now.

Many thanks to Jay for alerting me to the situation.

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Steve Johnson

Founder and Dictator-In-Chief of TFB. A passionate gun owner, a shooting enthusiast and totally tacti-uncool. Favorite first date location: any gun range. Steve can be contacted here.


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  • Vak

    I think I speak for the whole gun enthusiast community when I say :

    “NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOo !”

    • http://www.thefirearmblog.com Steve

      Vak, my feelings exactly !

  • SpudGun

    Sounds ripe for the taking. If the Russians don’t step in, I wonder if ‘The Freedom Group’ will make a bid?

    It does seem mighty strange that one of the world’s most successful firearms manufacturers is going under.

  • Kurt

    This company is a typical relic of the Soviet system, a GM on steroids. Huge, backward, inefficient, and probably operating at a tiny percentage of its obsolete capacity. Not only is this unsurprising, one wonders how they’ve managed to keep it going so long. It’s not even a real company as we understand it, but the remains of a government bureaucracy/welfare organization. Unfortunately, nobody could buy this company and make a go of it – the whole enterprise (and the thinking of most of the people in it) would be such a mess that rational reform is impossible. Mr. Popenker knows what he’s talking about.

    Too bad, but that’s what happens when everything is under state control, and a shining illustration of why capitalism is such a great thing.

  • http://rexopolis.blogspot.com Rex

    If it does flop, what happens to the licenses? While I’ve no doubt you’re correct that Mr. Popenker knows what he’s talking about when it comes to this situation, I can only hope that, I dunno, some Hope and Change can leak over to Izhevsk…

  • SpudGun

    I wonder what will happen with the licensing agreements and intellectual property rights?

    I think what I’m try to say is, would it be possible for AKs to be built from scratch in somewhere like Tennessee?

    The irony of the most iconoclastic tool of Communism and global terrorism being built and advertised as ‘Made in the USA’ would be kind of groovy.

    • http://www.thefirearmblog.com Steve

      SpudGun, I think this is one company the freedom group will not be able to get their hands on!

  • Erik

    I respect Mr. Popenker’s opinion however I must offer this, there is no news about this bankruptcy on the official news site of the Russian Federation, there is no news about it on the Izhmash webpage (updated today even), and the rag that published the story, Pravda.ru, is little more than a tabloid masquerading as a real news source. Not that the official news would be much better, but I am going to adopt a wait and see approach here.

    http://www.itar-tass.com
    http://russiatoday.com/

    There is nothing on either of those sites about it. Again, wait and see IMHO.

  • jdun1911

    Steve posted a video on Izhmash manufacturing plant few months back. To me it looks very efficient well run factory.

    Izhmash does not lack the experience, knowledge, or tools to complete in the world market. However what they do lack is the willingness to change with the times and probably a better marketing department. That’s what killed them.

    In the old Soviet days, the AK was given away or sold at below cost. Who wouldn’t like free guns? When capitalism enter mother Russia, they couldn’t sale it below cost and have to complete with AR.

    Izhmash modernized their factory but didn’t modernized their products and marketing department. Izhmash should have made a modernize version of the AK similar to Robinson XCR. It would at the very least allow them to complete in the world market.

    BTW The Freedom Group went bankrupted and I don’t believe in bailouts.

  • http://www.zelcustom.com Michael B

    There’s a private equity group that’s wildly discounting nationalization risk, right now.

  • bullzebub

    what happends with patents and trademarks when a company goes bankrupt? this could be a good thing if its as bad as kurt is saying…

  • jdun1911

    bullzebub,

    The bankrupted still own all their patents and trademarks. With that said the banks or creditors might have first dibs on them depending on the loans.

  • Mark

    Probably not the right time to ask such question, but what happened to these plans:
    http://www.thefirearmblog.com/blog/2008/12/14/izhmash-will-launch-new-ak-line-in-2009/
    ?

    • http://www.thefirearmblog.com Steve

      Mark, acually I asked Max about them. he said a minor update, like rails added, nothing major.

      i bet its not gonna happen now

  • NoneMoreBlack

    I’m not sure about your advice to buy now. There will certainly be interruptions in manufacturing, but once all the dust has settled and some company in China or wherever has the toolings and patents, prices will probably fall below their current level.

  • redmanlaw

    Wow. Capitalism is not for everyone.

  • subby

    Who bets the Russian government will step in once some US entrepreneurs start nocking on their door? An american made Ak?

  • Matt Groom

    What?! You mean that Socialist economic models will never succeed no matter how profitable the industry or desirable the product?! You don’t say!

    Look, if they can’t make money selling firearms, AKs no less, in the kind of political climate the world’s largest gun market is experiencing right now, that points to one thing and one thing only; bad management and a obsolete corporate culture. I look forward to AKs being produced in the good old US of A where the one industry that has never gotten or needed a bail out continues to thrive.

  • Chandan

    Izh’s bankruptcy will not make any difference to the AK market cause overall Izh hardly produces 10 to 20% of the world’s AKs, largest being Norinco only guys gonna take a hit from its winding down will be Russia and Venezuela, whereas excellent Ak clones are made by Arsenal INC its knowhow taken frm a Bulgarian firm, that very supplied around 100000 AKs to Indian Army in around 1990 to fight Kashmir insurgency.

  • Clodboy

    A company called “Molot” in Ukraine actually produces an improved version of the Saiga shotgun, called the Vepr 12, which offers modernized features like picatinny rails and a magwell, although it seems to be hard to find in the US -though that may change once they realize the opportunity of a growing market niche for AK-derived shotguns.

    They also make a line of rifles (basically their versions of Izhmash’s Saigas, as well as a few semi-automatic RPK clones with fake drum mags), atleast some of which are imported by Robarms.

  • jdun1911

    American AK clones are overpriced. It cost almost the same as an AR.

  • http://Taurus45ACP.com Darth AkSarBen

    From what I have read, the AK-47 was never patented. It was a joint effort in a “State” republic that did not patent the design. Hence, the AK-47 and similar design made all over the world. Could also be made in Kentucky just as well. There is, after all, not a lot of complicated mechanisms in it. It is made from a stamped receiver and rails with a simple action that is reliable as hell.

  • http://backyard-safari.blogspot.com Ernst Krenkel

    Just a short comment: Izhmash has not filed an application for bankruptcy! This application was filed by another firm (probably someone who waits for Izhmash to pay him?). On 7th October will be the first court hearing. And we will see what the court has to say.

    • http://www.thefirearmblog.com Steve

      Ernst, that interesting. Thanks for the info.

  • http://backyard-safari.blogspot.com Ernst Krenkel

    Just a short notice: The court said today that Izhmash is not bancrupt.
    More here:

    http://backyard-safari.blogspot.com/2009/10/izhmash-ist-nicht-pleite.html

    Best regards,

    E. K.

    • http://www.thefirearmblog.com Steve

      Ernst, thanks. Will post on the blog shortly.

  • Peter

    If Izhmash makes AK 47/74/AR15 pistols around $400 in the states, they will sell like hot cakes & also the hi-cap mags for Saiga rifles and shot guns. I would make platform interchangable with the AR, I would think people would buy to have both AK & AR together.