Location: Kharkiv, Ukraine

Website: http://www.hartron.com.ua/rus/contacts.html

Subordination: National Space Agency of Ukraine

Structure: Since restructuring in 1997, Khartron has consisted of 14 branches that constitute closed joint-stock companies. The following branches are located in Kharkiv: Khartron-Arkos, Khartron-Alfa, Khartron-Ekspress, Khartron-Inkor, Khartron-Elektrosvyaz, Khartron-Energo, Westron Joint Venture (60% owned by Westinghouse), Khartron-Sigma, Khartron-Plant, Elon-TT, and Khartron-Orbita. The following branches are in Zaporizhzhya: Khartron-Spark (design bureau), Khartron-Elektroavtomatika, Khartron-Violis, Khartron-Konsat, and Khartron-Ukom.[1,2]
[1] "Ukrainskoye AOOT 'Khartron' preobrazuyetsya v 14 AOZT," Agentstvo Praym-TASS, No. 393, 14 October 1997; in Integrum Techno, http://www.integrum.com/.
[2] Khartron Corporation Web site, http://www.hartron.com.ua/eng/dep.html. {Entered 3/5/2003 MJ}

Background: Initially known as OKB-692,[1] and later as NPO Elektropribor,[2] NPO Khartron has traditionally closely collaborated with the Pivdenne (Yuzhnoye) Design Bureau and Pivdenmash (Yuzhmash), and was the largest manufacturer of ballistic missile and space launch vehicle (SLV) guidance systems in the Soviet Union.[3]

Khartron may also have expertise in developing nuclear weapon command and control systems. According to Professor Yakiv Ayzenberg, former Khartron general director, the conceptual framework of the strategic weapon control system employed by the Russians is similar to the concepts his Kharkiv-based institute developed. Prior to the transfer of Ukraine-based nuclear warheads to Russia, Ayzenberg believed that an R&D facility similar to Khartron could develop codes that would block Moscow-initiated commands, should the President of Ukraine disagree with any action taken independently by Russia.[4,5,6]

Ukraine's independence and its subsequent abandonment of strategic weapons meant a sharp drop in Khartron's strategic weapon-related activities. In 1995 Khartron was established as a joint-stock company and underwent a first round of privatization,[7] following which the government of Ukraine still owned 74.56% of Khartron.[8] The remainder was split between Khartron employees, who held approximately 15%, and various Ukrainian financial institutions and citizens, who had about 10% of the shares.[9] Although sales of an additional 50% of enterprise stocks were planned on several occasions, all of these plans eventually were cancelled.

Sources:
[1] Stanislav Averkov, "Indoneziyskiy NLO byl sozdan v Dnepropetrovske," Biznes vremya, 19 April 2002; in Integrum Techno, http://www.integrum.com/.
[2] "Mnogorazovaya kosmicheskaya sistema 'Energiya - Buran'," in Kniga 'Raketno-kosmichskaya korporatsiya 'Energiya' imeni S.P. Koroleva: 1946-1996, 20 June 2001; in Integrum Techno, http://www.integrum.com/.
[3] "Frantsuzskaya 'Thomson' razrabotayet sovmestno s kharkovskim NPO 'Khartron' novuyu sistemu upravleniya poletami," Interfax, 2 September 1994; in Integrum Techno, http://www.integrum.com/.
[4] Kiyevskiye vedomosti, 15 January 1993, p. 8.
[5] Virginia Foran, "Ukraine's Creeping Nuclear Possession," NNN Bulletin, 30 May 1993.
[6] William C. Potter, "Ukraine's Nuclear Trigger," The New York Times, 10 November 1992.
[7] "Direktor kharkovskogo AO 'Khartron' o finansirovanii rossiysko-ukrainskikh kosmicheskikh issledovaniy," Russkoye byuro novostey, 17 June 1999; in Integrum Techno, http://www.integrum.com/.
[8] "Privatizatsiya-news," Biznes, No. 29, 16 July 2001; in Integrum Techno, http://www.integrum.com/.
[9] "Ukrainskoye AOOT 'Khartron preobrazuyetsya v 14 AOZT," Agentstvo Praym-TASS, No. 393, 14 October 1997; in Integrum Techno, http://www.integrum.com/.

Activities: Khartron has reportedly converted 95% of its production facilities to non-military purposes.[1] As a component of the former Soviet strategic weapons complex, Khartron is eligible for US nonproliferation assistance. In 1994, together with the US company Westinghouse, Khartron created the Westron joint venture specializing in the production of control systems for Ukrainian nuclear power plants (NPPs). Westron was the first joint venture set up with the use of Cooperative Threat Reduction (CTR) funds, and received $5 million in CTR monies.[2,3] Khartron was also able to attract foreign assistance from other sources. In 1993, the European Technical Assistance to the CIS (TACIS) program decided to fund Westron's bid to implement a project on monitoring the level and use of drinking water at the South Ukraine NPP.[4]

Khartron has also remained an active participant in the rocket industry, relying on its Soviet-era industrial relationships with enterprises currently located in Russia. As of July 2001, some 95% of Khartron's rocketry-related production was purchased by Russia.[5] Khartron is involved in the Rokot (conversion of SS-19 ICBMs into SLVs) and Dnepr (conversion of SS-18 ICBMs into SLVs) projects, and work on supply vessels for the International Space Station (ISS). Khartron's partners include NPO Mashinostroyeniya, Khrunichev, and NPO Lavochkina.[3] The Dnepr project is part of the Kosmotras (also referred to as Kosmotrans) joint venture, in which Khartron is a 12.5% participant. Other companies in the venture include the Pivdenne (Yuzhnoye) Design Bureau and Pivdenmash (Yuzhmash).[6]

Khartron has also been actively seeking foreign partners for projects not related to rocketry. In 1994, Khartron and the French firm Thomson-CSF (currently part of the Thales consortium) signed an agreement on developing an automated flight control system.[7] The equipment was to be International Civil Aviation Organization (ICAO) compatible and was to be used in both civil and military aviation, for the purpose of improving flight safety. Khartron hoped to eventually gain control of the joint venture.[8]

Khartron's fields of specialization also include automated control systems for various industrial applications. Between 1995 and 1998, Khartron was involved in the Monolit joint venture, established in cooperation with the Swedish-Swiss company ABB, which invested $25 million in the venture. The purpose of the venture was to produce control systems for Ukrainian NPPs. When the prospects for selling such equipment dimmed, the venture was closed.[9] In 1998, Khartron created an energy trading company, in conjunction with Enerhoatom. The company acts as the main seller of electricity to Kharkiv and the surrounding areas and pays the NPPs by providing them with automated reactor control equipment.[10]

Khartron's missile prowess has reportedly attracted the attention of countries of proliferation concern. Khartron General Director Yakov Ayzenberg reportedly visited Iraq in 1993 as a member of a Ukrainian delegation. The delegation was met by Brigadier General Naim Bakr Ali, the head of the missile development directorate of the Ministry of Defense of Iraq. The two sides signed a protocol under which Iraq was to receive components for surface-to-surface missiles and receive technical assistance in developing air defense systems, including gyroscopes for their guidance systems. In 1994, General Bakr came to Ukraine and signed a second protocol under which Khartron was to design four guidance systems, including two for multi-warhead systems. Ukraine was also to provide a so-called "clean room" required for the manufacture of sensitive electronic components. A key figure in the deals was Yuriy Orshanskiy, the honorary consul of Iraq to Ukraine. According to Orshanskiy, he has had contacts with Iraq since 1992 and visited the country 40 times. However, State Commission on the Military-Industrial Complex Head Volodymyr Horbulyn has denied the reports of Khartron's ties with Iraq. According to Horbulyn, as of 2001 Khartron was not involved in any dealings with Iraq, and he said that such rumors abounded whenever the issue of privatizing Khartron was raised.[3]
Sources:
[1] "Kharkovskoye PO 'Khartron' pochti polnostyu pereshlo na proizvodstvo nevoyennoy produktsii," UNIAN, 29 March-4 April 1999.
[2] Interfax, "Ukraine Business Panorama," 27 September-4 October 1999; in "Ukraine Business Panorama," FBIS Document FTS19991004001661.
[3]  Sergey Zgurets, "Ukraina ne pomogayet Iraku razvivat raketnyy potentsial. No v SShA uvereny v obratnom," UNIAN, No. 26 (166), 24 June 2001; in Integrum Techno, http://www.integrum.com/.
[4] "Ukraina predlozhila ES profinansirovat v ramkakh programmy TASIS okolo 30-ti proyektov povysheniya bezopasnosti AES," Interfax, 8 April 1996; in Integrum Techno, http://www.integrum.com/.
[5] "Privatizatsiya-news," Biznes, No. 29, 16 July 2001; in Integrum Techno, http://www.integrum.com/.
[6] "K 10-letiyu so dnya obrazovaniya Rosaviakosmosa," Vestnik aviatsii i kosmonavtiki, No. 001, 27 February 2002; in Integrum Techno, http://www.integrum.com/.
[7] "Spetsialisty Ukrainy i Frantsii sovmestno razrabotayut avtomatizirovannuyu sistemu upravleniya poletami," Biznes MN, No. 33, 7 September 1994; in Integrum Techno, http://www.integrum.com/.
[8] "Frantsuzskaya 'Thomson' razrabotayet sovmestno s kharkovskim NPO 'Khartron' novuyu sistemu upravleniya poletami," Interfax, 2 September 1994; in Integrum Techno, http://www.integrum.com/.
[9] "ABB zakroyet do oktyabrya 1998 g SP 'Monolit', samoye krupnoye iz trekh uchrezhdennykh na Ukraine svoikh sovmestnykh predpriyatiy," Agentstvo Praym-TASS, No. 117, 30 March 1998; in Integrum Techno, http://www.integrum.com/.
[10] "Kharkovskiy gorodskoy sovet svoim postanovleniyem podderzhal initsiativu AOOT 'Khartron' /Kharkov/ po sozdaniyu Kharkovskoy energeticheskoy birzhi," Agentstvo Praym-TASS, No. 274, 22 July 1998; in Integrum Techno, http://www.integrum.com/.

Archived Khartron Developments

1/29/2003: GOVERNMENT TO RETAIN CONTROLLING SHARE OF KHARTRON
On 29 January 2003, Ukraine's Cabinet of Ministers decided to retain 50% plus one share of Khartron's stock in government control for three years. According to State Property Fund First Deputy Chairman Mykhailo Chechetov, the decision was made in order to preserve the Ukrainian government's influence over Khartron, which is a unique enterprise.
["Khartron zakrepostili," Delovaya nedelya, 29 January 2003; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

1/9/2003: SENIOR KHARTRON OFFICIALS DEPART
ForUm reported on 9 January 2003 that a group of senior Khartron officials, including Marketing Director Aleksandr Bek and the Head of the Center for External Economic and Public Relations Sergey Salenko, left Khartron for the Investor joint stock company, a major commercial firm.
["Iz 'Khartrona' begut spetsialisty," ForUm, 9 January 2003; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

4/29/2002: WESTRON WINS CZECH CONTRACT
Zhurnal kompanyon reported on 29 April 2002 that the Westron joint venture won a contract to supply 40 emergency power supply devices for the Czech nuclear power plant in Temelin. The contract is to be fulfilled within two years.
["'Vestron' nachnet postavlyat avariynyye istochniki pitaniya dlya cheshskoy AES," Zhurnal Kompanyon, No. 16, 29 April 2002; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

4/13/2002: KHARTRON HOPES FOR 15% ANNUAL GROWTH
LIGA online reported on 13 April 2002 that the 2002-2004 development plan adopted by Khartron calls for a 15% annual production growth rate. At least 25% of the profits are to be invested back in the enterprise with the goal of introducing advanced production technologies. Khartron's priority areas were defined as rockets and space, energy (in collaboration with Enerhoatom and Ukraine's nuclear power plants), and railroads. Khartron's leadership reportedly believes a privatization would not be advantageous unless a strategic investor (defined as a firm that purchases Khartron products and would be willing to invest in expanding its production volume) can be found. Russian and Ukrainian industrial and financial conglomerates are viewed as the primary candidates.
["Khartron planiruyet yezhegodno uvelichivat obemy proizvodstva ne menee chem na 15%," LIGA online, 13 April 2002; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

3/11/2002: PRIVATIZATION BACK ON THE AGENDA
Biznes reported on 11 March 2002 that the State Property Fund is preparing to auction two thirds of state-owned Khartron shares, or nearly half of the total shares. This represents the third such offer, and in both previous cases, in 1999 and 2001, the auction was cancelled by the Ukrainian government. Potential buyers include the Russian Aerospace Agency (Rosaviakosmos) and Russian space firms. According to Khartron Marketing Director Aleksandr Bek, this time, in contrast to the earlier abortive privatizations, Russian buyers should be willing to purchase Khartron shares at nominal prices, with the condition that the profits from privatization be invested in Khartron. Whereas in 2001 Khartron's shares, worth 10 million hryvne [approximately $1.95 million as of 11 March 2002], were offered for 35 million hryvne [approximately $6.8 million], as of March 2002 Russian companies were no longer willing to pay such a price. Bek, therefore, believes that the best option would be to halt privatization until a strategic investor can be found.
["Privatizatsiya," Biznes, No. 10, 11 March 2002; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

2/1/2002: KHARTRON TO DEVELOP SOFTWARE
On 1 February 2002, Khartron and six other Kharkiv-based firms signed a contract with the US company McFadden & Associates on creating the Elite Software Products consortium. Under the terms of the contract, the Ukrainian companies will be engaged in developing software, while McFadden will be responsible for marketing. According to Khartron representatives, the company has been preparing to enter the software market for two years.[1,2]
[1]"Khartron zaymetsya novym delom," Delovaya nedelya, 8 February 2002; in Integrum Techno, http://www.integrum.com/.
[2]"S nebes na zemlyu," Biznes, No. 7, 18 February 2002; in Integrum Techno, http://www.integrum.com/. {Entered 3/5/2003 MJ}

1/10/2002: GENERAL DIRECTOR AYZENBERG RETIRES
ForUm reported on 10 January 2002 that Khartron General Director Yakiv Ayzenberg (born 1934) retired after over a decade at the top executive post of the company. The Vice President for Finances and Accounting Mykola Vakhno has taken over as acting director.[1] According to Fakty i kommentarii, following his retirement, Ayzenberg emigrated to Israel. The newspaper speculated that Ayzenberg might become involved in the Israeli defense industry.[2]
Sources:
[1] "Gendirektor 'Khartrona' ukhodit na pensiyu," ForUm, 10 January 2002; in Integrum Techno, http://www.integrum.com/.
[2] Igor Osipchuk, "Generalnyy konstruktor sistem upravleniya kosmicheskimi raketami akademik Yakov Ayzenberg emigriroval iz Ukrainy," Fakty i kommentarii, 12 February 2002; in Integrum Techno, http://www.integrum.com/. {Entered 3/5/2003 MJ}

7/4/2001: PRIVATIZATION STOPPED
On 4 July 2001, the Ukrainian State Property Fund stopped the planned privatization of 49.56% of Khartron stock. The stock auction was to have taken place on 23 July 2001.  The order to cancel it came from First Deputy Prime Minister Oleh Dubyna. Khartron Marketing Director Aleksandr Bek was displeased by what he called the government's "irresponsibility," and said that Khartron will make no further attempts to seek purchasers of its stock. Bek believes that the decision to cancel privatization was motivated by the opposition of the State Commission on the Military-Industrial Complex, and that only a large-scale stock sale will prevent Khartron from losing its scientific potential.[1] According to Bek, Khartron needs $50 million in investments to modernize the plant and introduce modern technologies.[2]
Sources:
[1] "Privatizatsiya-news," Biznes, No. 29, 16 July 2001; in Integrum Techno, http://www.integrum.com/.
[2] "Khartron zhazhdet investitsiy," Delovaya Ukraina, No. 44, 4 July 2001; in Integrum Techno, http://www.integrum.com/. {Entered 3/5/2003 MJ}

6/17/1999: AYZENBERG ON PRIVATIZATION POLICY
In an interview published on 17 June 1999, Khartron General Director Yakov Ayzenberg strongly criticized Ukrainian government policy toward Khartron, particularly concerning privatization. Ayzenberg gave the interview following the 7 June 1999 decision by the Ukrainian Cabinet of Ministers to retain 50% plus one share of Khartron's shares under government control. This effectively cancelled the planned sale of two packets of shares, with 24.78% of shares each, to the two Russian entities Khrunichev and Russian Aerospace Agency (Rosaviakosmos). This would have been a second round of privatization for Khartron, more extensive than the one carried out in 1995 when 25.4% of Khartron's shares were sold. According to Ayzenberg, as long as the Ukrainian government continues to retain the controlling packet of shares, Khartron has no hope of attracting foreign investment, which in turn threatens to doom the enterprise. Uncertainty in the Ukrainian nuclear energy sector has forced Khartron to look elsewhere for its survival. Ayzenberg believes that Khartron's position on the Russian missile and space market is more secure. Missiles using Khartron components include SS-18 and SS-19 intercontinental ballistic missiles, Proton and Tsiklon space launch vehicles. Replacing Khartron electronics with Russian ones would require a lot of time and money, so Russian aerospace firms will likely continue to rely on Khartron's services. Moreover, Ayzenberg says there is only one Moscow-based firm in Russia that could compete with Khartron [Ayzenberg is most likely referring to the Pilyugin NPTs AP, which also specializes in guidance systems]. However, Khartron will require outside investment to remain competitive, and Ayzenberg believes Russian firms, which already have long-standing ties with Khartron, are the best candidates. Although, according to Ayzenberg, unnamed US and German firms have expressed interest in purchasing Khartron stock.  Nevertheless, Ayzenberg believes that Ukraine ought to steer toward a closer economic relationship with Russia, and acknowledged that the privatization proposal was crafted with Russian entities in mind.
["Direktor kharkovskogo AO 'Khartron' o finansirovanii rossiysko-ukrainskikh kosmicheskikh issledovaniy," Russkoye Byuro Novostey, 17 June 1999; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

5/27/1997: HELMETS FROM KHARTRON
Agentstvo Posledniye izvestiya reported on 27 May 1997 that the Ministry of Internal Affairs of Ukraine approved the series production of firefighters' helmets for the ministry. Prototype helmets have already been successfully tested.
["Pozharniki dali 'dobro'," Agentstvo 'Posledniye izvestiya', 27 May 1997; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

1/17/1996: KHARTRON BEGINS PRODUCING CONTROL SYSTEMS FOR NPPS
Delovaya Ukraina reported on 17 January 1996 that the Westron joint venture, established by Khartron and Westinghouse, had started producing automated control systems for Ukrainian nuclear power plants. Such a system is already undergoing tests at the Zaporizhzhya NPP.
[Viktor Demenev, "V Kharkove nachalos proizvodstvo ASU dlya AES," Delovaya Ukraina, No. 3, 17 January 1996; in Integrum Techno, http://www.integrum.com/.] {Entered 3/5/2003 MJ}

12/18/95: ADMINISTRATION OF KHARTRON PLANT WILL PAY STRIKERS
Approximately 200 workers at the Khartron plant took part in a hunger strike, demanding back-wages. It was reported that as a result the factory administration began to pay the workers.
["Robitnyky Pozpochaly Goloduvannya A Dyrektor Raptovo Zakhvoriv," Holos Ukrainy, 18 December 1995, p. 4.]

	Updated September 2005