November 22, 2024

Russia Sells Stake in Maker of AK-47s

The company, Izhevsk Machine Works, has made AK-47s, which are the world’s most distributed firearm, since shortly after World War II. And despite years of deep financial crisis, the company has been seen as a crown jewel of Russia’s military industrial complex.

Izhevsk returned to profitability in recent years in large part because of robust sales to American civilians.

The government had been searching for investors to share the burden of modernizing the sprawling machine shops and integrating the business, known as Izhmash, with other small arms makers as part of a broader overhaul of military enterprises, an important sector in the Russian economy.

In the deal announced Monday, the two Russian investors are buying 49 percent of Izhmash and four related enterprises that make pistols, cartridge cases and machine tools for the firearms industry for 2.5 billion rubles ($78 million).

The investors are Aleksei Krivoruchko, a part owner of suburban trains linking Moscow to its airports, and Andrei Bokarev, who has a background in Siberian coal mining.

The controlling stake of 51 percent will remain with the state-owned conglomerate, Russian Technologies, an umbrella organization President Vladimir V. Putin established in 2007 to revive the military industry, in part by attracting investors.

“Private and state partnerships are an effective model to reform enterprises,” Sergei V. Chemezov, the Russian Technologies chief executive, said in a statement Monday.

The sale culminates the transformation of a Russian military enterprise that adapted to a civilian clientele, and also testifies to the money to be made in the gun market in the United States, where ownership laws are more lenient than in many other countries. Because China and former members of the Soviet Union make so many bootlegs of Kalashnikov assault rifles, producing the gun of choice for a broad spectrum of people who carry firearms was never good business for Izhmash until sales to relatively wealthy American buyers picked up.

Kalashnikov-pattern rifles are colloquially known as AK-47s — a name derived from the Russian word for automatic and the surname of the inventor, Gen. Mikhail T. Kalashnikov, as well as the year the first prototype appeared.

In an interview in 2012, the former factory director, Maksim Kuzyuk, described sales in the United States as integral to the business. About 40 percent of the factory’s output went to gun buyers there, about the same number as bought by the Russian military. The United States is the world’s largest importer of small arms, bringing in about $1.2 billion worth of guns in 2011, according to the Small Arms Survey, a standard reference of weapons trading globally.

Under a business plan announced along with the sale on Monday, the gun maker said it expected to quadruple its annual profit to $770 million, from about $193 million last year, and to triple output to 1.9 million guns annually by 2020.

In the deal, the government bundled five firearms manufacturers and related companies including Izhmash into a new structure that will be called Kontsern Kalashnikov, or the Kalashnikov Concern. These include Izhmekh, a pistol maker, as well as Koshkina, an engineering company making cartridge cases and machine tools for the food canning industry.

Government sales in Russia are also expected to rise. The American civilian rifle sales helped Izhmash to retool its factory for a new version for the Russian military, called the AK-12, which will be available next year.

Article source: http://www.nytimes.com/2013/09/24/business/global/russia-sells-stake-in-maker-of-ak-47s.html?partner=rss&emc=rss

Anti-Surveillance Activist Is at Center of New Leak

Late Wednesday, Mr. Greenwald, a lawyer and longtime blogger, published an article in the British newspaper The Guardian about the existence of a top-secret court order allowing the National Security Agency to monitor millions of telephone logs. The article, which included a link to the order, is expected to attract an investigation from the Justice Department, which has aggressively pursued leakers.

“The N.S.A. is kind of the crown jewel in government secrecy. I expect them to react even more extremely,” Mr. Greenwald said in a telephone interview. He said that he had been advised by lawyer friends that “he should be worried,” but he had decided that “what I am doing is exactly what the Constitution is about and I am not worried about it.”

Being at the center of a debate is a comfortable place for Mr. Greenwald, 46, who came to mainstream journalism through his own blog, which he started in 2005. Before that he was a lawyer, including working 18 months at the high-powered New York firm Wachtell, Lipton, Rosen Katz, where he represented large corporate clients.

“I approach my journalism as a litigator,” he said. “People say things, you assume they are lying, and dig for documents to prove it.”

Mr. Greenwald’s writings at The Guardian — and before that, for Salon and on his own blog — can resemble a legal brief, with a list of points, extended arguments and detailed references and links. As Andrew Sullivan, a frequent sparring partner and sometime ally, put it, “once you get into a debate with him, it can be hard to get the last word.”

While Mr. Greenwald notes that he often conducts interviews and breaks news in his columns, he describes himself as an activist and an advocate. But with this leak about the extremely confidential legal apparatus supporting the Foreign Intelligence Surveillance Act, he has lifted the veil on some of the government’s most closely held secrets.

The leak, he said, came from “a reader of mine” who was comfortable working with him. The source, Mr. Greenwald said, “knew the views that I had and had an expectation of how I would display them.”

Mr. Greenwald’s experience as a journalist is unusual, not because of his clear opinions but because he has rarely had to report to an editor. He began his blog Unclaimed Territory in 2005 after the news of warrantless surveillance under the Bush administration. When his blog was picked up by Salon, said Kerry Lauerman, the magazine’s departing editor in chief, Salon agreed that Mr. Greenwald would have direct access to their computer system so that he could publish his blog posts himself without an editor seeing them first if he so chose.

“It basically is unheard of, but I never lost a moment of sleep over it,” Mr. Lauerman said. “He is incredibly scrupulous in the way a lawyer would be — really, really careful.”

The same independence has carried over at The Guardian, though Mr. Greenwald said that for an article like the one about the N.S.A. letter he agreed that the paper should be able to edit it. Because he has often argued in defense of Bradley Manning, the army private who was charged as the WikiLeaks source, he said he considered publishing the story on his own, and not for The Guardian, to assert that the protections owed a journalist should not require the imprimatur of an established publisher.

Mr. Greenwald said he has had to get up to speed in the security precautions that are expected from a reporter covering national security matters, including installing encrypted instant chat and e-mail programs.

“I am borderline illiterate on these matters, but I had somebody who is really well-regarded actually come and physically do my whole computer,” he said.

That computer is in Brazil, where Mr. Greenwald spends most of his time and lives with his partner, who cannot emigrate to the United States because the federal government does not recognize same-sex marriages as a basis for residency applications.

Mr. Greenwald grew up in Lauderdale Lakes, Fla., feeling like an odd figure. “I do think political posture is driven by your personality, your relationship with authority, how comfortable are you in your life,” he said. “When you grow up gay, you are not part of the system, it forces you to evaluate: ‘Is it me, or is the system bad?’ ”

By the time Mr. Greenwald was studying law at New York University, “he was always passionate about constitutional issues and issues of equal justice and equal treatment,” said Jennifer Bailey, now an immigration lawyer with a nonprofit organization in Maine, who shared a tiny apartment with Mr. Greenwald in the early 1990s.

She emphasized that his passion did not translate into partisanship. “He is not a categorizeable guy,” Ms. Bailey said. “He was not someone who played party politics. He was very deep into the issues and how it must come out. He was tireless and relentless about pursuing this. Nobody worked longer hours.”

As Mr. Greenwald tells it, the last decade has been a slow political awakening. “When 9/11 happened, I thought Bush was doing a good job,” he said. “I was sucking up uncritically what was in the air.”

His writing has made him a frequent target from ideological foes who accuse him of excusing terrorism or making false comparisons between, for example, Western governments’ drone strikes, and terrorist attacks like the one in Boston.

Gabriel Schoenfeld, a national security expert and senior fellow at the Hudson Institute who is often on the opposite ends of issues from Mr. Greenwald, called him, “a highly professional apologist for any kind of anti-Americanism no matter how extreme.”

Mr. Sullivan wrote in an e-mail: “I think he has little grip on what it actually means to govern a country or run a war. He’s a purist in a way that, in my view, constrains the sophistication of his work.”

Ms. Bailey has a slightly different take. Because of his passions, she said, “he is just as willing to make enemies of anybody.”

Article source: http://www.nytimes.com/2013/06/07/business/media/anti-surveillance-activist-is-at-center-of-new-leak.html?partner=rss&emc=rss

Media Decoder Blog: Time Warner in Talks to Spin Off Majority of Magazines

3:53 p.m. | Updated Time Warner is in early talks to shed much Time Inc., the country’s largest magazine publisher and the foundation on which the $49 billion media conglomerate was founded, according to people involved in the negotiations.

The company is currently in talks with the Meredith Corporation to put most of its magazines, including People, InStyle and Real Simple into a separate, publicly-traded company that would also include Meredith titles like Better Homes and Gardens and Ladies’ Home Journal.

The deal being discussed is one of several options Time Warner is exploring in order to reduce its troubled publishing unit, said these people who could not discuss private conversations publicly.

As part of the agreement, existing shareholders in Time Warner and Meredith would receive stakes in the new company, which would essentially amount to a women’s magazine company, led by People, the popular celebrity magazine and crown jewel of Time Inc.’s slate of 21 publications.

Time Warner would continue to control news-based magazines, Time, Fortune, Sports Illustrated and Money. Meredith did not express interest in including those titles and Time Warner believed those magazines can fit into its journalistic efforts at CNN and CNNMoney.com, said a person briefed on the discussions.

A Time Warner spokesman declined to comment. News of the talks was first reported by Fortune, a magazine owned by Time Inc.

The talks come weeks after Time Inc. announced it would lay off 6 percent of its global work force of more than 8,000 employees during an industrywide decline in subscription and advertising revenue. Overall revenue at Time Inc. has declined roughly 30 percent in the last five years.

Time Warner’s history is rooted in Time, the weekly news  magazine founded by Henry Luce in 1923 on which the giant media conglomerate got its start. But lately the publishing company’s sluggish performance has stood in sharp contrast to the strong performance at Time Warner’s cable channels like HBO, TBS and TNT.

In the last several years, the company has tried to trim some assets unrelated to the television and movie production business. That included shedding AOL, Time Warner Cable, the Warner Music Group and the Time Warner Book Group.

Jeffrey L. Bewkes, chief executive of Time Warner, has denied reports that he would sell Time Inc. He frequently talks about the division’s strongest brands essentially as cable television channels and has aggressively mandated that Time Inc. make its magazines available on digital devices.

“They’re printing pages right now, but they’re also on electronic screens with moving pictures,” Mr. Bewkes said in a previous interview. He added that “a cable channel like TNT or TBS” is “pretty much the same as what People or Time or InStyle should do.”

The company’s exploration of a deal that would allow it to keep male-oriented titles like Sports Illustrated, Time and Fortune would let it maintain its name and historical roots.

“Time’s name is on the door. I think Jeff feels it would be better to hang onto it and not sell it for what would be a low price,” said a person briefed on Mr. Bewkes’s thinking who could not discuss private conversations on the record.

Jack Griffin, a former chief executive at Meredith, served a brief and stormy reign as chief of Time Inc. before Laura Lang took over in January. Ms. Lang, previously the chief executive of the digital advertising company Digitas, stepped in at a tumultuous time after Mr. Griffin was forced out after less than six months on the job. She hired Bain Company, a consultancy based in Boston, to assess the business.

Many of  Time Inc.’s magazine titles have been struggling as more readers have been reading material online, and newsstand sales have dropped. Even titles like People, which long helped financially bolster Time Inc.’s less lucrative titles, has suffered. People’s newsstand sales declined 12.2 percent in the second half of 2012 compared to the year before, according to figures released last week by the Alliance for Audited Media. Its advertising pages dropped by 6 percent in 2012 compared to the year before, according to the Publishers Information Bureau.

Last month, Ms. Lang said she was cutting staff 6 percent, or about 480 people. Magazines like Time and People asked employees to take buyouts and said they would lay people off if they did not meet those numbers. Wednesday is the last day for employees to raise their hands for buyouts.

On a conference call with analysts last week, John K. Martin, chief financial and administration officer at Time Warner, said that “very challenging industry conditions weighed” on the company’s results.

The talks come as News Corporation prepares to sever its publishing assets, including newspapers like The Wall Street Journal and The New York Post, from its more lucrative entertainment division, which includes the cable channels FX and Fox News. The separation is expected to be complete this summer.

Christine Haughney and David Carr contributed reporting.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/13/time-warner-in-talks-to-sell-off-majority-of-magazines/?partner=rss&emc=rss