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Inside 'Satan's' Lair: The Lock-Tight Ukrainian Rocket Plant At Center Of Tech-Leak Scandal


Yuzhmash officials scoff at the report linking North Korea's Hwasong-14 ICBM to the rockets they produce in Dnipro.

DNIPRO, Ukraine -- Some of Ukraine's most highly classified military secrets lie within the 4-meter-high, razor-wire topped walls that ring an otherwise nondescript compound on the edge of this gritty industrial city.

Little gets in or out (aside from a reporter's notebook) of one of the world's most storied and notorious rocket-design-and-manufacturing complexes.

Access to the rare visitor to, not to mention employees of, the Yuzhnoye design bureau and Yuzhmash machine-building plant within is granted only after extensive security checks by at least two state security agencies. Even then, entrance is ultimately left to the discretion of the armed soldiers who guard the facilities' gray metal gates.

It's the type of obsessive security that raises questions about how this, of all places, has been alleged to be the source of missile-engine-technology leaks to one of the world's most notorious regimes.

Yet, as people around the globe watched in horrified fascination as North Korea conducted recent missile tests that raised the specter of nuclear war, this complex located 450 kilometers southeast of the Ukrainian capital, Kyiv, found itself at the center of a major geopolitical scandal.

When each test surprisingly seemed to improve on the last, experts wondered how Pyongyang's ballistic-missile program had advanced so far, so quickly. Then came the bombshell: a report published on the front page of The New York Times that pointed the blame at this Ukrainian complex.

Citing a study by the London-based International Institute for Strategic Studies (IISS), as well as classified assessments by U.S. intelligence agencies, the Times wrote that North Korea had "probably" acquired high-performance, liquid-propellant RD-250 rocket engines on the black market from none other than Yuzhmash, where they were made for decades until their production ceased in 2001.

It's a scoff-worthy suggestion to many of the 16 Yuzhnoye and Yuzhmash representatives and scientists with whom RFE/RL spoke during a visit to the complex earlier this month.

"It's a joke!" says Volodymyr Tkachenko, Yuzhmash associate general director. He says he laughed aloud when he saw the reports, "because really, it's crazy, it's funny."

Gaining access to the Yuzhmash factory is no easy matter.
Gaining access to the Yuzhmash factory is no easy matter.

Booming Start To Post-Soviet Slump

Yuzhmash, opened as a car-manufacturing plant in 1944, was transformed into the Soviet Union's top-secret rocket-building factory in 1951. In 1954, the Yuzhnoye design bureau opened within the factory walls to collaborate with Yuzhmash. The companies lured hundreds of talented physicists, engineers, and machine designers from across the Soviet Union to what was then a closed city.

They enjoyed great success in the decades that followed, designing and producing rockets for the Soviet Union's intercontinental ballistic missile (ICBM) and space programs. Among them were the massive SS-18 missile perhaps better known by its NATO-given name, the "Satan" missile, and the Tsyklon-2 and Tsyklon-3 space launch vehicles. Powering those and others was the 1960s-era RD-250 engine and later variations of it.

The factory's efficiency prompted Soviet leader Nikita Khrushchev to boast in 1960 that it was producing rockets "like sausages."

But following the one-two punch of the end of the Cold War and the collapse of the Soviet Union came a steep decline.

"In Soviet times, we were of course in high demand, because of our great expertise...and government contracts due to the Cold War," Stanislav Yus, the 80-year-old Yuzhnoye chief designer and architect of many of the Soviet Union's most menacing missiles, tells RFE/RL.

ALSO READ: When Liberty Met 'Satan'

Output fell 85 percent in 1986 to a devastating 30 percent by 1992, according to a Washington Post report at the time.

After Ukraine declared independence in 1991 there was hope that the company would shift quickly into the consumer market, Yus says, because "we managed to make rockets cheaper than the U.S. and with great technical performance."

For instance, Yuzhnoye tried to repurpose SS-18 missiles for space missions, packing them with "peaceful payloads," says Oleksandr Mashchenko, Yuzhnoye first deputy general designer and general director for organization and technical support.

"Unfortunately, we never began mass production. There was simply no demand," Mashchenko complains in an office where diagrams of Yuzhnoye-designed rockets adorn the walls.

Yuzhmash struggled to adapt after the collapse of the Soviet Union, Oleksandr Mashchenko says.
Yuzhmash struggled to adapt after the collapse of the Soviet Union, Oleksandr Mashchenko says.

The factory slashed its combined 50,000-strong workforce significantly. (Yuzhmash, which had 40,000 employees at the end of Soviet times, today has roughly 7,000 employees, while Yuzhnoye, which had around 10,000 in the late 1980s, now has 5,412, officials said.)

Crimea Annexation And War

In the years following, success came in fits and starts while the companies tried to recast themselves as modern, commercial rocket makers able to compete with the world's best.

It was trudging along when, in March 2014, Russia annexed Crimea and fomented a separatist conflict in eastern Ukraine. Russia's aggression in Ukraine led to nearly all ties between the two countries being severed, and what Mashchenko describes as a once "strong" partnership being "thrown to the wayside."

Yuzhmash General Director Serhiy Voit told workers in January that annual revenue had fallen to a quarter of what it was before 2014, Reuters reported.

And some workers' days had been cut from five to three or fewer, while others hadn't been paid in months, confirms Volodymyr Sokolov, Yuzhmash chief engineer and first deputy general director.

The North Korea Report

Then came the IISS North Korea report. Michael Elleman, its American author, who told RFE/RL in August that he oversaw the dismantling of Soviet-era missiles in Russia and Ukraine two decades ago, claimed the North Koreans had likely modified the RD-250, a two-chamber engine, to create single-chamber versions.

His conclusions were based mainly on North Korean photographs of missile engines that were ground-tested in September and March and flight-tested on the Hwasong-12, an intermediate-range rocket, and the Hwasong-14, an ICBM designed to reach the U.S. mainland, in May and July, respectively.

As part of his analysis, Elleman posited that Yuzhnoye and Yuzhmash employees might have been motivated to sell the rocket technology to Pyongyang because the factory, which sits barely 150 kilometers from the battlefields of eastern Ukraine and the country's porous border with Russia, had "fallen on hard times" in recent years.

Elleman wrote that "almost certainly hundreds, if not more" spare RD-250 engines are stored at the Dnipro complex, and perhaps also at warehouses in Russia. The New York Times report mentioned this, but it emphasized that Yuzhmash was the probable origin of the engines.

Elleman supported his conclusion by citing the fact that two North Korean spies had been active in Ukraine.

Six years ago, the two had tried to steal missile secrets from the Ukrainian complex. The Ukrainian Security Service caught the spies red-handed as they photographed fake rocket-engine design documents in a sting operation set up after a Yuzhnoye employee they had attempted to bribe notified the authorities.

The spies, 56-year-old Ri Tae Gil and his partner, Ryu Song Chol, 46, are currently held at a prison in the central Zhytomyr region and are set to be released in September 2018, according to a separate New York Times report.

Ukraine has pointed to the arrest and conviction of the spies as evidence that it is capable of securing its missile secrets.

'It Makes No Sense'

Yuzhmash and Yuzhnoye officials say there are many reasons why North Korea would be unable to obtain physical rocket-engine technology from their factory.

Tkachenko, the Yuzhmash general director associate, says there simply are not "hundreds" of RD-250 engines being stored on the factory grounds, as Elleman alleged. Stockpiling them, he adds, would be "silly."

"Economically speaking it makes no sense...to make extra engines and store them. It's not economically feasible," Tkachenko says.

Sokolov, chief engineer and first deputy general director at Yuzhmash, says simply that "the number of engines correlates directly to the number of engines ordered."

Inside Yuzhmash's main rocket-assembly hangar, known as Shop 97, and its enormous rocket stress-testing facility on October 3, RFE/RL saw no RD-250 engines, nor were there any visible in several other buildings viewed by this reporter. RFE/RL was unable to enter all of the dozens of buildings that make up the complex.

Only a handful of other engines were seen. They included a completed RD-170 occupying the massive assembly floor, along with sections of launch vehicles for Antares, Zenit, and Tsyklon-3 and -4 rockets, some with engines intact.

A total of 233 RD-250 engines were made here before 2001, but only for use in rockets supplied to Russia, Ukraine's acting space agency chief, Yuriy Radchenko, told journalists during a press conference in August.

If It Ain't Broke, Why Fix It?

Even if Pyongyang had somehow acquired RD-250 engines, it would be extremely difficult for North Korean engineers to modify the two-chamber engine into a single-chamber one, contends Oleh Lebedev, Yuzhmash deputy general director and production director.

Drawing a hard, vertical line through a two-chamber engine he had sketched on a notepad to emphasize his coming point, Lebedev, with anger rising in his voice, asks rhetorically, "What sense does it make to take a unique engine that has suffered no failures and change it so dramatically?"

Volodymyr Sokolov (left) and Oleh Lebedev say the Korea report has not hurt Yuzhmash's business.
Volodymyr Sokolov (left) and Oleh Lebedev say the Korea report has not hurt Yuzhmash's business.

Independent experts with whom RFE/RL spoke afterward said it was a valid point; the RD-250 and its variations have a stellar performance record. Many said it was much more likely that the North Koreans were inspired by the Soviet-era engine designs, and managed to create their own, similar engines based on public images and documentation of the RD-250, including the Russian design patent for it, widely available since the 1980s.

"The concept and configuration [of the RD-250 engine] are so thoroughly public that anyone could have captured all the details that matter (aside from manufacturers' blueprints) just from the patents, museums, and photographs (perhaps taking a few measurements with a ruler while at the museum)," George Herbert, an independent missile and nuclear analyst, wrote in comments to RFE/RL.

Still, even with photos or visual examination, "you'd really want to see blueprints or other documents," said Joshua Pollack, the Washington-based editor of The Nonproliferation Review and a senior research associate at the Middlebury Institute of International Studies. "We only have fragmentary knowledge about this, but consider: When [North Korea] spies came to Yuzhnoye in 2011, what did they want? To photograph a document," Pollack added, referring to the two spies currently imprisoned in Zhytomyr.

"Rocket engines are finicky things. You don't just piece them together," John Isella, a former NASA engineer who now works as U.S. representative for Yuzhnoye in Dnipro, explained. He said his colleagues in the industry had an adage that explains the difficult nature of rocket-building: "It's not a surprise when the rocket doesn't work; it's a surprise when it does work."

Interestingly, there are also two full-scale, single-chamber model engines similar in some aspects to the RD-250 on display at the engineering and design schools of two Dnipro universities. Photographs of those could have been easily obtained, but it is not known if North Korea had done so. At any rate, Lebedev and his colleagues stressed, these were never produced by Yuzhmash, and the displays were merely "mock-ups."

'A Scarecrow'

While Lebedev admits that the IISS report has been "a scarecrow for everyone, including our personnel," he remains confident that the company's business partners are on its side in the controversy. "Our international colleagues understand that our work and security is solid."

In fact, Yuzhnoye and Yuzhmash officials say, things are looking up.

Sokolov says new contracts are helping to stabilize Yuzhmash. The company expects growth between 1.5 and 3 percent over the next year, according to Sokolov. Meanwhile, Yuzhnoye has hired 500 new employees, including 200-250 straight out of Dnipro's engineering schools, over the past year, according to Mashchenko.

Already this year there have been two successful launches of the European Space Agency's Vega rocket, which included parts designed by Yuzhnoye and made by Yuzhmash.

The companies are looking forward to at least one more rocket launch this year. An Antares rocket designed and built in partnership with American aerospace manufacturer Orbital ATK is set to launch before 2018 to resupply the International Space Station.

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