Putin's war effort hit as factory closes due to unpaid bills
Optron-Stavropol in southern Russia has been forced to close after failing to be paid the full amount for military tech it supplied to the Russian state
Vladimir Putin's invasion plans for Ukraine have been hit with another setback as one of Russia's key war effort factories has been forced to shut down due to overwhelming debts.
Optron-Stavropol, situated in the southern city of Stavropol, was a crucial player in the production of microelectronics for aircraft and military equipment, supplying power semiconductors for MiG, Su, Tu, Sukhoi Superjet, and MS-21 aircraft.
However, the factory has had to halt operations due to losses amounting to almost $2million from fulfilling state orders and accumulating debts, according to The Moscow Times. It came as health fears were raised about Donald Trump as viewers spotted a clue in his clothes.
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The losses are reportedly due to the Russian government's reluctance to pay the market price for military tech - sometimes offering less than the actual cost of production, reports the Express.
Optron-Stavropol CEO Pavel Bondarenko disclosed that despite a diode costing 3,600 roubles ($46) to manufacture, the Ministry of Defence would only pay 2,600 roubles ($33)
Consequently, Optron suffered significant losses while waiting for almost $3m in unpaid orders. This resulted in the cessation of production in March, followed by the freezing of its accounts by June as arrears began to accumulate due to salaries, taxes, and utility bills.
Optron is unable to independently set prices, as pricing is determined by the military under the law on state defense orders. Other manufacturers have also reported losses due to similar practices.
The company's inability to independently set prices has led to its downfall, with other Russian manufacturers also suffering losses due to similar constraints.
Despite nine official meetings with the Ministry of Industry and Trade and a thorough investigation by the Prosecutor General's Office, no misconduct has been found in the company's operations.
However, the reality within the company walls tells a different story. The struggling factory has been in turmoil since 2016, and in 2021, it issued a warning about a possible shutdown.
In international news, US President Donald Trump has reaffirmed his commitment to NATO's mutual defense clause amid concerns over Russian hostility while attending the alliance's summit in the Netherlands.
Before arriving in the Netherlands on Tuesday, there were doubts cast by Mr. Trump regarding America's adherence to Article 5 of the NATO treaty, which requires member states to come to each other's aid if attacked. However, by Wednesday, President Trump declared his support for the agreement.
"That's why I'm here," Mr. Trump stated during his meeting with Dutch Prime Minister Dick Schoof. "Why would I be here?".
Additionally, NATO members have committed to one of President Trump's key demands: a promise to boost their defense spending, a move that he has been advocating for years.
"I've been asking them to go up to 5% for a number of years," Mr. Trump remarked, predicting that this development will make headlines.
