Category: 3. Business

Former U.S. Secretary of State Mike Pompeo has joined the advisory board of Ukraine’s leading defense company, renowned for its long-range drones capable of striking targets deep inside Russia, as a corruption investigation continues.

In an effort to enhance its international reputation, Fire Point is establishing a new factory in Denmark and bringing prominent industry figures on board. It also aims to expand its operations to produce battle-tested cruise missiles, with plans to more than double its current capacity.

However, public scrutiny remains intense during an ongoing corruption investigation. Fire Point’s executives insist they have nothing to hide and are operating under strict martial law protocols, even commissioning an independent audit to appease investigators. Critics, however, question the company’s opaque origins and the monopoly of its contracts with the Defense Ministry, and point to alleged links to President Volodymyr Zelenskyy’s notorious associate Tymur Mindich, who is implicated in a major corruption scandal.

“In general it’s good they are working on this,” said Iryna Terekh, Fire Point’s chief technology officer of the investigation. “We completely support, as a company, the fact that this investigation is happening.”

Terekh said Fire Point has commissioned a major international firm to conduct an independent audit of its pricing and production to quell concerns. The investigation by anti-corruption organizations, launched a year ago, is still ongoing, she said. “We will be waiting for the results to come.”

The Associated Press was given exclusive access to a factory in Ukraine where its cruise missile, known as the Flamingo or FP-5, is assembled. The AP was given access on the condition the exact location is not named, due the risk of Russian attacks.

Fire Point, which rose to prominence after initially being relatively unknown following Russia’s full-scale invasion of Ukraine in February 2022, now reports around $1 billion in revenue this year. It is also constructing a factory in Denmark to manufacture essential rocket propellent.

In the meantime, the company is forging ahead with plans to expand.

The company launched an advisory board and named Pompeo as a member on Nov. 12, executives told AP. “It’s a big honor for us,” Terekh said, speaking from the factory floor. “We decided that since we are growing into a big international company, we have to ensure we are following the clearest and best corporate standards.”

Another three individuals will join the board. “We are rising as a company and we want a wise adviser board to help us establish this work,” said Terekh.

U.S. Special Envoy to Ukraine Keith Kellogg also visited one of Fire Point’s factories during his last visit, executives said, in a visit that included other Ukrainian defense technology companies as well.

Building on the success of its deep-strike drone, the FP-1, which AP was granted exclusive access to view in August, the company is now planning to ramp up production of its cruise missiles. They are also in high demand among Ukrainian forces as Western missiles remain hard to access in sufficient quantities to debilitate Russian capabilities.

Fire Point has successfully tested Flamingo on the battlefield at least four times, company executives said. In late August it was used to strike an FSB base in Armiansk in the occupied Crimean Peninsula. This week, the missile was used to strike targets in the Russian city of Oryol. The company did not provide its current production capacity, citing security concerns.

Production is going according to plans, company executives said, without elaborating on precise figures for security concerns.

On the factory floor, dozens of hollowed hulls of missile frames lay scattered. These are made with carbon fiber, a material better suited to eluding Russian radars than aluminum, Maksym, the head of design told the AP. He spoke on condition that only his first name be used for security reasons.

Fire Point is a significant beneficiary of the so-called Danish model, a financing mechanism spearheaded by Denmark, in which foreign governments directly fund Ukrainian defense companies, rather than procuring weapons from their own industries to send as aid. A factory to produce solid rocket fuel for missiles, including the Flamingo, is being established in Denmark.

“They did a great job helping us to secure production of critical components,” Terekh said of Denmark’s support. “Our factory in Denmark is dedicated to solve a bottleneck with solid rocket propellent.”

But the company’s rapid rise has been marred by an investigation by Ukraine’s anti-corruption watchdogs.

Authorities are examining whether Fire Point inflated component prices or drone quantities in Defense Ministry contracts for its main weapon, the FP-1 drone, and are also scrutinizing potential links between the company and Mindich.

Anti-corruption agencies have said they were not investigating the Flamingo missile.

Lawmakers raised an issue with Fire Point because of its apparent monopoly over deep strike drones, its ability to garner lucrative contracts despite being relatively unknown, and obscurity over its ownership. Its legally listed owner is Yehor Skalyha, who maintains connections to the entertainment industry, just like Mindich.

Anti-corruption watchdogs have not released the findings of their investigation. Company founder Denys Shtilerman told AP that he is the majority owner, with Skalyha owning 2%.

Shtilerman said he has met Mindich on several occasions, but the company denies the business owner has any links to their company.

On Sunday, engineers from the company painted a pink flamingo on one Flamingo cruise missile whose purchase had been made by a crowdfunding campaign by a Czech organization, Weapons to Ukraine. Each missile costs approximately $500,000.

The amount was raised in two days, said Jan Polak, a member of the organization. The same organization managed to fund the delivery of a Black Hawk helicopter to Ukraine’s military intelligence, Polak said. “We feel that they are fighting for us,” he said of his organization’s reasons for funding the procurement of missiles to strike Russian targets.

The current design of the Flamingo missile is a compilation of old Soviet weapons and new techniques. Engines were sourced from old Soviet jets, for example.

Testing and fine-tuning is a constant process, Maksym said. “As of now we are still doing training launching, because our rockets were manufactured just six months ago. Right now, we are training, but we are training on objects in the territory of Russia and Crimea,” he said.

Workers conducted a mock run of a launch with a missile, this one painted black, that will be used in a future mission, he said. Workers drove in a truck that concealed the weapon.

“We are studying, doing all we can to hit targets as far as we can,” he said, adding that finding ways around Russian radar systems and electronic warfare remained an ongoing challenge. “We are learning from each launch to work on mistakes.”

Story Continues

By Satoshi Sugiyama

TOKYO (Reuters) -When 22-year-old Hinako Mori moved to Tokyo last year, she chose to work part-time at Don Quijote, a major discount retailer, for one main reason – it doesn’t care what colour her hair is.

Sporting ash blonde locks ​with light and dark blue streaks when interviewed, Mori likes to dye her hair different colours every six weeks.

It was very different when she worked at a major ‌Japanese convenience store chain that mandated black or dark brown hair.

“One time, I dared to dye my hair blonde. But the next day, I was told to either wear a wig or use spray-on ‌colour,” said Mori. “It was very stressful.”

RETAILERS RELAX RULES

Squeezed by Japan’s tight labour market, more companies are this year following in the footsteps of Don Quijote, a Pan Pacific International group company. It relaxed its rules around hair and nail polish three years ago and says nearly a quarter of its employees now have brightly coloured hair. When brown is included, 55% of its employees have non-black hair.

Drugstore chain Fuji Yakuhin, for example, has done away with a plethora of rules for non-pharmacist employees. It ⁠now allows any hair colour, nail art, heavy makeup,‌ as well as all kinds of rings, whereas previously only wedding rings were permitted. Similarly, the operator of Tokyu Store supermarkets has dialled back restrictions on hair colours, hair styles, accessories, nail polish and piercings.

Japan Inc has been gradually relaxing its dress codes ‍over the past two decades. The catalyst was a 2005 Ministry of Environment “Cool Biz” campaign that encouraged the ditching of jackets and ties to cut down on air conditioning costs during summer.

Since then, summer dress codes have become more casual, uniforms are no longer mandated for many department store employees and white gloves for taxi drivers were made optional.

The newest changes around hair colour, nail ​polish and accessories are predominantly taking place at smaller companies facing more acute labour shortages than bigger firms and don’t have as much leeway to offer competitive wages.

But some ‌big listed firms have relaxed dress codes this year. Japan Airlines last week joined subway operator Tokyo Metro and domestic budget carrier Skymark Airlines in allowing staff to wear sneakers to work.

LABOUR CRUNCH PRESSURE

Japan, a rapidly ageing country with limited immigration, has seen its working-age population tumble 16% since a peak in 1995, according to OECD data. That’s set off fierce competition for staff.

Two-thirds of Japanese firms have said the labour shortage is having a serious business impact, a Reuters survey shows. It was the leading cause of Japanese bankruptcies in April-September, with the number of failures hitting their highest level in 12 years for a first-half period, according to Tokyo Shoko Research.

That’s ⁠given young people more power, at least with regard to part-time work.

Two-thirds of students believe ​they should be able to choose their appearance when working part-time, according to an April survey by ​job information and recruitment firm Mynavi. One-third said they had withdrawn job applications because of dress codes at potential employers.

“Students aren’t just looking for work experience or to earn money; they seem to be seeking something more in their jobs – a sense of freedom or comfort,‍” said Shota Miyamoto, a researcher at ⁠Mynavi. But he added they did not expect the same of full-time work.

While Japan may be loosening up, some aspects of personal appearance that have become common in the West, like multiple or facial piercings, are still a bridge too far for many companies. Workers with tattoos -⁠ art traditionally associated with the yakuza in Japan – are generally asked to conceal them so as not to intimidate customers.

The latest changes have also yet to permeate many traditional big-name Japanese companies. Sumitomo Mitsui ‌Banking Corp, for example, says it doesn’t have policies about hair or nail polish, but it’s generally understood among employees that their ‌personal appearance shouldn’t create waves.

(Reporting by Satoshi Sugiyama; Editing by Edwina Gibbs)

By Satoshi Sugiyama

TOKYO (Reuters) -When 22-year-old Hinako Mori moved to Tokyo last year, she chose to work part-time at Don Quijote, a major discount retailer, for one main reason – it doesn’t care what colour her hair is.

Sporting ash blonde locks ​with light and dark blue streaks when interviewed, Mori likes to dye her hair different colours every six weeks.

It was very different when she worked at a major ‌Japanese convenience store chain that mandated black or dark brown hair.

“One time, I dared to dye my hair blonde. But the next day, I was told to either wear a wig or use spray-on ‌colour,” said Mori. “It was very stressful.”

RETAILERS RELAX RULES

Squeezed by Japan’s tight labour market, more companies are this year following in the footsteps of Don Quijote, a Pan Pacific International group company. It relaxed its rules around hair and nail polish three years ago and says nearly a quarter of its employees now have brightly coloured hair. When brown is included, 55% of its employees have non-black hair.

Drugstore chain Fuji Yakuhin, for example, has done away with a plethora of rules for non-pharmacist employees. It ⁠now allows any hair colour, nail art, heavy makeup,‌ as well as all kinds of rings, whereas previously only wedding rings were permitted. Similarly, the operator of Tokyu Store supermarkets has dialled back restrictions on hair colours, hair styles, accessories, nail polish and piercings.

Japan Inc has been gradually relaxing its dress codes ‍over the past two decades. The catalyst was a 2005 Ministry of Environment “Cool Biz” campaign that encouraged the ditching of jackets and ties to cut down on air conditioning costs during summer.

Since then, summer dress codes have become more casual, uniforms are no longer mandated for many department store employees and white gloves for taxi drivers were made optional.

The newest changes around hair colour, nail ​polish and accessories are predominantly taking place at smaller companies facing more acute labour shortages than bigger firms and don’t have as much leeway to offer competitive wages.

But some ‌big listed firms have relaxed dress codes this year. Japan Airlines last week joined subway operator Tokyo Metro and domestic budget carrier Skymark Airlines in allowing staff to wear sneakers to work.

LABOUR CRUNCH PRESSURE

Japan, a rapidly ageing country with limited immigration, has seen its working-age population tumble 16% since a peak in 1995, according to OECD data. That’s set off fierce competition for staff.

Two-thirds of Japanese firms have said the labour shortage is having a serious business impact, a Reuters survey shows. It was the leading cause of Japanese bankruptcies in April-September, with the number of failures hitting their highest level in 12 years for a first-half period, according to Tokyo Shoko Research.

That’s ⁠given young people more power, at least with regard to part-time work.

Two-thirds of students believe ​they should be able to choose their appearance when working part-time, according to an April survey by ​job information and recruitment firm Mynavi. One-third said they had withdrawn job applications because of dress codes at potential employers.

“Students aren’t just looking for work experience or to earn money; they seem to be seeking something more in their jobs – a sense of freedom or comfort,‍” said Shota Miyamoto, a researcher at ⁠Mynavi. But he added they did not expect the same of full-time work.

While Japan may be loosening up, some aspects of personal appearance that have become common in the West, like multiple or facial piercings, are still a bridge too far for many companies. Workers with tattoos -⁠ art traditionally associated with the yakuza in Japan – are generally asked to conceal them so as not to intimidate customers.

The latest changes have also yet to permeate many traditional big-name Japanese companies. Sumitomo Mitsui ‌Banking Corp, for example, says it doesn’t have policies about hair or nail polish, but it’s generally understood among employees that their ‌personal appearance shouldn’t create waves.

(Reporting by Satoshi Sugiyama; Editing by Edwina Gibbs)