Swords Into Vodka; Kalashnikov, a legendary symbol of the declining small-arms trade, turns to new lines of work.

Byline: John Ness (With Bryon MacWilliams in Izhevsk and Stefan Theil in Berlin)

If he had designed an athletic shoe, Lt. Gen. Mikhail Kalashnikov wouldn't have to be hustling so hard at his age. Kalashnikov's gift for guns made him a hero of the Soviet Union many times over, and his 85th birthday was feted by nostalgic Russians last week. But his legendary AK-47 is so sturdy that old models have created a permanent glut, contributing to a worldwide decline in the sale of new small arms. That, in turn, is forcing gun makers into new lines. Kalashnikov has lent his name to umbrellas, penknives, watches, golf tees and two different vodkas. One is Russian, and Kalashnikov was recently in London to unveil a British version. "What can you do?" says Kalashnikov, a reluctant entrepreneur in an aging uniform, speaking in his gritty hometown of Izhevsk. "These are our times now."

Since the end of the cold war, small-arms makers around the world have felt the pinch. While sales of high-tech military hardware are soaring, the world's estimated $7.4 billion market for small arms--rifles and handguns--remains flat, largely immune to innovation, yet fought over by a growing number of increasingly desperate competitors. The Geneva-based Small Arms Survey reported in its 2004 survey that the world market is in decline. Romanian gun maker Romarm recently began making washing and sewing machines. Izhmash, the Russian company that made the Kalashnikov, now sells machine tools. The world's leading handgun company, Smith & Wesson, last year launched a decidedly feminine line of bedding featuring pillows with cowgirl patterns on them. It lasted only a few months.

Kalashnikov is the most poignant symbol of the decline. When the Soviet Union began to crumble in 1989, the legendary gun maker was 70 years old, rich in official honors and titles, but ill prepared for the market forces about to sweep Russia.

Kalashnikov makes nothing from his gun designs. The Soviet Union had licensed more than a dozen countries to manufacture his weapons. After 1991 post-communist middlemen began selling stock out of old Soviet armories, and today there are an estimated 100 million AK-47s in circulation. The rifle is featured on the flags of Mozambique and numerous jihadist groups. Knockoffs are everywhere; General Kalashnikov and Izhmash accused the United States this summer of buying pirate AK-47s for the Iraqi police force. And authentic AK-47s remain dirt cheap. "Militarily, the guys who are buying are poor and they're insurgents ...