TIME: Almanac 1993/TIME Almanac 1993.iso/time/120991/1209002.000

Text File | 1992-08-28 | 3.9 KB | 89 lines

                                                                                WORLD, Page 36

SOVIET UNION

Strategy for Survival


How one Soviet enterprise uses barter, stock offerings and joint
ventures to keep its assembly lines running


    Moving at a snail's pace past webs of black cables and
dangling automatic wrenches, the bumper-to-bumper column of
olive green military trucks crawls down an assembly line that
stretches for more than half a mile. As the vehicles move along,
workers clamber aboard to tighten bolts, check wiring, start
engines. On a parallel belt a few yards away, other men and
women are putting the finishing touches on similar civilian
models, painted in red, orange and gray. The two production
lines at the Kama automotive factory (KAMAZ) in Naberezhnye
Chelny, 600 miles east of Moscow, used to turn out close to
150,000 heavy-duty trucks a year, monopolizing the Soviet market
and equaling the annual production in the U.S.

    All too often these days, however, the lumbering columns
grind to a halt. The problem: lack of parts. The workers, who
are paid according to how many trucks they can build, complain
about the delays and often have to work on weekends to keep up
production quotas -- and income.

    That pattern is repeated in thousands of factories
struggling to break free from the grip of a centralized system.
As the republics and regions attempt to assert control over
their natural resources and manufacturing facilities, a chaotic,
dog-eat-dog economy has developed in which enterprises must fend
for themselves, scouring the entire country for parts and
supplies.

    Because of its size, KAMAZ would seem to be particularly
vulnerable. The complex was designed in the 1970s to be the
largest heavy-duty-truck manufacturer in the world, with 18
separate plants, including foundries and metal-pressing works
-- all to be serviced by partners in the 15 former Soviet
republics on which KAMAZ depends for 40% of its components.

    But Naberezhnye Chelny, a factory city of half a million
people, of whom more than one-third labor for KAMAZ, appears to
be weathering the economic storm fairly well. Keeping the
workers supplied with food and consumer goods is as much a
priority as securing parts for the plant. A chain of
factory-owned stores sells refrigerators and television sets,
winter clothes, lingerie, lipstick and shampoo -- all long
absent from Moscow stores -- at controlled prices. KAMAZ has
developed its own strategy for survival, using the barter
tactics of the bazaar and the hustle of Wall Street. Thus the
factory swaps new trucks in direct exchange for rubber tubing
or electrical parts or sheet metal; the vehicles also figure in
second- and third-hand exchanges, being traded for copper
wiring, for example, which is bartered for bread, which in turn
is exchanged for meat.

    The company is creating its own kind of capitalism. Under
the leadership of president Nikolai Bekh, 45, it became the
first Soviet firm to offer shares to private domestic and
foreign investors and has shrewdly reimbursed many suppliers
throughout the country with blocks of stock. KAMAZ also makes
loans to key suppliers struggling to stay afloat.

    What KAMAZ desperately needs is to break into
international markets, where, as Bekh puts it, "we are not
wanted." In October the company signed a fifty-fifty joint
venture with the American diesel manufacturer Cummins Engine Co.
to produce, for hard-currency sale, a low-priced truck with a
state-of-the-art Cumengine built at Naberezhnye Chelny.

    Such enterprise has made Bekh a force to be reckoned with
in Moscow: he has warned the Kremlin as well as the leadership
of the Russian Federation against meddling with the budding
sector of private entrepreneurs. Since KAMAZ is keeping its
assembly lines moving, even in today's troubled times, Bekh's
words ought to carry considerable weight.


By John Kohan/Naberezhnye Chelny.