CROSS-COUNTRY ABILITY

You have to trust my word: there is real growth of industrial production in our country. And if you still don't believe me you can just come up to any car parked in the street and touch one of its tires. The design bureau at the plant has been designing new tire models for quite a while already, because the times when the only quality parameter of a wheel was its durability are long gone

CROSS-COUNTRY ABILITY

Do you remember the opening of Gogols «Dead Souls»? The poem starts with two fellows looking at Chichikov's carriage and contemplating: «Look at this, now thats a wheel! What do you think, would it make it to Moscow if it had to?» They finally decided that the wheel probably would make it to Moscow. At the same time, their conclusion was that Chichikovs wheel could never hold up all the way to Kazan.

Lately I've noticed that I keep staring at automobile tires and smile like crazy when I see my new good friends with KAMA written on them. And every time I imagine this picture. I come up to a huge «KamAZ» or a new «Lada 10», kick the tire with the toe of my shoe and announce to the teamster:

— I don't think it is going to make it to Kazan.

— Yes it is, — automatically answers the driver, and knocks on his head while cautiously looking at me: «Hey man, are you nuts or something?»

— The tires will make it, — I continue in an instructive tone. — And the longer the stopway, the less is the fuel consumption.

The driver glances at me once again, jumps behind the wheel and speeds away, splashing water from the puddle all over my pants. I just stand there and follow him with my eyes, because I can see that his tires have minimum aquaplaning effect, which means that he will make it to Kazan just fine.

IDIOTS AND ROADS

I feel rather awkward reminding the reader about the two historical plagues of our great country. However, the roads in Russia are becoming better and better. Moreover, in Tatarstan they are amazingly good. You can travel on highways at 140-160 km/h throughout almost the entire republic. If the car allows it, you can do even more. Drivers coming in the opposite direction would always give you a friendly warning with blinking headlights if there is a Traffic Police inspector hiding in the bushes ahead with a radar gun. By the way, Traffic Police in Tatarstan are fun guys. They obviously have plenty of daredevils around. Once you see one of them waddling towards you with a kind, almost fatherly smile on his face, you feel compelled to reach for the wallet.

As for the first problem, there are only some improvements in view. The most important factor is that we have started to doubt that this is an inherent quality for the Russian people. Now it is essential to make sure that this doubt turns into a firm belief. Unfortunately, the recurrences that sometimes occur make us very sad.

CRAFTY FIGURES

When at the end of the year 2000 the growth of production in Russia amounted to 7%, the Russians treated this figure quite ironically. Many were even cynical — why not 27% or, for example, why couldnt it be even 107%? They were saying, yeah, we know, the government just keeps writing, and it doesn't matter what the figure is — 1007% would be just fine too. This logic is not hard to understand. An ordinary citizen always confuses growth of production with growth of bills in his personal wallet. In the meanwhile, this would be an indicator of a very different economic trend — growth of consumption, and not of production.

Unlike the growth of consumption of sausage, of a new dress or of a trip to the seaside, growth of industrial production cannot be felt directly, with the means of the five senses that the nature gave to us. Production growth can be evaluated only on the conscious level; moreover, this idea can be grasped only upon having performed a certain number of mental exercises. Which sometimes can be tiring, especially when there is enough to worry about anyway. You shouldn't take it personally, I am judging by my own experience. I had to travel to the other end of the world to jump-start my own thinking process and to realize that this 7 percent is not an irrelevant value intended for speeches pronounced from high tribunes.

DISGRACEFUL PAST

The city of Nizhnekamsk has a big tire plant. In April 2003 the plant will celebrate 30 years of making tires for passenger cars, and the 25th anniversary of the day when the first truck tire was manufactured there. During this time, the plant provided with tires literally millions of big and small cars. However, for many years growth of industrial production interested the Nizhnekamsk Plant management only from the standpoint of growth of personal consumption. Radik Ilyasov, General Director of JSC «Nizhnekamskshina», honestly admitted that during the times of planned economy the plant had a certain production plan, the state simply picked up the produced goods, i.e. the tires, and the plant didn't have to worry about where they went later on and who was purchasing them. If the plan was implemented the management would get the next award or a promotion which eventually led to further awards and promotions, while workers would get bonuses, this also was pleasant in all respects. All domestic economy was built on the idea of Pavlovs conditioned reflex: do you trick and get the feed.

This disgraceful humiliation was over when we finally moved on to market economy. This is when the producers suffered from such an indignity that they could not have imagined even in their worst nightmare. Suddenly it turned out that their product (which means their hard labor and themselves) was not needed.

Do not get me wrong, car tires are always in demand. However, a modern tire is a rather complex and multi-component structure. At the same time, producers of the raw materials and accessories were in the same bewildered state as the Nizhnekamsk plant. Consequently, they stopped supplying the resources that are needed in order to produce all those components and to put them together into a ready product. The problem was aggravated by the fact that the price offered for the ready tires was so low that it would have been more reasonable to take the tires out of the warehouse and drown them in the Kama River nearby.

NAIVE ELECTORATE

Actually, the situation in Nizhnekamsk at the beginning of the 90's was not that different from the rest of the country. Maybe the tire plant in Nizhnekamsk was hit by the market economy a bit more hard than the average in Russia. At the time, there were certain reasons for opening the plant in Nizhnekamsk. After the discovery of big Tatar oil fields at the end of 40s, the state had to develop them. The idea was to build a petrochemical production facility in the nearest proximity from the oil. According to the plan, somebody had to make automobile tires out of the rubber that was eventually produced from petrochemicals. We don't have cars? We'll build them! Soon the automobile industry giants VAZ and KamAZ were built rather close to the site. Everything was logical and functioning smoothly as long as the flows of raw materials and finished products were managed by the all-mighty Gosplan (State Plan). All of a sudden, Gosplan disappeared. Its former building was occupied by the State Duma. This was when the Nizhnekamsk voters mandated their State Duma senator to lobby a law ensuring that their tire plant starts operating to full capacity and that they get their wages. You shouldn't laugh. We all were very naive back then.

BRAKING DISTANCE

At first, the Nizhnekamsk Plant was kept afloat by the quality of their products. There were 11 tire plants in the country, and Nizhnekamsk is the youngest of them. All of them at some point generously shared with Nizhnekamsk their experience and human reccources. The result was a modern (for the time being) plant, with the newest equipment and the most advanced (again, for the time being) technologies. They raised a generation of their own specialists who were highly esteemed both in Russia and overseas. However, there was no way to maintain the existing position in the international market without expanding the range and improving the quality of the products. According to the General Director Radik Ilyasov, the plant only slightly reduced the volume of production even in those tough times. «We managed to find the right solutions,» — says Radik with a smile.

Finally, the privatization process started and everyone started looking for investments. The Nizhnekamsk Plant could rightfully be nothing but proud of its products, so they applied directly to the leading manufacturers in their industry. The plant started negotiations with the world-renowned leaders of tire production, such as «Continental», «Michelin», «Pirelli», «Bridgestone» etc. The negotiations were not very easy. For example, after a round of professional discussions with one of the Nizhnekamsk experts the Western counteragents would say as if nonchalantly: «You are such an experienced manager (or designer, or financier), a specialist of your caliber could definitely work at our company». The Nizhnekamsk specialists were very well aware of what was going on. These major Western companies were quite satisfied with the quality of Nizhnekamsk production, while labor, even highly skilled labor, is much cheaper in Nizhnekamsk. If a «Michelin» plant worker was offered a hundred-dollar salary, he would immediately lodge a complaint with the Labor Union. The matter might go as far as resignation of the Cabinet of Ministers. Nevertheless, the negotiations with Western investors were going rather smoothly, agreements on principal issues were reached and the discussion was at the final stages. Then the August 1998 crisis hit like a bolt from the blue.

The Western partners diffidently shrugged their shoulders, meaning to say: «Dear colleagues, you personally are just fine with us, but unfortunately you live in such an unpredictable country! Don't take it personally, but today we invest our corporate resources in your company and tomorrow your country will announce default. And we can kiss our money good-buy. Anyway, the best of luck to you and please bear no ill will.»

ACCOUNTING OF GROWTH

Of course, there was no way not to bear ill will. However, the lesson of market economy did not go in vain. This is when the Nizhnekamsk tire producers found an investor that was not somewhere on another continent but here, in their native Tatarstan. In July of 2000, «Tatneft» became a shareholder of «Nizhnekamskshina» Plant. Although there is no such thing as too much money, it was decided to open a credit line. As a result, before the end of the year and during the next year of 2001 the volume of Nizhnekamsk production grew by more than one million tires. Against the background of the total annual volume of production amounting to approximately 8-9 million tires this leap was quite substantial. Other domestic producers were rather taken aback by such agility of their Nizhnekamsk colleagues.

You can easily calculate that the rate of growth of industrial production at one plant employing 14,000 workers (which together with family members of the tire-makers pretty much means one third of the entire population of Nizhnekamsk) exceeded 10%. This is even more than the all-Russian average of 7% declared by Michael Kasyanovs Government. Moreover, the Nizhnekamsk plant produced perfectly real tires that anyone can touch and make sure they actually exist, rather some abstract 10%.

Naturally, this spare million of tires was not produced just to look at it. The entire «spare» million was bought from the plant along with the remaining eight something million of Nizhnekamsk tires. These millions of tires provided «shoes» for automobiles and tractors, and in most cases, these vehicles were made in Russia. But cars also were not manufactured just to look at them. Since they were being made, this means that they were being bought. Cars are made out of steel. Steel is made out of ore. And so forth. Therefore, there really was an actual growth of industrial production in Russia.

Too bad that we cannot organize a tour of the facilities for each of the ones that doubt this growth. Which means that you have to trust my word: there is real growth of industrial production in our country. And if you still don't believe me you can just come up to any car parked in the street and touch one of its tires. This tire actually exists. And chances are that this tire was made in Nizhnekamsk, because the local tire plant has been a confident leader in this industry branch in Russia for many years already.

LOAD OF DEBTS

The investment resources provided by «Tatneft» substantially helped the plant. But they were used for the most urgent necessities, for working assets, procurement and other current expenses. «Nizhnekamskshina» is a Joint Stock Company and no other entity has a legal right to intervene into its corporate policy. The more so since the tire-makers don't have any arrears in current payments due to the federal and republican budgets. But during the ten years when the Russian economy was ruled by natural exchange bashfully called by a foreign term «barter», the amount of budget debt grew to such astronomic proportions that if the Nizhnekamsk guys had to repay it today they could just as well lock the plant up and hang a note on the door: «Everybody went home because the company is bankrupt». The Governments of Russia and of the Republic of Tatarstan restructured those old debts, breaking them into installments to be paid out in several stages during the next 4-5 years. Therefore, in addition to current payments the plant has to repay the old liabilities. At the same time, the plant is now able to sign contracts with deferred payments. The company has a good reputation and counteragents accept these conditions.

All over sudden, Western companies became interested again. However, this time the Nizhnekamsk managers are fully aware of their true value and use this knowledge in negotiations. The company was granted the International Quality Management Standard Certificate. In other words, right now nobody is speaking about cheap labor and relocating of Western production lines to the plant. If you want to work with «Nizhnekamskshina» you have to invest in new technologies. «Pirelli» agreed to these conditions and signed an agreement with the Nizhnekamsk Plant.

Now the main goal of the plant is to make sure that the truck tires comply with the world standards (passenger car tires are not a problem in this respect), and to maintain the current rates. The automobile world changes so fast that in the tire business today you can't afford even the smallest lag, as it would mean falling behind the leaders forever.

In automobile terms, if so far «Nizhnekamskshina» has been going up a steep hill in first gear, now the peak is close and it is time to shift gears.

INVENTING THE WHEEL

The design bureau at the plant has been designing new tire models for quite a while already, because the times when the only quality parameter of a wheel was its durability are long gone.

At the beginning of the 70's, when the plant was being built, there was a revolution in the tire science. That was the time when diagonal symmetry wheels were replaced with the experimental radial symmetry. In the radial symmetry tires stiffening ribs encircle the inner tube at the right angle to the stiffening ribs that go along the surface of the tire. The thing is that at high speeds the tire changes its round shape. The so-called cone effect skews the wheel and eventually the car itself to the side, and you can imagine what this can lead to at a speed exceeding 100 km/h. By the way, importance of the tire as one of the most important elements of the car is obvious from the fact that every tire is marked with its own number, just as the body and engine of the cars.

The technology for Nizhnekamsk radial tires was initially provided by «Pirelli». The first in-house tire design was created at the plant in 1992, during the hardest times for the country. At that time the «KamAZ» designers were working on a new four-wheel drive truck for the Army (later this model became the first one in the «KamAZ Mustang line»). The car manufacturers came to «Nizhnekamskshina» and to the Moscow Tire Industry Research Institute with an offer to design a new extra-durable wheel for the truck. Nizhnekamsk won the tender and since that time the new tire has been traveling both to the hottest war zones and on the route of the famous «Paris — Dakar Rally».

Now the plant designers work together with their colleagues from «Pirelli» developing a radial all-still cord tire of the next generation. The international requirements are very strict, so they have their work cut out for them. They have to consider not only safety, but also the noise level, environmental safety and a whole number of other factors. At the same time, the price component is also important, because in the world markets tires of the leading manufacturers have the odds from the start because their brands are already well-known. Aside from all the aforementioned parameters, the new tire designed by Nizhnekamsk experts will have another quality unique for Russian-made tires: a car with a flat tire would be able to keep going for another 300 km at 80 km/h.

By the way, in the West spiked tires with cross-country ability are hardly ever used. The climate and roads there are a little bit different. The Nizhnekamsk plant makes high quality spiked tires. They are a must for our winters and are just starting to be the «in» thing in the West.

Sergei PETUKHOV