Unfortunately, the plant that KamAZ management inherited from the Soviet planned economy was just too big. Figuratively speaking, all these years they had to carve a wooden spoon with a huge axe instead of a nicely fitted knife. They had to handle it very carefully to make sure that they don't injure themselves and those around them
250 «KAMAZ TRUCKS» AND ONE «OKA»
When driving from Kazan, at the entrance of the town of Naberezhnye Chelny on the bridge across the Kama River, all cars with non-Tatarstan license plates are charged a toll of 10 rubles, for environmental protection as they say. If you enter the town from a different entrance you will not be charged anything. Like it's all right to contaminate the local environment on the other side for free. A similar situation was observed very recently on the main plant of Naberezhnye Chelny — the KamAZ Plant. On one end it was sucking in the money like a vacuum cleaner, while from the other side something seemed to be dripping. Drop by drop. At the beginning of 2002 even this dripping stopped. The spiteful rumors started at first in the town, then in the republic and finally all over the country: the main conveyor stopped, so much for your management!
The funniest thing is that these rumors were true. The production line was actually stopped in January-February of this year. Why should they produce something that cannot be sold? It took ten years before the KamAZ management had the courage to look the truth of life in the face. Well, as they say, better late than never. And is it really late anyway? Maybe just in time. Because KamAZ is not just a plant, but a core of the town, set up as such back in the Soviet times.
The country, and first of all the army, needed diesel trucks. Many trucks, inexpensive but powerful and with high cross-country ability. Both the plant and the town were founded in 1969. The plant was the priority up until the end of construction. Another proof of this is that the town still doesn't have a proper embankment.
EMPTY HAT
There was not enough time for a lot of projects in town. For example, an empty skyscraper sticks out in the middle of Naberezhnye Chelny, which from afar looks like a five-star hotel. The locals ironically call this skyscraper a «hat» because of the round top floors painted in the colors of the flag of Tatarstan. During the Soviet times the plant didn't even reach the originally planned production volume goal. The plan was to produce 150,000 trucks per year, and everything crashed when they reached 130,000.
It would be unfair to say that «KamAZ» trucks were not in demand. This truck is really good, including the main factor that was implied originally but for some reason nobody could pronounce it aloud: price-quality. Of course the cars were not as fancy as «Volvo», «Mercedes», «Man» or «Iveko». But as for other qualities, they are hardly inferior to these brands, and in some respects are even superior. The proof of it lies in the victories at «Paris-Dakar Rally». «Tanks are not afraid of dirt» is a good slogan, very precise. A «KamAZ» truck is a hard-working car, very thorough, reliable and obedient. A dream of any driver, in other words.
However, with the beginning of market reforms everyone had to start buying cars instead of obtaining them according to the orders. At the same time terrible inflation swept away all the money of the potential buyers. The sale process took a rather ugly shape as well. It easy to talk about it now, but back then, in the beginning of the 90s, in our country no one knew how to sell goods in the free market. We knew how to speculate, but didn't know how to sell. As a result the plant became surrounded by a group of intermediate companies. They were selling the products at a price lower than the cost because they were pocketing the earned money.
In the spirit of the time the plant was divided into independent operating entities. They were surrounded by checkpoints and an armed guard, and they started selling and buying goods from each other, mostly using barter, and writing off each others debts. This fun back then was called «market economy.» Not only at KamAZ but all over the country. With time it somehow happened that 30% of the town residents earn their living at the plant, and 40% work at various market structures related to the plant. Putting things in order is the easy part. But what to do with more than half of the local residents that literally would be left penniless?
Today JSC «KamAZ Group» includes ten production companies, including the automobile plant itself, JSC «Kama Foundry», JSC «Kama Forge», JSC «Kama Press-Frame Plant», JSC «KamAZ-Diesel», JSC «Automechanical Plant», JSC «KamA Zinstrumentspetsmash», JSC «Economy Car Plant», JSC «Remdiesel», and JSC «KamAZ-Avtoagregat». The group also includes another division, which is for some reason omitted from the advertising brochures. It is JSC «KamAZ Trade» and Financial Company TFC. JSC «KamAZ» Vice-President of Sales Anatoly Samarenkin explained to us the reason of the rumors about bankruptcy of the company.
As usual, the explanation was quite simple. At the beginning of the year, the plant made as many cars, frames, diesels and other products as could be sold at reasonable prices. Considering that there were plenty of goods in stock at the delivery areas and at dealer warehouses. The experts call it clearing of the market. «We have to learn to make as many products as the market can consume», according to Vice-President Samarenkin.
Although it is easily said than done. Because you will become the scapegoat. You have to be a very strong manager to be able to publicly announce that shutting down the main conveyor is private business of the plant. The town immediately filled with rumors about upcoming layoffs at the plants of the group. The new General Director of KamAZ Sergei Kogogin had to patiently explain at a local TV station that there would be no lockouts. That the human resource policy of the plant is that if you want to quit nobody will stop you. However, from now on, every two released workplaces will be filled with only one applicant. The plant is boosting its production rates but so far the volume is only 24 thousand trucks, not 150 thousand.
Unfortunately, the plant that KamAZ management inherited from the Soviet planned economy was just too big. Figuratively speaking, all these years they had to carve a wooden spoon with a huge axe instead of a nicely fitted knife. They had to handle it very carefully to make sure that they don't injure themselves and those around them.
MIDDLE MANAGEMENT
In the main conveyor workshop, which is more than 1 kilometer long, the command is in the hands of corporals and officers of production, from shop superintendents to foremen.
Deputy Director of Planning and Procurement Andrei Korepanov thinks that it would be better to go back to the old system, eliminating the «feudal division» of the former workshops into independent companies. Under the currently existing system delivery of accessories produced by these newly independent workshops to the main conveyor have to be legally processed as a purchase and sale transaction subject to taxes.
— I don't know the exact figures, they are beyond my scope, — said Mr. Korepanov. But I know for sure that the total value of our annual production amounts to one billion rubles. If we charge a 20% tax, our plant alone would generate 200 million rubles. We could set up a holding, but I think it would be better to go back to the former system. Then we would be able to restore cash flow that is clear and transparent to everyone.
— But that would infringe upon the rights of the existing owners, ten shareholding companies.
— The funniest thing that the main owner of all those companies is KamAZ.
— Still there are other owners, even though they are minority shareholders. They get dividends on their shares.
— What dividends! I wish we could avoid losses. For that wed have to manufacture 2-2.5 thousand cars per month!
— But this is how many you are making anyway. Last year you made more than 24 thousand cars!
— That was last year. And before that? What about rent, utility payments, old debts...
— But at the same time it looks like you are buying products from your own company. Putting money from one pocket into the other one, and then returning the change into the first one. With taxes on top of it. Rather surreal, wouldnt you say?
— Looks like it, — sadly agreed Mr. Korepanov and smiled. — Well figure it out. You know what our new General Director said? «I will make the policy!» And in this case we agree with him.
— In what cases you dont agree with him?
— Our plant produces 16 thousand accessories. Out of these accessories we build 250 modifications of cars. We are told which cars need to be built this month; we complete the task and wait for a new order. TFC should be more efficient in locating new markets.
— You are not satisfied with their work?
— At this point I am not satisfied.
— You are a brave man.
— I am just doing my job. Certain circumstances prevent me from doing it the way I could have. What does courage have to do with it? This month one half of our products will be made for export. I dont understand how are Russian consumers worse than foreign ones. Their money is the same.
Rustam Mukhametkhanov, Acting Director of Production, has a different headache. In order to fill even a small order the plant has to start up the entire main conveyor, which was initially designed to make 150,000 cars per year. The plant is just completing the process of installing new Japanese computerized machines there. But there is no way to explain to every worker why is the conveyor moving in jerks and why are the wages so low. Because in this case you would have to teach them the basics of economic and to explain that the cost of products mostly consists of all the expenses involved in operating of a huge mechanism making products in small doses. And this is not Rustam Mukhametkhanov's job. He is an engineer, not a public speaker.
WORKING CLASS
Workers used to make more than engineers did. And now they really resent the «exploiters». In the spring the «massive strikes» of the main KamAZ conveyor workers were all over the news released by all international media agencies. As a journalist, I am supposed to know how news like this is made. Now I had an opportunity to personally talk to the strikers.
On the way there, I ran into some adventures. I had a hard time trying to avoid electric trolleys — for some reason in the building of the main conveyor all drivers are women. I never thought that they are such daredevils! Then I was walking along a wired fence for a very long time, trying to find a hole in it. I kept thinking: «Oh, I see, they are afraid of the truth and fenced off the working class from the public!» It turned out that I was walking the wrong way. Finally I found the entrance where good-humored ladies were weaving something from colored cable cores.
— Where are your strikers? — I asked the ladies.
— Who? — at first they didnt understand what I wanted. — Oh, the strikers? Right over there! — And they waved at the workers in the rest area peacefully eating their lunch.
These rest areas look like big trunks of dump-body trucks with a table and benches. The troublemakers were sitting at the table. Rustam Valeyev obviously looked like the leader.
— Yeah, we did go on strike. They didnt pay us our salary! — he said firmly. — Although there wasnt any glass for the cabins, we didnt have anything to do anyway.
— So how long was the strike?
— Not that long. We were paid on the next day.
— Thats too fast. Banks dont work that way, if they don't have the money today it would hardly be there tomorrow. Maybe you would have gotten your salary on the next day anyway, without a strike?
— No way, — insisted Rustam.
Well, what would you say in his place? Nobody likes to make a fool of himself, right?
— Our strike was perfectly legal, — said Rustam. --All the workers in our team submitted written notices to the administration.
— So you all know the laws and how to write those notices?
— We know some competent people, — evasively replied Rustam.
He has been working at the plant for more than two years, but he is still has only the second category. In his own words, the management just wouldn't let him pass the test for the third category and so on. I am completely lost. The plant urgently needs qualified staff. I carefully asked Rustam exactly who is the person that doesn't let him pass the exam for the next category. He said that it is not important because he is quitting in three days anyway because he found a better job in town.
Others did not find a better job. They've been working at the plant for ten or more years and are staying there. I wonder who will lose?
Sergei PETUKHOV
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