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Soviets want more US business.

Soviets want more US business

Machine-tool builders in the Soviet Union want to do more business in the United States. That's the message they were spreading at the Machine Tool Show in Chicago, but it's clear many hurdles have to be overcome before any measurable success will be achieved.

"Our industry is ready and willing to participate in the US market. However, it is extremely difficult to market machine tools, or any capital items, while the US government continues to apply the 30% to 45% import duty on products manufactured in the USSR," said Nikolai A Panitchev, USSR machine-tool minister. He expressed hope that "this state of affairs can be addressed soon" because that barrier to trade is the "fundamental reason for the Soviet's machine tools not being offered more widely in the United States."

He claimed that his market studies showed that Soviet machine tools would not displace US-built equipment, but would compete with other importers of equipment from Southeast Asia and Eastern Europe. "Thus," he rationalized, "the reduction of import duty rates levied on USSR-built equipment would not damage the US domestic market, but provide the American users with more choices for solving their technological problems in the most economical way."

Stand-Canada Inc, the Toronto, Canada-based import arm of V/O Stankoimport, the Soviet's machine-tool export administration, has sold about 4000 machine tools on the North American continent, primarily in Canada, since its incorporation in 1974. It's reported that the Soviet Union has sold some 18,000 machine tools to Western Europe, including 12,000 to West Germany since 1985. The Soviet Union is the third largest machine-tool builder in the world, following Japan and West Germany, having produced 130,000 machines of all types in 1989. More than 22,000 were equipped with CNC.

The other issue he raised that hinders trade between the US and the Soviets is COCOM, the Coordinating Committee on Multilateral Export Controls. This group creates regulations that restrict US exports to Russia. He pointed out the fact that the Soviets had a USSR-built machining center with a five-axis simultaneous CNC control system and a super-precision lather for diamond turning flat and spherical surfaces on display at IMTS-90 proves that Soviet factories are capable of high precision with their own products and technology.

Even so, the Soviet official admitted to a press conference that quality remains a real problem and is "one that we haven't paid much attention to."

On the bright side, however, Mr Panitchev pointed to the increasingly positive political climate that is blossoming between the two super powers, and the movement toward a market-driven economy; a move away from socialism toward capitalism.

"Reflecting this point, a major change is underway from the previous situation, where factory management received directives as to the product type and size and production volume required," the Soviet official explained, adding: "Our factories now have full authority in their production planning and are becoming more and more market driven."

Nevertheless he admitted that "to change a manufacturing plant's production from a product-push system to a market-pull system is no easy task. While everyone agrees that the restructuring must occur, the debate continues to formulate the policies to be implemented."

A result of the new openness between the two countries is the formation of a US-USSR machine-tool working group to improve understanding and encourage trade, said Mr Panitchev. Emphasis is being placed on cooperation between Soviet industrial ministries and companies in the West. The Soviet reported there are some 20 projects currently in the works, with several more to be signed in the next few weeks. Those projects include joint ventures and various technical service and engineering alliances.
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Publication:Tooling & Production
Date:Nov 1, 1990
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