COMPANIES AND MARKETS
/ AT THE CROSSROADS
YESTERDAY FLAGMAN
What is prepared for the plant named after Likhachev?
TEXT / IGOR MORGARETTO
On the last day of winter, the 50, 000th “Bull-calf” ZIL-5301 came off the main assembly line of AMO ZIL. It seems to be a reason to rejoice, but the economic situation on the former flagship of the Soviet automobile industry does not have to beat the timpani.
Estimated for the production of 220 thousand ZIL trucks and buses last year produced 21.5 thousand, of which about 60% were bull-calves. Judging by the reports, they are all sold, and the plant is still in debt, like silk. At the beginning of the year, the gas supply was even reduced. There is no need to explain the reason - chronic non-payments to utilities …
“Last year we ended with a profitability level of 3.5%,” explains Valery Nosov, Director General of ZIL AMO. - The plant is not unprofitable, but in order for such a colossus to function normally, this level must be brought up to 12%.
Today, “Bychok” is the cheapest in its class - $ 7–8 thousand. Next - “AVIA-Prague” (a Czech plant owned by Daewoo) is priced at 22–24 thousand, while Ford is already surpassing 40 thousand
- In order for the ZIL to exist normally, the “Goby” should be sold for 10 thousand, - says V. Nosov, - and this is very expensive for our customers.
But even out of those 7–8 thousand that the plant could help out for its products, there is very little “living” money: about 60% goes on barter for components, raw materials …
“As with the primitive communal system,” the director says bitterly. - We determine in calculations with suppliers that one “Bull”, for example, costs 100 rims. For metal, tires, electrical equipment are forced to pay by machines. At the same time, our suppliers lay normal profit in their products - up to 30%, and due to this they sell our cars much cheaper than the factory. What kind of market is this?
To break out of the steel embrace of suppliers and get rid of barter, ZIL is trying to get a loan from Moscow banks. According to Minister Yevgeny Panteleev, interest has already been shown by Sobinbank, Eurofinance Bank and Moscow Industrial Bank. Assistance in raising a loan is provided by the Association of Russian Banks. And although the amount is not very large (400-500 million rubles), negotiations are slow and difficult. Apparently, bankers do not really believe in the future of the car factory …
And how can I believe it? Situated almost in the center of the capital, ZIL, to be honest, so far exists only thanks to the support of its main owner - the Moscow government. Under his guarantee, preferential loans are taken, and payment for land (350 hectares of only the main site!) Is not charged. Try to set a normal price for it - and that’s all, the products will immediately become unprofitable. Although the plant is called in a modern way a “joint-stock company”, in essence it remains a giant in the socialist industry. Even at the main site, the number of people working in the assembly of cars is half that of managers and employees of auxiliary services. But there is still its own thermal power station, a huge hospital complex, 12 branches in different regions of Russia (most of which are unprofitable) with 45 thousand employees. Is it possible to feed this army, releasing twenty thousand "bull-calves" and even fewer trucks of another class?
Slowly, the plant is making restructuring attempts: the “Home Refrigerator Plant” has already been set aside as a separate production, the sale of surplus space has begun - an auto-aggregate plant on Ozerkovskaya embankment and a carburetor plant on Shabolovka ($ 7 million were earned for the latter), and the next one is the driveshaft plant. But you can’t live long by selling land. So does our former flagship still have prospects?
“ZIL has prospects,” his general director is sure, “its products are in demand. I have been to many factories in Europe, America, Japan, but nowhere was I ashamed of our production. And some of its units - bodywork, welding - can generally be called workshops of this century. Many consider it pointless to maintain such plants as ZIL: they say that not only are there no profits from them, but they also require help. This is not true. The plant provides livelihoods not only for its workers, but also for their families, in total - about 100 thousand people! Close us and the government will have to take care of all these people. It’s just that large factories in a poor country today can’t do without state aid - this must be understood! For restructuring debts and putting things in order at KamAZ, 32 billion rubles were required, ZIL needs 10 times less …