Daewoo Doctrine, Cash Lift Ukrainian Workers
- By Rostislav Khotin
- Mar. 28 1998 00:00
ZAPORIZHYA, Ukraine -- South Korea's Daewoo Corp. has arrived in Ukraine in a big way, pouring unprecedented sums into local car production and taking on the task of changing lackadaisical Soviet work practices.
By all appearances it has won untold numbers of converts at the AvtoZAZ plant in the central Ukrainian city of Zaporizhya. The factory is due to co-produce 80,000 cars this year and eventually three times that number.
The works of Bolshevik leader Vladimir Lenin, which Soviet "red directors" placed prominently on office shelves during Communist rule, have been supplanted here by "The Great World of Business" by Daewoo Group chief Kim Woo-choong.
"What a great man! What a great book," said Olga Mikhailova of AvtoZAZ's public relations unit, enthusiastically quoting a line equating hard work with success.
Two notices indicative of better times in impoverished post-Soviet Ukraine were displayed on a wall near the entrance to AvtoZAZ, an acronym for Zaporizhya Automobile Plant.
One was an offer from a brokerage firm to buy company shares "at good prices." The other sought enthusiasts for yoga classes.
"Everything is fine when there's a happy ending," said a smiling Oleksandr Sotnykov, AvtoZAZ's general director, as he stood before a dozen locally made Tavria cars. "We feel like it's a great, real holiday."
The Daewoo project is the largest single foreign investment of post-Soviet times, with $1.3 billion promised. Seven years of independence have seen only about $2 billion trickle into a country seen as investor-unfriendly.
With the project getting under way, some 50 Korean experts have arrived in Zaporizhya, considered a cradle of Ukrainian culture as the 17th-century meeting place for Cossack councils.
Today, the grimy city on the Dnepr River is dominated by endless postwar tower blocks and the six reactors of Europe's largest nuclear power plant.
The Koreans' presence has had immediate and far-reaching consequences on the plant's 20,000 employees.
Always smiling, moving quickly and purposefully, the Koreans, for instance, never take smoking breaks.
"I am here for work, for more hard work," said Moo-yeong Kim, chief of the Daewoo-Ukraine product planning team. "AvtoZAZ people admire our attitude to work and this, I hope, is very good for the future of our project."
Concessions offered to Daewoo by the Ukrainian authorities, desperate to increase the flow of investment and invigorate a moribund economy, have run into opposition from a camp the government can ill afford to alienate -- the European Union.
Ukraine's parliament, in a law passed six months ago, scrapped import taxes on spare parts, gave a 10-year break on profits and the future venture tax-free land status, and forgave AvtoZAZ an $80 million debt.
Last month, the government met the AvtoZAZ-Daewoo lobby's final demand, banning imports of cars more than five years old and slapping a $5,000 duty on those of less than five years.
The European Commission, the EU's executive body, said the privileges could complicate Ukraine's bid to join the World Trade Organization.