Friday, March 11, 2022

Nationalization of Western Companies in Russia?

 So the chatter has started up....that the Kremlin may nationalize various companies....putting Russian workers back to work.  I sat and pondered over this.

X-car company (you can just say they were VW and making cars for sale just in Russia)....has a shutdown because VW-Germany said there's no way to operate.

A week later, some Kremlin guy arrives with paperwork to say the 5,000 person car factor is open once again.  The Kremlin guy?  The son of some Oligarch guy who has a degree in business, but never managed an industry in his life.

The head union guy say fine, but then warns the 'boss' that 75-percent of all electronics for the production model....are made in Bulgaria, Romania and Turkey.  The 'boss' says fine....we will have Russian companies to make the parts.

Two weeks pass, with workers mostly idle....waiting on the parts.  Several Russian companies looked at the production requirement of the electronics and said 'no'....we aren't built to handle this type of product.  Eventually, some Chinese guy name Wang shows up and says he can produce the 32 electronic parts, at x-cost....but it'll be six weeks before the first delivery.

Ok....so thing stall while waiting for Wang to deliver.  The big day arrives and Wang delivers a marginally loaded truck with the 32 electronic parts.....with just enough for one single day of production.  The engineers at the plant then examine for quality, and are in disbelief.....about half of the parts are up to the standards required, and some fail upon the first test.

The 'boss' says.....proceed on.  Wang promises a full delivery the next week....which does occur but it's basically five days of parts, and the schedule for the plant is now around 70-percent of what they were building before.

The new cars are being put on delivery vehicles and sent out....getting the nickname of 'Putin-cars' instead of VW cars.

Selling the 'Putin-cars'?  There's an immediate problem where blinkers don't work...the fuses for the AC unit blow very easily, and the electric window switch has issues.

Customers notice the faults, and initially refuse to buy the 'Putin-cars'.  Various problems are pointed out to the dealers.  One case of the customer trying to use the cigarette lighter, and a flame starts up....burning the plastic around it.

Complaints reach Moscow, and the Kremlin announces a 50-percent off deal....to get the models off the lots.  The 'boss' is fired and a new son of a Oligarch guy arrives.  Along the way....Wang is terminated as a parts handler, and his cousin (Wang-U) gets the deal.

'Putin-cars' are labeled by the cops as a no-no to utter in public. 

The profits that the Oligarch/Kremlin crowd expected?  Zeroed out.  The plants make just enough to cover cost (even at half price of the old VW).  

So you imagine nationalization conducted at 1,000 factories throughout Russia, and the results being basically the same.  The folks who planned the Ukraine war....are the same folks running the industry.  

Young and highly educated Russians will review the path ahead and quietly reach Mongolia or some 'stan' republic.....to find an exit to Europe, North America, or Asia.  Why would you stay in a dismal mess like this?

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