Soviet Factory Readies for Greater Autonomy

For the managers and the 5,000 employees of Tyazhstankogidropress, one of Western Siberia’s leading manufacturers of heavy machine tools, this is a time of nervous anticipation.

Next January, this sprawling factory in the heart of Novosibirsk will join 25,000 others--two-thirds of Soviet industry--in switching to a new and largely untried relationship with the state, and to an equally new form of internal management. The remaining third of the industrial plants are to make the transition in 1989.

At least on paper, the industrial reforms that Soviet leader Mikhail S. Gorbachev has maneuvered past conservative skeptics in the Communist Party leadership promise some dramatic changes, although the implementation may prove less impressive.

The plant’s industrial managers are to gain a measure of freedom from the whims of central planners in Moscow. Workers are to gain a new voice in choosing the plant’s managers--by electing them from a slate of approved candidates--and in deciding how the plant’s profits are to be invested.

Difficulties Expected

Moreover, the reforms, codified in a new Law on State Enterprises adopted in June, require Soviet industrial enterprises to be largely self-financing, rather than living off state handouts, while wages are to be linked more closely to the workers’ performance.

“Of course, we hope all this brings us better results,” Nikolai Y. Kriva, head of the plant’s labor and wage department, said cautiously. “Probably, though, it won’t go completely smoothly. There will be difficulties.”

In fact, there have already been difficulties at Tyazhstankogidropress.

Earlier this year, a state quality control commission, one of 1,500 set up across the country in January, found fault with some of the factory’s work. Salaries were docked a few rubles, stirring resentment on shop floors. During a recent tour of the plant, several workers sullenly refused even to acknowledge the presence of management officials and a foreign visitor.

Officials insist that there were no strikes or protests, but they acknowledge that there were “psychological problems” among workers, which they declined to discuss.

Equipment Outdated

Tyazhstankogidropress--the name is a compression of the Russian for “heavy machine and hydraulic press”--makes one-of-a-kind lathes, presses and milling machines for Soviet transport, energy and aviation industries, and also for export. These huge machines, some of which require 20 railroad cars to ship, are critically important to Gorbachev’s plan to refurbish much of Soviet industry with modern production technology during the next few years.

For this reason, much of the plant’s capacity will continue to be taken up with state orders rather than the export sales the management would prefer. But one benefit of reform its managers eagerly anticipate is that, for the first time, the plant will be able to keep the greater part of the profit it generates, instead of having to turn the money back to its governing ministry.

While the plant has some modern Soviet-made machinery, controlled by punched computer tape, “much of our own equipment is outdated,” Yuri N. Kalekin, the deputy chief engineer, noted on a stroll through a cavernous machine shop.

A huge American-made lathe in one corner, officials noted, was acquired “during (Franklin D.) Roosevelt’s time” as lend-lease aid.

“We’d like to keep some of our own machines, but GOSPLAN (the State Planning Committee) hasn’t allowed it,” Kalekin said.

Plant managers are also eager to take advantage of new Soviet regulations that permit joint ventures with Western firms, with the foreign partner allowed to hold up to 49% of the equity.

“We have (export) links with Czechoslovakia, Italy, West Germany and Japan, but unfortunately not with America,” Kalekin said. “Now we are seriously working on the question of joint ventures. We’re not against such ventures with the Americans.”

Another major change is that for the first time, starting next year, shop teams, or “brigades,” that produce more will be paid more--or less, if their output falls.

A three-year experiment with this so-called khozraschet , or “full accounting,” method of management among 300 workers at the plant brought an 18% increase in productivity and a 9% increase in their wages, to as much as 500 rubles a month--2 1/2 times the nation’s average industrial wage. There are high hopes that similar results can be obtained in the factory as a whole.

There is, however, a downside to economic reform that is already complicating labor relations at this and other Soviet plants.

Understanding Required

In addition to new wage pressures on workers to achieve higher quality and greater efficiency, plant managers will face the challenge of explaining why a factory’s newly retained profits should be invested in improved machinery rather than in new housing for workers, which is in chronically short supply and is considered part of a factory’s responsibility.

“There will be some difficulties,” Kalekin, the deputy chief engineer, conceded. “But the means of settling them should be glasnost --openness. Everybody should know everything.

“The workers are no fools. But they need to understand the economics of this enterprise, that if we have no new capital investment, we may not have as much money later on to divide among the workers.

“We hope they understand this.”