U.S. Firms in Soviet Union Take On New Roles Amid the Turmoil : Trade: The upheaval has changed the way they do business. Some are monitoring shifting political developments for clients.
In Moscow to complete a hotel deal, Irvine executive Paul Tatum instead found himself on the barricades.
After learning Tuesday that embattled Russian Federation President Boris N. Yeltsin was having difficulty placing calls outside the Soviet Union, Tatum made his way into Yeltsin’s besieged headquarters and lent his cellular telephone to Yeltsin’s aides.
He was determined, the president of Americom International Corp. explained in a telephone interview later, to support the “legitimate” Russian government.
Though most American workers in the U.S.S.R. are steering clear of politics, business people--from accountants to shippers to oil drillers--are unable to escape the drama unfolding around them.
Ernst & Young employees have set aside many of their usual accounting chores to monitor the shifting political developments for clients. Besides watching the movement of cargo, New Jersey-based Sea-Land Service Inc.’s employees in Moscow monitor the movement of Soviet tanks in the streets below the shipping line’s office, just two blocks from embattled Red Square.
A survey of a dozen or so U.S. companies turned up none that had called American employees home. But virtually every firm has stepped up communication with its employees in the Soviet Union and put in place plans to evacuate them if necessary.
Because it is difficult to place calls to the Soviet Union, U.S. companies are telling employees in Moscow to phone home regularly. Ernst & Young, for example, told its two accountants in the Soviet capital to call New York headquarters every six hours with updates on their situation.
Sea-Land, a unit of CSX Corp., is relying on electronic mail to keep in touch with its two employees in Moscow. “STATE DEPT. SAYS BUSINESS AS USUAL,” flashed one computer message from Moscow. “THAT IS WHAT WE ARE TRYING TO DO.”
It is not an easy task. A Sea-Land tanker should arrive in Leningrad today, but the company expects its unloading to be delayed. Soviet dock workers “are going off to attend rallies,” explained Jesse Mohorovic, a Sea-Land vice president. “Under these circumstances, things take longer.”
For Tatum, too, business-as-usual just wasn’t possible.
He had gone to Moscow three weeks ago to discuss financing arrangements for a new 430-room hotel and a separate office complex developed by Americom International Corp. and Radisson Hotels International, in cooperation with the Soviet tourism agency Intourist. Instead, he put himself at the center of the Soviet crisis.
As he described the scene by telephone, thousands of people had formed a human shield around the Russian parliament building where Yeltsin and his aides were bunkered. Facing them were tanks controlled by Soviet hard-liners.
Tatum said he would remain in Yeltsin’s headquarters until daylight because of reports that Soviet troops planned to attack the building during the night. Yeltsin’s aides had promised him safe passage when he chose to leave, he said. The coup plotters had blocked Yeltsin’s access to Soviet radio and television and cut his fax line.
Even amid such circumstances, some U.S. executives did their best to maintain a semblance of normalcy.
George B. Reese, Ernst & Young’s managing partner for the Soviet Union, was intending to return to Moscow today after what turned out to be a well-timed visit last week to Houston. “We have clients there who need our help analyzing the situation,” he said.
Among the firm’s clients is the Soviet Oil Ministry. The accounting firm had scheduled a seminar on pipeline tariffs for ministry officials this weekend. “They called to ask if it was still on,” Reese said Tuesday. “They plan to go ahead with it.”
Though many analysts expect the coup to freeze new foreign investment, representatives of companies with established ties to the Soviet Union took a longer view of the situation there. Uncertainty, they said, is simply a part of doing business with the Soviet Union; the size of the Soviet market makes it a risk worth taking.
“We’re going full steam ahead,” said Gordon B. Andros, executive vice president of Anglo Suisse, a Houston oil exploration firm drilling in Siberia.
Reflecting the view of other American businessmen with operations in the Soviet Union, he said: “There is no way to evaluate how events will turn out one way or another, but doing business is in everyone’s interest.”
Andros met Tuesday in Houston with newly arrived employees of the Soviet oil company Varyeganneftegaz to discuss a new joint venture in Siberia. Anglo Sussie employs 100 non-Soviets--mostly Americans and Canadians--at another oil field in Siberia, about 1,600 miles from the turmoil in Moscow.
The Siberian outpost remains in touch with Houston via a satellite link, Andros said, and has so far been unaffected by events in the Soviet capital.
