Rockwell to Establish Moscow Office : Marketing: The company says it’s a long-term step toward stimulating its business in the former communist sphere. Analysts say the territory isn’t promising now.
To stimulate its business in Eastern Europe, Rockwell International Corp. said Thursday that it will establish a corporate office in Moscow.
The office in the Commonwealth of Independent States, formerly the Soviet Union, will serve as a liaison between the diversified technology company’s various business units and its customers.
“Opening a Moscow office is a logical step toward our long-range goal of establishing a strong market position in the former Soviet Union and Eastern Europe,” Rockwell Chairman Donald R. Beall said in a statement.
Beall said Rockwell wants to expand its electronics, automotive parts, factory automation, aircraft electronics and printing press businesses in the nascent economies of the region.
Analysts expressed skepticism that the market is ripe.
“I think I’m going to be out of this business long before (the market) has an impact on Rockwell’s bottom line,” said Michael Rosen, an analyst at Smith Barney in New York. “It’s a market to watch in the long term, particularly because of the technology there in the defense and space industries. But not in the near term.”
David Shepherd, vice president of international operations for Rockwell, acknowledged that the business in the former Soviet Union will not have a significant effect on the company’s $12 billion in annual revenue. He would not say how much revenue the Eastern European businesses generate for Rockwell.
“We perceived there would be changes ever since (Mikhail S.) Gorbachev came in, and we did our scouting several years ago,” he said. “Now we’re in full-fledged business development.”
Gorbachev, who came to power in 1985, led a drive to democratize the communist Soviet Union and helped bring about its eventual dissolution last year.
Gennady Alekseyevich Semchenkov, a former member of the US-USSR Trade and Economic Council, will be Rockwell’s corporate representative in the new office.
Rockwell has already scored a number of deals in Russia and Ukraine, though overall revenue from Eastern Europe remains a small part of the diversified technology company’s business.
Collins Commercial Avionics, a Rockwell unit based in Iowa, has an agreement to equip the fleet of new Ilyushin Il-96M airliners with a complete avionics system.
Rockwell’s Allen-Bradley business, which automates factories, already has an office in Moscow and has been doing business in Ukraine since 1977.
The unit has a service agreement with AvtoVaz Auto Factory, maker of Lada automobiles, and is proposing to automate the Azovstal steel mill in Ukraine. Rockwell’s automotive axle business is discussing a collaboration with a major truck manufacturer.
Rockwell’s Graphic Systems business has sold printing presses since 1969 to newspapers in the former Soviet Union.
Doing Business in the East
Rockwell International Corp.’s ventures in the Commonwealth of Independent States
Factory automation: The company’s Allen-Bradley unit has a technical-services arrangement with AvtoVaz Auto Factory, maker of Lada automobiles, and is proposing industrial automation equipment for the Azovstal steel mill in Ukraine. Allen-Bradley has been actively selling in the region since 1977.
Avionics: Collins Commercial Avionics provides new Ilyushin Il-96M airliners with complete avionics systems.
Automotive parts: Rockwell is in discussions with a Russian truck manufacturer for a joint venture.
Graphics systems: Since 1969, the company has sold printing presses to newspapers in the former Soviet Union.
Source: Rockwell International Corp.
