Red Tractors In the Midwest

A Kremlin subsidiary

A Minnesota wheat farmer plowing up the south 40 in a Soviet-built tractor? It sounds about as likely as a Muscovite munching black-eyed peas--but it shouldn't. During the past three years, Satra Corp., a New York City-based firm that markets Soviet exports in the West, has managed to sell more than 1,000 sturdy Soviet-built Belarus tractors to American farmers. This may not be much when measured as a percentage of the total U.S. tractor market (1976 sales: 153,000 units), but it was enough to convince the Soviet state corporation Traktoroexport that it was time to cut out the middleman and conduct all the business on U.S. tractors itself. So in March the Soviets put up an estimated $5 million to buy out Satra's distribution rights, after incorporating Belarus Machinery Inc. as an American company --one of only two operating in the U.S. as wholly owned subsidiaries of the Soviet government's Ministry of Foreign Trade.*

Belarus now maintains corporate offices in New York and sales headquarters in Milwaukee. Twenty-one salesmen call on a network of 115 dealers (most of whom also sell U.S.-made tractors and farm-machinery products). Belarus' top executive is President Konstantin Shartanov, 36, a graduate of Moscow's Academy for Foreign Trade, but in the best tradition of multinational capitalism is run largely by host-country citizens: John Chambers is general manager and James Kelly director of dealer development. "We are very conscious of the bottom line," says Chambers, and he is motivating his salesmen and dealers with distinctly uncollectivist incentives: sales bonuses, commissions and free Caribbean cruises.

Belarus salesmen downplay the origin of the tractors (though it is hardly a secret: name plates, partly in Cyrillic lettering, identify them as MADE IN THE U.S.S.R.) and often counsel reluctant customers that "it's better to trade than to shoot." Nonetheless, Chambers admits that some farmers simply refuse to consider buying "Commie tractors." Others find that practical considerations outweigh ideology. At prices typically ranging from $4,600 to $12,000, Belarus' line of five models undersells its American rivals by anywhere from 15% to 20% or more. The Soviet tractors, made in plants in Minsk, Kharkov, Lipetsk, Vladimir and Kirov, are less plushly fitted out than American makes, but they also are durable and more economical to run. Says Chambers: "We have the Volkswagen philosophy around here. Our tractors may not have all the bells and whistles of the latest models from the U.S., but they do the work."

Many Belarus models also come equipped with four-wheel drive, handy when plowing a mucky, swampy field but a rarity on American-made tractors.

The biggest problem faced by Belarus dealers is the Soviet Union's deservedly dismal reputation for never having enough spare parts of anything on hand. Belarus has stockpiled a $5 million inventory of spares in its Milwaukee plant, where a team of Soviet mechanics works, and in its Toronto facility. Says Chambers flatly: "We are competitive in spare-parts service with any American company." Another help: Soviet farmers are often far from the nearest tractor dealer, so the tractors have been designed for quick and simple on-the-spot servicing.

For all that, the American market is dominated by such massive and well-entrenched firms as International Harvester, John Deere and Ford, and Belarus will do well to meet its modest sales target of 1,900 tractors annually by 1980. It will be many years more before tractor exports have any perceptible impact on the Soviet Union's giant deficit in trade with the U.S. (more than $2 billion last year). But it seems somehow fitting that the Kremlin, having become a large and steady customer for American grain, is supplying tractors to help plant and harvest the crops.

* The other is Amtorg Trading Corp., a New York City-based corporation that imports a wide range of Soviet goods into the U.S.

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