Joint Misadventures

By Janice Castro

After the U.S.S.R. put out the welcome mat two years ago to attract joint ventures with Western firms, hundreds of business executives rushed to Moscow. Many of them inked deals to produce such wares as shoes and pizza, computer software and fertilizer. But doing business in the Soviet Union has presented more challenges than capitalists imagined. The road to perestroika's pot of gold is filled with bureaucratic potholes.

IGNORE THEM, AND MAYBE THEY'LL GO AWAY. Soviet employees are a bit lackadaisical when it comes to customer relations. Said a U.S. executive: "The phone would ring, and our Soviet managers wouldn't answer it. They'd pick up the receiver and hang up. And they didn't understand about taking messages. I would come back to the office, and they'd say, 'Someone called.' I've finally got them to take a number."

WE'VE BEEN MEANING TO GET TO THAT. After Combustion Engineering signed a contract in 1987 to provide machinery and software for oil refineries, Soviet bureaucrats helped the company locate a Moscow building for its headquarters. Only problem: there were holes in the floors, and the structure was badly in need of renovation. Until they can find suitable quarters, 22 of the firm's workers are crammed into three tiny hotel rooms.

WANT SOME RUBLES CHEAP? Since the Soviets do not permit their money to be freely converted into dollars or other currencies, the rubles Westerners earn in the U.S.S.R. have dubious value. Foreign companies cannot send their rubles home or even calculate their earnings accurately because there is no accepted exchange rate. While Moscow says the ruble is worth about $1.60, the currency fetches as little as 10 cents on the black market. Some U.S. firms have got around the problem by persuading Moscow to allow the companies to export what they produce with Soviet partners for dollars rather than rubles.

HAVE YOU GOT A LICENSE TO OPERATE THAT STAPLER? A U.S. firm that wanted to install photocopiers was told to obtain a special permit from the local fire department. When the same company tried to order typewriters, recalls its office manager, "the Soviets said, 'We can't get those. We'll do that next year.' "

QUICK, SEND OVER A TON OF PEPPERONI. AstroPizza, a joint venture between the city of Moscow and New Jersey's Roma Food Enterprises, was a hit from the moment its truck began hawking hot slices around Moscow last spring. But when Roma resumes sales this month after a winter break, the company will once again have to ship all the fixings from New Jersey because it has been unable to find decent tomatoes, cheese and other ingredients in the U.S.S.R.

HAVE YOU GOT A WORD MEANING LEVERAGED BUYOUT? Drawing up a contract that is precisely equivalent in two languages, English and Russian, can be a mind- bending exercise. One problem: there are no words in the Russian language for many Western business terms. Michael Bonsignore, president of Honeywell International, took special care in preparing contracts for the equipment that his company is providing for four Soviet fertilizer plants. Says he: "We translated our English documents into Russian, then had someone else translate them back into English to make sure that we were really saying to them exactly what we wanted to say."

LET ME OUT, I'M HAVING A BIG MAC ATTACK! The expense of maintaining Western employees in the U.S.S.R. is extraordinarily high, as much as $400,000 a year % for a one-worker office. Says a Western diplomat: "The cost of renovating a Soviet apartment to our standards is $100,000, if you can find one. And to keep the Western employees sane, you have to fly them out of the country at least four times a year." Because employees feel deprived of their comforts, some companies provide allowances, so that personnel can import such hard-to- find items as toothpaste, fruit, toilet paper and fresh vegetables.

I'VE HEARD OF THE SOFT SELL, BUT THIS IS RIDICULOUS. The Soviets have almost no advertising experience, since there has been little need for promotion in a land of few choices and chronic shortages. The basic sales philosophy can be summed up in the words of a Soviet citizen who was asked what he would do if he wanted to attract more customers to stay at his hotel. "Well," he said, "I would hope that all the other hotels were full."

With reporting by Ann Blackman/Moscow, with other bureaus