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The Mack plant in Russia that wasn’t

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Mack Trucks Signs Pact with Russia

Business Week Magazine / June 18, 1971

The Soviet Union and Mack Trucks, Inc. have signed a $700 million preliminary agreement for the U.S. company to supply machinery and technology for a huge Russian truck manufacturing plant.

The agreement is subject to approval by the U.S. government.

It was signed by Zenon C.R. Hansen, chairman and president of Mack Trucks, and N.D. Komarov, Russian deputy foreign trade minister, May 18 at the company’s Allentown, PA headquarters.

Hansen, commenting in a telephone interview, said he would describe the result of the talks with the Russians as a “letter of intent” rather than as a preliminary agreement.

Hansen said that “with the changing attitudes on east-west trade,” he was enthusiastic about the prospects of government approval.

The proposed deal could have a skyrocketing effect on U.S.-Russian trade. Total U.S. exports to Russia amounted to only $118 million in 1970.

The Russians were reported to be clearing land for the $1.3 billion project near Naberezhnle Chelney, 600 miles east of Moscow in the Tartar Republic.The project was said to include housing for an eventual 300,000 people.

The plant may require an estimated $1 billion worth of machinery and technology before it is completed.


Export of Mack Trucks To Russia May Be Near

SAN ANTONIO EXPRESS / August 10, 1971

(WASHINGTON) The Nixon administration approved licenses Monday for export of million worth of foundry equipment to the Soviet Union, apparently clearing the way for a massive trade deal involving Mack Trucks Inc.

Although the two licenses approved went to a company other than Mack, a Commerce Department spokesman said the action was “related to the project on the Kama river” where the Allentown, Pa. firm proposes to build what is billed as the world's largest truck plant.

Commerce officials said privately the action would be a first step in approval of the Mack Truck deal but said It should not be construed as meaning a final decision has been made.

The department approved three licenses altogether, including one for export of technical data for iron and steel foundries. Equipment for automotive castings was among items listed. The firm went unidentified, in line with department policy.

Roger Mullin, executive vice president of Mack Trucks, said the export licenses approved were “definitely not for us. Our application is for machine tools.” But he said foundry equipment would be necessary before a truck plant could be built.

Mack Trucks signed an agreement with the Soviet government this spring to build the Kama River project. The Mack Trucks spokesman said the cost is just a guess, but he said estimates have run between $1 billion and $2 billion.

Mack Trucks, as a result of the agreement, is seeking authority to export an estimated $700 million worth of machinery and technology to the Soviet Union.

The company spokesman, asked whether the government’s action indicated the administration will act favorably on the entire deal, said he would not speculate on what would happen next. He said “your question would lead logically” to the conclusion the administration is looking on the application favorably.

Mullin said in reference to the foundry equipment: “It is an essential part. We would have to have a foundry.”

The government refuses to name the companies for which it approves export licenses. A spokesman said it only referred to the Kama River project because it had been previously announced by the parties involved. Officials said a step-by-step approval process may be used in granting licenses for the project.

The Commerce Department’s Office of Export Control passes on specific export licenses for export of equipment forbidden under government regulations. Such high-technology items as foundry equipment are prohibited from being exported, unless a specific license is granted by the government.

About a year ago, Henry Ford II went to Moscow in an attempt, later abandoned, to complete a similar agreement.

At that time, Secretary of Defense Melvin R. Laird commented: “Before giving away the technology to construct trucks in the Soviet Union, and establishing plants for them, there should be some indication on the part of the Soviet Union that they are not going to continue sending trucks to North Vietnam by the shiploads for use on the Ho Chi Minh Trail.”

There was no Defense Department comment on Monday’s action by the Commerce Department.


Mack cancels Soviet Plant

The Miami News / Sept 16, 1971

Mack Trucks, Inc. has cancelled plans to build the world’s largest truck plant in the Soviet Union. Mack said it has not received U.S. approval.

Mack signed a preliminary agreement with Soviet officials last May 18, providing that the Allentown, Pa. firm would design and supply a major part of the Soviet Union’s $1.4 billion Kama River truck plant.

The deal, Mack said, hinged on whether the White House was willing to ease its policy on exports to communist countries sufficiently to grant the necessary approval.

The deadline for government approval under the tentative agreement was initially June 25, but the date had been extended to September 15.

In a terse message to Soviet officials yesterday, Mack said, “Since approval from the U.S. government has not been received and the second extension....expired with the close of business today, we feel that to our mutual interest.....to consider said protocol terminated.”

There has been no official statement from administration sources on the proposed deal.

Defense Secretary Melvin Laird, however, has in the past decried the fact that the Russians are supplying trucks to North Vietnam.

Mack countered the charge with the argument that a final agreement would have stipulated that the trucks be used only for industrial and agricultural purposes within the Soviet Union.

The Kama River plant, about 600 miles east of Moscow, was scheduled to begin production in 1975, with a planned capacity of 150,000 heavy diesel trucks and 100,000 diesel engines annually.

Mack Truck President Zenon C.R. Hansen was unavailable for comment on cancellation of the project.


Mack Trucks Drops Soviet Union Truck Plant, Cites U.S. Slowness

United Press International (UPI)  /  September 17, 1971

Mack Trucks Inc. announced Thursday it has dropped plans to help the Soviet Union construct a giant US$1.4 billion truck plant because the U.S. government had not approved the agreement.

An administration official said in Washington, however, that “the government did not stand in the way of the deal.” He said government officials “were considering, and indeed, will consider in a positive way,” Mack’s application to build the plant.

“They (Mack) are aware of this, and so were the Soviets,” he said.

The official, who asked not to be identified by name, said the Commerce Department, which was considering Mack’s request for permission to export needed equipment to the Soviet Union, “had asked for some more information and Mack did not provide it.”

Mack said it had signed a “letter of intent” last May 18 with Soviet officials, agreeing to provide engineering consultants and 100 heavy-duty vehicles for construction of the plant on the Kama River in Russia.

The “letter of intent” was extended past its expiration deadlines of June 25 and July 25 , pending U.S. consideration of the proposal.

When it expired for the third time Wednesday, Mack told the Soviet Union it was pulling out because the Soviet Union had told the truck company last August 4 that time was an important factor in the plant planning.

When Mack signed the letter of intent after working out plans with a Soviet trade delegation, it was with the understanding the aid would have to be approved by the U.S. government, a Mack spokesman said.

 The agreement to help the Soviets build the plant had met some criticism from the conservative Young Americans for Freedom (YAF) which announced it was beginning a nationwide campaign against the agreement.


Kama River Export Licenses Approved

The Chicago Tribune  /  October 21, 1971

The Commerce Department approved export licenses totaling US$280 million for foundry equipment at the proposed Kama River truck factory in the Soviet Union, Dow Jones news service learned today.

The e x port licenses for foundry equipment were cleared for about 10 United States companies.

The Commerce Department didn't identify any of the applications, but confirmed that if the equipment is sold to the Soviet Union, it would be used at the Kama River factory where the Soviet Union plans to produce about 150,000 heavy-duty trucks annually by 1975.

In August, the department cleared three other licenses for foundry equipment and technology valued in excess of US$162 million for the same project.

Nixon administration officials said that while the foundry equipment export licenses now total about US$442 million, the Soviet Union's purchases of such equipment in the U. S. may amount to little more than 10 percent of that total.

The approval of the export licenses in effect puts a number of U. S. manufacturers in a position to seek contracts to supply this equipment with assurances that if contracts were completed, the items could be exported.

U. S. intelligence sources estimate that U. S. manufacturers may receive orders totaling about US$300 million for a wide variety of equipment and technology that the Soviet Union is seeking in the U. S. to build the Kama River plant.

Commerce Department officials said that other applications for licenses are pending. It is understood these include machine tools and other equipment that would be used to produce trucks and components.

The Soviet Union originally planned to clear their orders for U. S. equipment thru Mack Trucks, Inc., a unit of Signal Companies, Inc.

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