Rus Wane Equipment Case Study

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Rus Wane Equipment Case Study Joint Venture In Russia
Michael G Rutkowski
Upper Iowa University
Abstract
Wane Machines Inc. engages in the manufacturing, installation, and maintenance of large scale heating and cooling equipment for office and apartment buildings. In February 1990 a joint venture was formed called Rus Wane Equipment with NLZ, a medium sized factory outside Moscow, that manufactured similar equipment, but of much lower quality. This case shows the difficulties that can arise if a company does not follow the organizational structure, management systems, and the human resources policies of the company. And how changing government legislation in a rapidly changing business environment like Russia, can have serious financial impacts and decline the advantages of a joint venture. This case shows the situations and difficult problems that can arise from a joint venture between Wane Machines, Inc and NLZ the Soviet partner company. Wayne Machines started in New York City and specializes in manufacturing, installing, and maintaining large scale heating and cooling equipment. The corporation is divided into four divisions that unite 50 companies in 160 countries. After exploring markets in Eastern Europe and the Soviet Union a Soviet-Belgian joint venture was formed in February 1990, called Rus Wane Equipment. Rus Wane established another joint venture with a St. Petersburg partner, to install and service its products in Russia. The market potential in the Soviet Union during the late 1980s was approximately 100,000 units annually; 60.000 provided by Soviet companies, potentially leaving 40.000 units available for Rus Wane. In October 1990, Rus Wane began construction of a plant in the Moscow area to produce heating and cooling equipment. By September 1993, the factory was producing 85 units per month with projections of 5,000 units annually…...

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