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Russia: American Businessman Succeeds In St Petersburg

St Petersburg, 14 January 1998 (RFE/RL) --American Juergen Staudte emphasizes that - first and foremost - he is a physicist, and only second, a businessman. Nevertheless, he is at the helm of AO Morion, one of a small number of Russian high-tech manufacturers, succeeding in a market economy. Morion, in Russia's Leningrad region, was one of the most secret factories in the Soviet defense industry, but by the 1990s it was producing technology that was primitive by world standards.

Morion was privatized in 1992-93, mainly through the initiative of recently murdered Mikhail Manevich, former head of the St Petersburg City Property Committee (KUGI).

Staudte quickly bought up a 56 percent stake in the company, partly through another company he owns in the U.S. He restructured Morion, and it now manufactures frequency-control devices, parts vital for the telecommunications industry.

Richard Stewart, a manager in Hewlett Packard's procurement division in California, tells RFE/RL that Morion is Russia's leading firm in this field, and that the company's production is in great demand. It's list of customers reads like a Who's Who in telecommunications: Hewlett Packard, Alcatel, Ericsson, Bosch, Nokia, Siemens, etc. Also, about six percent of the company's output is sold to the Russian and U.S. militaries for their navigational equipment.

According to Yakov Vorokhovsky, Morion's director, "In the past three years, while other manufacturers in this field have seen a decline in output, ours has increased. Sales are up 450 percent in the past three years." Vorokhovsky tells RFE/RL that annual sales now total five-million dollars, and are set to double in 1998.

At the same time, Morion has been streamlined. In Soviet times, there were 1,900 workers. Now there are 500, with plans for further reductions.

The road to success has been long and difficult.

Here's the way Staudte puts it: "the old leadership did not go quietly, and then they started making noise about 'selling out Mother Russia.' Most of these so-called 'patriots' were the same corrupt people who had run Morion into the ground."

Morion - and Staudte - represent a sort of technological bridge between East and West - past and present.

Staudte was born in East Germany, but defected to the West while still in high school. His father was a businessman in East Germany, and was arrested for "warmongering" in the early 1950s. The Communist secret police then came to round up the family, but Staudte says he received a tipoff, and was able to escape to the West. This was in Berlin several years before the Wall was erected. Staudte then emigrated to America, and graduated from the University of Michigan with a degree in physics.

For now, problems continue to plague Staudte's plans for Morion's expansion. He says Russia's crushing tax policy is the biggest obstacle. Again in Staudte's own words: "as an investor, I have the whole world to choose from. It is easier for me to go to China, where the government will do everything possible to help me set up my business, and not charge me 20 percent VAT for importing equipment. In Russia, the government only gets in the way and discourages investment."

Then, why stay? Despite such obstacles, he plans to keep his business in Russia. "In general, I like this country, especially the culture and the people," he says.