From the personal archives of a Russianist, installment eleven

Prospecting for consultancy clients, East West Marketing, 1977-78

From the opening of East West Marketing Inc. in August 1977 to the very end of its existence in early 1980, a very large part of my time was consumed in prospecting for new consultancy clients. Some of these romances lasted a year or more before petering out, mainly because the go/no-go decisions were taken over the heads of my talking partners, at Board level, though these talking partners were themselves highly placed corporate executives. Here below are diary notes from two such prospects, Johnson & Johnson and the Morton Frozen Foods division of ITT Continental Baking.  Though the latter ended in abject failure nine months later as regards the project which I was promoting to the Soviets with the active support of the head of Continental Baking, it introduced me to the entire ITT structure in Europe, both personnel at headquarters in Brussels and at the field offices in Moscow and Warsaw. In this way it set the stage for my eventual hiring by ITT Europe in April 1980, proving the wisdom of the old proverb ‘nothing ventured, nothing gained.’ 

As regards J&J, they were talking to the Soviets, not listening. Had they listened they would have heard what I clearly received from the State Committee for Science and Technology: that their particular interest was the company’s technology for production of “nonwovens,”  namely the key material for ladies’ tampons and for disposable diapers.

False start: Johnson & Johnson

Wednesday, 21 December 1977

Meeting with Dr. Jack McConnell at Johnson and Johnson’s New Jersey headquarters

I submit draft letter for presentation to their board meeting in January. I press him repeatedly for indication of how things are going, when we will hear their decision on representation. He weakly replies that no answer forthcoming before my next departure, although there is a chance they may call me in to discuss it. He does show trust in our ongoing relationship by refining scope of the agreement: Artegraft, Intersept, cold and liquid sterilization. The latter is named as most appropriate turnkey venture, preferred to nonwovens. In this area J&J has virtual monopoly, all aspects of production are covered by patent which are now expiring – within 2-3 years. Sale of technology and equipment would be in the range of $3 million – all profit to the company under the circumstances. The catch  is that the Soviets must pledge not to export fluid even within Comecon, because J&J now exports to E. Europe via an Austrian facility.

Reckoning on production of the combined populations of US and Canada, J&J would offer to USSR a facility producing 1.5 million gallons of liquid sterilizer annually. Boris Antoniuk and Petrovsky of the USSR Ministry of the Medical Industry have expressed a strong interest. Fact is that without such a fluid, using traditional autoclave sterilization you either thoroughly sterilize and wear out delicate equipment quickly or under-sterilize and experience post-operative infections. Project is attractive because J&J knows how to set up cooperation anywhere, anticipates no difficulties; nothing can go wrong.

Another false start

ITT Morton Frozen Food plant tour, 5 January 1978

Fly from NYC Laguardia to Charlottesville. 

Washington party:   from USSR Embassy, Alexander Barinov, Vladislav Dobroselsky (GKNT), Mr. Lubeznov (Trade Mission).      New York:  A. Yarilov (GKNT), G. Doctorow

Note :  Dobroselsky was very pleased with the visit to Morton, very impressed by their factory. He asks how my last trip to Moscow went (November 1977) and I tell him about my visit with Aikazian, the progress on Ralston seminar. Also that we saw Deputy Minister of Meat and Dairy Kroha on frozen food, but that Murzaneva (GKNT) said there was no interest. He says for me to push both ministry and GKNT, asks who is Murzaneva, says he will get this back on tracks.   Meanwhile, at our parting in New York, Yarilov promises to write a long account to Aikazian, to get this project moving.  They all note that Tony Midis of Morton said the company could do counter trade and this interests Yarilov. ITT Continental boss Harry Leather says ITT has a barter/switch office in Vienna and can handle this sort of thing. 

Friday, 10 February 1978, Brussels

I take commuter train into the city from the airport, then taxi to the ITT headquarters, a block down Avenue Louise.

9.45-11.00 meeting at ITT with Georges, director of Eastern Operations, Peter (his assistant for counter trade business) and legal adviser.  Serious, very serious and productive meeting during which I outline what I have done in Russia and Poland, what are the realistic prospects in each country. The meeting especially valuable because they have worked extensively in the area and can appreciate what I offer. No cosmetic language, we speak openly.

I describe the Soviet project as at preliminary stage only, but to be taken seriously because deputy minister supports it, because Aikazian now involved. Delineate difference between the Food Ministry and Meat&Dairy – over competence, readiness for frozen food. Food Ministry not certain how ITT /Morton can serve its interests; M&D has clearer sense of cooperation. In answer to Georges’ question how the Moscow ITT office manager can follow up this start, I suggest working on Food Ministry.  I also mention that next step will be to bring in frozen food samples in Moscow – and they correctly propose to have their rep make arrangements to meet me and clear product through customs; excellent.

When Georges mentions the Soviet ‘delegation’ that visited the Morton plant in Crozet, I qualify this: the delegation represented no one in particular and our aim in inviting them was to reach Aikazian. Georges asks if this was done. I demonstrate our success by observing how Mme Murzaneva had last defeated my approach, saying that if you want to sell knowhow, then speak to Licensintorg, whereas now Aikazian has taken a personal interest.

Turning to Poland, I outline institutional involvement: Spolem, Frozen Foods Association; Ministry of Food; Hortex. I say how their directors now look upon Morton as a vendor of technology, cooperation partner –  and are willing to pay. Mention cloudiness in Ministry’s thinking on possible cooperation – that FTOs, as cutting edge, have helped put in perspective real chances for compensation/barter.  I enumerate what they offered in exchange – frozen fruits and vegetables, frozen entrees. Georges accepts this as valid possibility.

Georges asks about my experience. I tell about role with Abbott Labs in successful bid, with Globe Services in unsuccessful effort. He seems satisfied. Mention Ralston connection.

Georges asks whether these countries are really prepared for frozen food. I say that given the absence of food retailing infrastructure, they need it more than Western Europe. I distinguish between Poland, where frozen food would be used as here in Western Europe, and the USSR, where it would be sold as fresh food, and is needed strictly for purposes of distribution. Georges fully appreciates this distinction and agrees with my evaluation. Obviously I am succeeding in this forum as an astute observer.

I mention that contact with Poland over frozen food will be useful to ITT even in its other activities since it will take the company straight to the top – food processing is one of the highest priorities now.

Georges admits that ITT Eastern Operations has hitherto focused mostly on traditional areas of corporate activity: communications and electronics. Sees wisdom in pursuing food processing. He has had talks with Harry Leather. Indeed the two conversed by phone yesterday. Harry has given him all copies of our correspondence. Most important: Harry has said he is ready to engage in turnkey project in Eastern Europe. It was Harry who urged Georges to visit Morton and see the plant.  Later they will invite country manager Luigi to visit the plant. Slowly, but they are preparing for this effort. Definitely it is the time to get a commitment from Leather. It is safe to assume that I have charmed Georges: my powers in this realm are increasing each week.

Before I leave, the young legal aid calls me aside, says his father just stepped down as president of English affiliate of French’s – will send my name to them as potential consultant!  So the impression was strong and positive.

©Gilbert Doctorow, 2020

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