Cornered Might

It was claimed that former Yugoslavia was the fourth largest military power in Europe, but now its army, in the wake of political instrumentalization, at least within the contours of a lessened Yugoslavia, has been reduced to not just the fourth place, but to one of absolute insignificance. The army’s fate is also shared by the military industry. How powerful that industry was is evidenced by the fact that it supplied the fourth military power, and that during the 80's it comprised 15% of total Yugoslav exports. The politics of "peaceful and active coexistence" contributed to those exports, because the leadership of the Movement of Independent States was used for penetrating the Asian and especially African markets. Local leaders in those countries needed unlimited supplies of weapons in their fights against "foreign imperialism", which was just a euphemism for entrenching various dictatorships. However, supplying weapons to the different dictators caused the crash of military production before the dissolution of Yugoslavia — African states were simply not solvent enough to keep up with their appetites, so that either the producers themselves or the banks that had to credit production went bankrupt.

Military factories were and still remain non-market enterprises whose development, investment, price, and export were determined by the government through the Ministry of Defense production and development planning. The status of military production giants at the time of privatization remains that of holding companies, of course, without any cash, nor with any prospect of getting it.

Even though what is at stake is an evident lack of concern on the part of the government, the directors of these enterprises unwillingly discuss the blame for the position they are in, continuing to call on stories of military secrets in their defense. This in large part contributes to the workers not raising their voices in protest, so that those sufficiently terrified by stories of superfluousness continue to vote correctly and accept the 200 to 500 dinars worth of charity. On the other hand, the example of the fruitless strike of the military factory workers of Kragujevac, already several months old, shows that a cure has not yet been found by this government. But the workers of Kragujevac at least continue to seek a "medicine" — they recently announced a continuation of last year’s protest.

However, among those who are not responsible for what they are responsible for, we find Branislav Savic, the former director of the Kragujevac military factory "Krusik", and present aide to the Minister of Industry. Even though he is presented as the Minister responsible for military production at meetings of various industrialists throughout Serbia — a fact confirmed by another aide in his Ministry — Minister "Bane" told us that he is not in charge of that, directing us instead to the Ministry of Defense. Even though he may not be in charge of military production, it has come to light that he is in charge of a white Mercedes Benz with Belgrade license plates which he received from the Ministry of the Interior of Serbia as General Manager of "Krusik", where he worked until ‘95. The Mercedes was intended as a "payback" for debts owed to this factory. However, when "Krusik" requested the car from Savic upon his assuming new responsibilities of which he is not aware, he produced documents which showed the car to be in his name.

Otherwise in the "Krusik" of Valjevo, the Minister’s base, 70% of production is of a military kind. The number of workers in the factory was reduced from eight thousand to six thousand, because everyone that could leave did so. Of the remaining workers, two thousand are on a permanent leave of absence, waiting for work. Those who wait for work outside the factory receive barely 100 dinars a month, while those inside get in the range of 300-400 dinars; engineers with many years experience get around 700 dinars.

In times past they used to roll in money. Renowned for its missile and rocket program, "Krusik" generated annual sales of 70 million U.S. dollars from exports alone through the 70's and 80's. Contractual demand often outstripped production capacity. Half of Valjevo was built from surplus earnings, while warehouses and other buildings sprung up on factory grounds. Then everything stopped. So much so that earlier annual production of a million missiles of different calibers was reduced to a mere thirty thousand.

The factory "got better" with the braking out of the war with the folks across the River Drina. "Solidarity" was such that in exchange for various missiles and "sows" (airplane bombs) those folks brought cash in sacks. In such good times the then Chief of Headquarters of the Yugoslav Army Zivota Panic said during an official visit that "Krusik" should be ready to manufacture missiles with a range of 1000 kilometers. Seselj probably had that in mind when he was threatening to bomb Rome. During that time another financial boost was received: the government paid "Krusik" its outstanding debt from Iraq in the amount of 50 million U.S. dollars, but according to the official exchange rate, it meant five times less the value. Even five times less was good enough, but only to pay off wages for the next year or two. That was all during the management of Minister "Bane".

The present director Miladin Ciric says that "there are many problems, and instead of jumping from one topic to another, he chooses to postpone the interview until better times". The problems come in the guise of strikes. Research and Development at the factory (engineers and technicians) have begun a strike on hold. They are requesting wage rates of civilians in the Yugoslav Army, which amount to twice their salaries. All they want is a pay increase, they say, as the securing of further contracts and more work are the director’s responsibility.

Established back in 1853, the Arms Factory of Kragujevac (Zastava — Military Manufacturing today) is the oldest industrial complex in Serbia. Here, let us remember that the first Serbian cannons were molded according to "drafts" made by Charles Loubrier and were comparable in quality, manufacturing precision, range and other characteristics, to those made in other European factories of that time. Therefore, the Cannon Moldings of Kragujevac were the precursor of the Serbian industry of today, and are the basis from which were "molded" not only the industry of Serbia, but the entire domestic Serbian-Yugoslav economy. On those foundations were erected in the past decades Zastava’s automotive, truck, tools, and machines factories, as well as their suppliers and partners all across former Yugoslavia.

All that, including the Kragujevac arms factory, began to crumble at the end of the 80's. The fact that at that time Slobodan Milosevic was consolidating power in Serbia and with his party "comrades" from Triglav to Djevdjelije shattering the then Yugoslavia all across, is probably mere coincidence. At least that is what they claim in SPS and JUL. The Socialists responsibly claim that the international hoodlums are to be blamed for everything, including the ruining of Zastava and its arms factory, along with their "unfounded, genocidal sanctions". There are those, it is true, in which group many starved workers of Kragujevac can be found, who believe that the sinking of their factory and the entire domestic economy is inextricably linked to the irresponsible and brutal policies of Slobodan Milosevic. But, as nobody asks them anything — they put up, and shut up.

Be that as it may, the arms factory of Kragujevac, once renowned internationally for its rifle "Kokinka", and domestically for its bomb "Kragujevka" as well as its cannons, is in recent years on the verge of collapse. Last year, on August 19th, over 6000 workers raised up their arms against the hopelessness in their factory, filling the local streets and squares. During the three month protest, the most significant workers' protest since 1945, much was said, and loudly at that. First, that the government embezzled 70 million dollars owed to them, choosing to forget that they exist — in other words, choosing not to care what happens with the oldest Serbian arms factory and its workers. They were angry with Milosevic for signing the "capitulation treaty" in Dayton, in which he instituted a manufacturing restriction in Serbia on guns with a caliber higher than 30 millimeters, which is the reason why the Travnik Program (production of heavy guns and howitzers for the use of the Yugoslav Army and for export) cannot be brought back to Kragujevac after five thriving decades. They requested that the government finally tell them what part of their factory they need so that they can go on and begin manufacturing and making a living with the remainder of their capacity.

The government, of course, did not fulfill any of the promises it made to the striking workers last Spring, while the Yugoslav Army has not yet deposited a single dinar in the accounts of the arms factory of Kragujevac, even though it should have done that a long time ago. On the other hand, Zastava — Military Manufacturing cannot export arms to the United States or to the countries of the European Community because of the outer wall of sanctions, while it has been pushed out of many world markets within the last five years. There is no money in the country, even though there are plenty of arms... Because of all that, over 50% of Kragujevac’s arms workers are on forced leave of absence.

The Namenska Factory in Cacak, in joint venture with Sloboda-aparati, famous for its vacuum cleaners and ranges, and Alatnica, all under the name of Sloboda Company, are manufacturing five times less for the Yugoslav Army than they did when the former Yugoslavia existed. In the good old days the Army participated in the expansion of the factory, while today it figures only as a buyer of arms for maintaining combat readiness, and is a proven bad debtor at that. Before 1990 Namenska realized up to 40 million dollars of annual output just on exports, while last year it made a mere 6 million. All exports used to be through the former government. But the present government, unreliable and unacknowledged, is presenting a problem in every international contract negotiation.

That the government, the loving mother which owes this factory, on the basis of exports alone, 58 million U.S. dollars, has turned into a hated stepmother, has jolted Namenska; but it has not brought it into collapse, as is the case with many other factories in Serbia. Both the management and the Independent Union, which was the first one to be formed in Cacak, consider their factory to be a leading arms manufacturer in Yugoslavia with a future. The General Manager of Sloboda, Radomir Ljujic, indicates that the crucial moment for the joint venture came with the "conquering" of the manufacturing of light arms ammunition, which previously was done at Pretis in Vogosca. The new products had far greater success than PA ammunition, hand-held missiles and other product lines, so that Namenska of Cacak quickly became the biggest and the most significant domestic supplier for the Yugoslav Army. Speaking about export prospects, Ljujic asserts that military factories continue to be potential exporters, even though world demand for arms has gone down. The Cacak factory expects to gross 10 million U.S. dollars this year through exports of ready ammunition to the Middle and the Far East, to Latin America and Africa, and through exports of ammunition components to Spain and Italy. For Sloboda to become a serious exporter of military articles, Ljujic states that several conditions must be fulfilled: the government needs to be internationally acknowledged and international financial dealings need to be established; banks that will "follow" and back production are also necessary.

The only manufacturer of light arms ammunition in Yugoslavia, Prvi Partizan — Military Manufacturing of Uzice shares the fate of its kin in military manufacturing. This company which employs about 1400 workers has been plagued in recent years by low production levels, bad debts, raw materials shortages, irregular wages, no export prospects and frequent management changes.

Debts to banks, suppliers and creditors have climbed to 31.5 million dinars, and outstanding wages from August 1996 to March 1997 amount to another 12 million dinars. The factory’s accounts have been frozen for over a year and a half. All attempts to get the factory moving have ended in disappointment. Promises that the Ministry of Defense will employ 25% of production capacity for supplying the Yugoslav Army, and that last year’s debts in the amount of 2.5 million dinars will be payed off, have all been broken. For 1997 only 3.4% of the production capacity of this factory has been contracted out to the Yugoslav Army. Production for these contracts has not yet begun, even though half the year has already passed. Even when production begins for this buyer, payment is very uncertain for manufactured and delivered products. "This state cannot give up on military production as that would jeopardize independence and security", states a resolution brought in one of the many workers’ meetings at Prvi Partizan — Military Manufacturing, where it is demanded that responsible military chiefs address the workers with the news of the fate of their factory.

Besides the basic program of ammunition manufacturing and tools and machines for its production, PP — Military Manufacturig also manufactures medical supplies and special pneumatic tools, and also does some engineering and consulting jobs. Presently only 15% of production capacity is filled in this way.

The Director of PP — Military Manufacturing, Radomir Visnjevac (also director of the organization of military production factories), believes that there is no alternative to the present program and that it is the only key to keeping the factory alive. He believes that the factory could be consolidated within 3 to 5 years through change of ownership, debt restructuring and foreign investment. His conclusion is that the directors of military factories, together employing over 22,000 workers, are unable to achieve this without the participation of the government.