Induction Heating
Consarc UK
For a delayed honeymoon Vera arranged a trip to Yalta. The plane was four hours late departing Moscow. Soviet Airlines, Aeroflot, does not make announcements about the reason for the delay. If you are stacked up or delayed on the ground the pilot never announces the reason over his speaker. We were met at the plane with a black Volga because the airport and office were closed. Upon our arrival at the hotel with a voucher for double occupancy, the clerk saw a red and blue passport and refused to allow Vera to check into the same room. After she was convinced we were man and wife she gave Vera a red colored pass that had the notation "Woman for American tourist." The lady asked me if we would need a Russian to English translator.
Russians who stay in the hotel are only allowed to visit the pool during off hours and are not allowed in the special restaurants. We had a separate table with an American flag during our whole stay. When we went to the swimming pool and restaurant together, the amused keeper of the gate always examined Vera's pass. A German tourist saw that I had a Russian girl in my room and protested that they would not allow him the same privilege. He claimed that Americans receive the best treatment.
The English owner of the company approached Rowan with his offer to sell. Rowan passed him to me with the statement that it would provide an aircraft carrier for my Russian business.
The British pound was at an all time high due, to the production of oil in the North Sea while the price of oil was high. His company could not compete against the dollar, so he, like many other companies in Britain, was backed to the wall.
If the Russians paid their credit, then we would be required to expand or pay dividends, which meant taxes for the small shareholders of Consarc. The asking price was low enough, and we needed an aircraft carrier type operation to handle future Soviet trade, due to the ever-changing trade position of the American government with respect to the Soviet Union. The facilities in Scotland were large, but old and dirty. The stated net worth was well in excess of the real value of the company. In a hard look audit, the company was in a loss position of about a half million dollars. They had a loss carry forward of about one-half million that was very attractive to me. I made an inspection just before Christmas 1980.
The purchase was completed in February 1981. We arranged the purchase by buying some services from another of the owner's companies, so it would be all profit to him, and an expense for taxes against our income. Another payment was for administrative services to his company, arranged so that the Scottish company would pay for itself and also make the payment a tax deduction.
Our cash investment was sixty-eight thousand dollars with the managers paying ten percent and owning stock in the company. After purchase we had to refinance the company, cutting the minority ownership to five percent. We sold a project to Bulgaria that turned out to be a money loser. The company was working a three-day week, with the fourth day being paid by some government program in effect at that time.
The company had major debts when we bought it. Consarc's good credit rating allowed us to borrow from Scottish banks and keep the debt in pounds. The pound fell in value, so that meant we paid back much less in dollar terms.
Ruble gave me an enquiry from Bulgaria he had received from his employee, Horvath, in charge of sales to communist countries. I passed on two inquires to this salesman some years earlier from Kramatorsk where Inductotherm obtained furnace orders. The Bulgarian project was for melting in a pressure chamber in order to produce steels with high nitrogen content. The project did not fit Rancocas so I turned it over to the Scots.
For advice on running a company in the United Kingdom I contacted Jess Cartlidge who had returned from experiences in operating Inductotherm. Jess had been groomed to become the CEO in Rancocas but Ruble and Mortimer were in his way. He was not satisfied with his new assignment of heading up international sales but being a good employee he worked hard at his assigned task.
From Rowan's book:
It was an impressive conclusion to Jess's five-year stint in England. In that time he had propelled Inductotherm Europe to the $10-million-a-year level in sales. Moreover, he had positioned the company for continued growth for the years ahead; just as he had in Australia, he'd selflessly trained a new management team to take the reins from him. John Perks, Managing Director, Ian Haywood, Sales Director, John Simcock, Engineering Manager, and Graham Hawkins, Production Manager were men who epitomized what Inductotherm Europe stood for.
On the day the Queen's Award was presented, all of Droitwich turned out for the ceremony, which was attended by scores of white-robe magistrates and other dignitaries in robes and medals. The only element missing from the ritual was Jess Cartlidge; he'd already returned to the United States to tackle his next job, as Inductotherm's first Vice President of International Sales. There were still a few parts of the world left where we hadn't sold Inductotherm furnaces, but that would soon change.
I arranged for Jess to visit Moscow to look over the possibilities of sales to the Soviets. He had been to Moscow earlier where he had a hard time. In a flight from Japan to Europe he stopped in Moscow without a visa. He was held in house arrest until he could arrange an outgoing flight. He enjoyed his stay in Moscow this time and made the rounds of the buying houses looking for business.
Just after Reagan took office in 1981 he announced that Russia was an 'evil empire" and started his administration on the road to tightening the regulations and prosecuting the offenders. Project "Exodus" was formed in the US Customs Department. He was not successful in stopping the British, German or French, as they continued to export to the Soviet pipeline. Richard Perle was selected to work for the Pentagon as a leader in the get-tough team to assist the Reagan Administration to get Congress to spend more money on arms. We were aware of the increased tensions, but the official policy of our Government was to continue trade.
The 1981 shareholders meeting at Inductotherm in 1981 should have been a major celebration because Inductotherm Industries had broken all previous records. The after tax income was $17.6 million and for the first time Rowan's investments outside his core company in Rancocas contributed more than fifty percent of the profits. Consarc's contribution was $5.05 million. When Consarc's accountant asked Rowan to approve Consarc officers bonus checks he objected to the amount. When shown the paperwork that supported the numbers approved by the board he threw the papers at the accountant before signing the checks later.
Rowan's remaining child had just passed her thirty-fifth birthday. It was the understanding in accounting that she now owned thirty percent of the family stock that had been placed in trust for Rowan's three children two of which had passed away.
From Rowan's book:
On May 20, 1946, our first child, Virginia Lynn, was born. She was a $200 baby, I told Betty; $100 for the doctor and another $100 for the 10-day stay in the hospital. We didn't waste money by buying baby furniture like playpens; instead, we built them ourselves.
Rowan was 58 years old and told all concerned that he would retire at 65.
More from Rowan's book:
Before leaving, though, I'd chatted with Rick Burgess, another sailor and longtime friend, and his words of encouragement still rang in my ears. "You know, Hank, if you had spent less time at the office and more in your boat, you might have had a shot at it. You can afford to do whatever you want, now. Why not give the younger guys a chance to run Inductotherm and concentrate on the important things in life--like sailing?"
The opening remark by Rowan at the shareholders meeting was tense. He made a simple statement. I am the founder of this company and have always controlled every decision. I will continue to control this company even after I am dead. The above words were not exact, so I can not put quotation marks on them.
From Rowan's book:
They had just attended our annual stockholders meeting in Rancocas in June 198l. It had been an especially exciting year, not only from the standpoint of revenues, profits, overseas expansion, and new acquisitions, but also in terms of what the Inductotherm philosophy was achieving. It's likely that anyone attending that stockholders meeting would have come away with the same conclusion: that our horizons were boundless. I suppose I would have been disappointed if Ginny, my daughter and, now, my sole surviving child, had not shared this excitement on an even more profound level.
As I would soon learn, she had. A few weeks after that 1981 meeting, I received a letter from Ginny. Ever since that last trip to Rancocas, she wrote, all she and Manning could talk about was the prospect of returning home, and of the two of them taking an active role in the company. Manning's acquisitions background was a perfect match with Inductotherm's needs for expertise in this field. At the same time, Ginny's own expertise in advertising and marketing would benefit both the furnace company and our subsidiaries. They reasoned that both they and the two children they were adopting could be closer to their roots and their families who were all on the East Coast. Each time Ginny and Manning explored the issue, they arrived at the same conclusion.
At some point in time Rowan gave his daughter Ginny a valuable block of stock he owned as a founding investor in Dynamet according to his book.
Rowan kept his private affairs very private and we did not understand fully why he wanted to convert voting shares to non-voting shares. It was assumed that he was taking voting power away from his daughter and his wife Betty in order to maintain control if mother and daughter joined forces.
The other shareholders paid no attention to the stock swap because the terms of their ownership was that upon leaving the company they were required to sell back their stock at book value.
My stock in Inductotherm was not restricted due to a slip-up in Rowan's legal department when the shares were issued. The matter of voting stock was not on the notice of the shareholders meeting. I quietly objected to the vote until due notice was given.
At the meeting at Rowan's house after the meeting I attempted to discuss the situation with Ginny but she would not comment. Rowan called me a couple of days later with a statement that he never wanted to speak with me again. I told him that I would not sell the stock to a third party but on principle I would sell it to him if he really needed it at an agreed price.
The Inductotherm salesman that covered the north east gave me a sales lead for a furnace to produce temperatures of 5000 degrees F for an company in Maine called FMI. I flew into Portland and rented a car for the drive to Billiford to meet with this customer. A young engineer gave me the specifications and took me on a quick tour of their facility. The induction furnaces for converting carbon to graphite were all used equipment and included some items from the Beryllium factory where I worked in the early 60's. I saw rolls of rayon felt being loaded into simple ovens for conversion to carbon felt. I saw the facility for molding fiberform carbon insulation that used scraps from the carbon felt process. All these products were processed in induction furnaces that consisted of graphite tubes packed with lampblack insulation. The heating element weighed several times more that the heated load and took days to cool down before they could be opened. This was the perfect place to sell my miniseptor furnace. My selling pitch fell on deaf ears.
I was not aware that in a building on the property was the factory that produced most of the nose cones for America's rockets using wound carbon fibers impregnated with pitch. I also did not know they were using an isopress for this process. At some point in time a large isopress purchased by the navy for Beryllium Corporation in the 60's and installed under the supervision of Joe Loan had been moved to that building from Hazleton. I also did not know that FMI was an exporter of isopress equipment and other equipment for the production of carbon-carbon to countries that included France, Japan, and Taiwan.
A display in the lobby caught my eye. It was the insulation package for silicon crystal growing furnaces made of fiberform covered with a carbon foil material. There was no business here but the day had not been wasted.
A Consarc salesman received an enquiry from Bendix for equipment to process carbon aircraft brakes. The Concorde was the first to use this type brake and the F16 military jet followed. Fuel prices were rising and predicted to rise farther as the CIA continued to predict that the Soviet Union was running out of oil. It was claimed that use of this material would allow a 747 to stop without using reverse thrusters. An extra 4000 pounds of load could be added to each long flight.
I observed the process at Bendix that consisted of wetting carbon cloth with an epoxy before it was warm pressed into a shape. The epoxy in these shapes was then charcoaled in a simple oven just like I had observed in carbon cloth production from rayon cloth in the early 60's.
I had expected the next step to be treatment at very high temperatures but to my surprise when I looked into the furnace the hot zone was a medium red. This meant the furnace was operating at about 2000 degrees F. Stokes mechanical vacuum pumps were operating at medium levels or at about 20 mm of Hg. Methane gas (natural gas) was flowing into the hot zone where carbon was stripped from the natural gas and deposited on the carbon fibers to increase the density of the part to the required level.
All sorts of light bulbs began to flash in my mind. I was aware that rocket motors made with a similar process were selling for thousand of dollars per pound and heat shields on the shuttle were at made in a similar manner. It was also common knowledge that reentry tips for ballistic missiles were made from carbon fibers.
My thoughts were in the direction of making carbon components for a wide range of uses for less than $1 per pound. The Soviets were working at full speed to build a gas pipeline to Western Europe. A few months earlier I had flown from Moscow to Tokyo over Siberia and observed a very large area of flames that was oil wells burning the excess natural gas. My quick guess was that a million tons of carbon could be retrieved.
Bendix was using a Pillar electronic induction power supply with a heavy walled graphite pipe as the heating element. All the cost components were known to the customer and Consarc's possibility of making a profit were gone. A resistance furnace with many zones for processing would give us a chance to obtain the business. I walked away from that customer with an order for an engineering study on the new furnace concept.
Back in Rancocas my dreams took me to the use of cow manure from the large indoor diary farm next door to produce to produce methane. I also studied the possibility of using the large waste dump at Mount Holly a few miles away. The people of the area were complaining that methane gas was causing a foul smell in a large residential area.
I thought I had a tiger by the tail. I called Dr. Robert Froberg from Pfizer and arranged a meeting. Bob was an old customer and the leading scientific mind for converting methane to useful carbon. At that moment he was dreaming his own dream to make carbon products and was making plans to buy the Pfizer carbon operation to fulfill his plan. My attempt to obtain the brains for a carbon company was put on hold.
A presentation was given in the summer of 1981 at the American Soviet Trade Council for a heating system using the miniseptor concept. Roberts gave a presentation on our standard products. A potential customer visited my presentation of a mini susceptor with reaction boxes. The hot item of business at the time was carbon friction materials for aircraft brakes.
That evening Vera had several of our friends in her apartment for dinner. These would be Entrepreneurs knew they were living under a failing economic system and were always hungry to hear my fairy tale business plans for small enterprises. Their favorite story was setting up a small operation to produce tampons for the female population of Moscow.
This night I had a fantastic plan to produce diamonds using natural gas. To make the story interesting I started with an indoor cattle farm near the Moscow airport to produce milk and meat. This indoor farm was complete with computer controls and classical music so the cows would be contented. As the farm grew, including ground meat for McDonalds in Moscow, we had to find a good use for the manure. The story ended with the conversion of manure to natural gas and then into diamonds.
I was not able to visit again Vera until the Christmas holidays in 1981. I stayed at the Cosmos hotel on Prospect (Peace) Mir just outside the center of Moscow. Vera stayed with me at the hotel. She arranged for a table at the hotel's restaurant for the 1982 New Year celebration. We went to bed at 2 AM. The floor lady tried to stop her entering the room. Later she called the police. The policeman gave her a lecture when he realized that he was attempting to throw my wife from the room.
A big job had to be found to fill the large factory floor in Scotland. The Rumanian government was planning to activate their aircraft industry on a grand scale. Nixon had used this country as a stepping stone to China. Carter had given most favored nation status to Rumania as a thorn for the Soviets. The dictator of Rumania did not give even minor human rights to his people. He was building an industrial base on the backs of his people.
The group in Scotland worked hard to prepare quotations for the furnaces required for this project. We were in a position to sign a very large contract, using the World Bank as the source of money.
The banks of Poland defaulted. Everyone had suspected that the Soviet Union would bail them out. Moscow had their problems. The effect of this meant that no western bank was going to finance the Rumanians. The large contract for Scotland was not to be.
The project at Chelyabinsk could have been a repeat of Kramatorsk. This time I prepared to make life better for our personnel. Matsutov agreed in advance to arrange for housing with kitchens, so the men would not have to live in hotels. Consarc purchased microwave ovens, mixers, blenders, short-wave radios, VCR's with a library of films, and other items to make life bearable. One container had a box marked "For Consarc Engineers only." This box contained canned foods, spices, catsup, soups, pasta, Coke, beer, and other items in large quantities.
We first arrived in Chelyabinsk in April 1982. The quarters were as promised and included a sitting room, bedroom and kitchen in an apartment building near the factory outside the main city. Most of the building was controlled by the factory and had a duty person at the front door. A central kitchen was also provided so we could buy our meals to order if we wished.
The site was ready, and the construction crew had already started welding the plates together. We set up the drawing office that included copying equipment. The documentation was arranged in good form so we could find or modify the plans as required. We were furnished two full time translators. These young ladies were schoolteachers by training. The older one was married to a man in the food distribution business. The younger one was unmarried and naive, as this was her first job after completing school.
A van picked us up each morning at the scheduled time. The translators rode to work with us. At lunchtime, the driver took us home for lunch, which we had in the facility provided most of the time. The translators ate their lunch with us.
The steel factory at Chelyabinsk, on the edge of the Ural Mountain range, employed about forty thousand people. Its products ranged from steel for the appliance industry, stainless steel and superalloys for many purposes. The factory had an import export department that was in charge of all of our activities except the technical part. The director of this department read us the rules of our stay in his factory and town.
The Soviet Union published new rights for foreigners just after the Helsinki agreement. These were explained to us, as well as our travel limits without approval and escort. We were limited to the little town near the plant, and it was suggested that we be off the streets by eleven in the evening.
Vera was assigned the task of finding fresh food at the local shops. Meat and butter were rationed by a ration book for the local population. There was plenty of food at shops that charged the supply and demand prices. Our social activities during the first month consisted of a visit to a local natural museum and a Saturday dinner at Matsutov's home. Reshat had become the chief engineer of the factory, and it was putting great demands on his time.
The factory had a country vacation spot about seventy miles into the country, in the foothills of the Ural Mountains. Matsutov built a Finnish sauna near the edge of a large clear water lake when he was a young steelworker. We spent a weekend at this camp with Matsutov and the staff who had been with him in the USA and their wives. The first evening started with a dinner cooked over an open fire in the fireplace. We consumed about a bottle of vodka each before entering the sauna. After about one hour in the sauna we ran across the ice to a hole which had been prepared and slipped into the ice water. It may be hard to believe, but that water felt warm. The next day we attended a Russian bath. This is a steam bath that features beating each other with birch branches. After the bath it feels good to go outside and dump ice water over your head. The main feature on the menu was pickled mushrooms that had been picked from the forests surrounding the lake.
We departed Chelyabinsk just before the May Day holidays. Vera remained in Moscow because she did not yet have permission to travel with me. The trip included a stop in Rumania for another attempt to obtain some business. We returned to Moscow with a load of luggage in late May 1982. Most of the luggage was for creature comforts and included a quality air mattress. We used this to bridge two small beds to make a comfortable sleeping bed. Also in the luggage were also ten video films to add to the collection.
The only problem on the job was moving the main transformer into position. It weighed sixty-five tons, and the crane was only rated to lift fifty tons. No one would take responsibility ordering the lift.
Matsutov came in Saturday morning with a lone crane operator whom he paid an extra fifty rubles, and they moved the transformer without any problem. His ability to get things done was the reason he had climbed to the top.
The area had a foot race with several groups of ten members each. The race was through the city, with a baton being passed at predetermined points. When my group of steelmaker saw the video camera, they arranged to have me ride the lead truck so the leaders could be filmed throughout the race. It was a cold morning, so they almost froze to death before the filming was completed from the open truck.
Alex called me early on a Sunday to arrange a meeting. I had not seen him in a long time and had no wish to see him at this time. I asked if he was following me. His answer was that he was in town because a German company was installing a specialized cold rolling mill he had purchased for a steel mill in the Ukraine and the government decided to install it in Chelyabinsk. He understood that I was video filming on the street and asked me not to take pictures that would show the lines at the shops or any other scenes that showed poverty in the region. I told him his metal samples were packed in Styrofoam under the bricks, but I would have to wait until Lona came to know in exactly which container. He would never find the needle in that haystack. I had made up my mind that he would not receive any more favors from me in this changing political climate.
It was clear to me that this project was not going to be a repeat of the Kramatorsk affair. I met a new client in Matsutov's office one morning in late April 1982. He had attended our technical presentation the Trade Council in Moscow. Our job was going well, and the new customer was very impressed with our abilities. He had fallen in love with my miniseptor idea. I did not tell him that I had not made it work and could find no other customer that would let me try again. Our translators helped him prepare preliminary hand-written specifications.
I sold the layout of the equipment and some very clever ways to load and unload the furnaces. We all assumed that the insides of the ovens would work. The customer informed me that this group was new and would be organized American company style. They wanted a project engineer for their task, and they had selected me. They would need other facilities such as impregnators, presses, isopresses, laboratory equipment and other things.
The customer was fully aware that we would not supply pyrolytic graphite producing equipment or hot isopress equipment above 5000 psi. These general concepts with sizes were established by starting with their largest block that was a cube of twenty inches stacked two high with three reaction zones inside the susceptor.
The Soviet buying house wanted assurances from the export authorities that this type of equipment could be exported. The Soviets were skeptical because of the Olympics and pipeline embargoes. They also wanted a letter from the senior management of the company stating that Consarc wanted the business.
I reported on the new business in the Soviet Union on my next trip to the States. I translated handwritten specifications from the Soviet client, noting those items we would not quote because current regulations would not allow their shipment.
MEMORANDUM
DATE: May 10th, 1982
TO: Roberts
FROM: Metcalf
SUBJECT: Potential Business - Soviet Union
The attached are preliminary specifications for a cold isostatic press for 15,000 PSI, a carbonizing furnace for 1600 C and a graphitizing furnace for 2950 C from some clients in the chemical industry in the Soviet Union.
This inquiry came as a direct result of the seminar which we put on a year and a half ago.
The Soviet Trade organization will not formalize this inquiry unless they have reasonable understanding that, if we are able to conclude a contract, we can in fact ship it.
This equipment is not on the embargo list as presently written. I suggest that we have our Scotvac group pursue this order due to the ECGD insurance coverage available to them. The value of the contract will be between three and ten million dollars.
If you desire to go ahead, it will be necessary for either you or John to write a letter for me to hand carry to the Ministry of Foreign Trade expressing our desire to fulfill contracts on the above listed equipment.
I will arrange for Scottish sales personnel to meet with the buyers in Moscow or Chelyabinsk to discuss the details. I will attend these meetings.
You may wish to put the matter before the Board due to the current political situation.
James F Metcalf
Political times had changed. We were now trading with the "evil empire." The CIA did not seem to be reading the mood of the Russian people. Body bags were being returned from Afghanistan and while they could not march like American protesters in the Vietnam War era silent protests came from the flowers on the street each morning. Prices were rising at private market places. The people's faith in Communism was falling like a rock. The people were openly discussing the fate of Russia after the death of Brezhnev.
Roberts wanted to make sure we told the Russians that we were not in the carbon business and did not understand it. The following letter was delivered to Machinoimport on my return to Moscow.
CONSARC
RANCOCAS NEW JERSEY
May 13, 1982
Ministry of Foreign Trade
Moscow, USSR
Gentlemen:
Consarc's Vice President, James Metcalf, has received a preliminary inquiry and specification for equipment to produce graphite by means of high pressure pitch impregnation, carbonization and graphitization. This letter is to confirm that Consarc is very interested in supplying such equipment to you.
For reasons of geographic proximity, we would prefer to handle this inquiry through our subsidiary in the United Kingdom, Consarc Engineering, under managing Director, Thomas Dick. Jim Metcalf will be available to assist Dick and his team in this work.
I want to advise you, that while Consarc has considerable experience in equipment for the production of graphite, we do not have direct experience with the process of high pressure pitch impregnation and carbonization in the manner you propose. However, we believe we have sufficient experience to be able to design and manufacture this equipment. We will be able to guarantee equipment performance, such as pressure levels, heating rates, cooling rates, and other items, but we will not be able to provide guarantees of overall production rates or product quality.
We look forward to working with you on this project.
Sincerely yours
Roberts
Roberts agreed with me that this would be good business for our struggling Scottish company. He sent the following memo to the director of Consarc Ltd. in Bellshill Scotland.
TO: TR Dick
FROM: Roberts
SUBJECT: Potential Business in Soviet Union
May 14, 1982
1. Preliminary specifications received by Jim Metcalf from the USSR covering a line of equipment for production of high density graphite by high pressure pitch impregnation of a preform, followed by heating to produce carbonization, followed by high temperature heating to produce graphite. It's anticipated that the first two steps of this sequence will be repeated as many times as necessary to obtain graphite of the required density.
- A cover memorandum dated May 10, 1982 to me from Jim Metcalf.
- 3. A letter from me to the USSR Ministry of Trade advising them that we will wish this inquiry to be handled through Scotvac. This letter has been hand carried to Moscow by Jim Metcalf.
Jim Metcalf feels that this is a bona fide inquiry having the potential to become an order in the $3 - $10,000,000 range depending on just how much equipment the USSR wishes to buy. We have checked the Commodity Control List and it is our interpretation that this equipment is presently exportable to the Soviet Union without a specific export license, this means, it is exportable under a GDEST type general license. However, it is also my understanding that the NATO governments are presently reviewing the list of items for which a specific export license will be required and there is the possibility that the classification of the equipment may be changed. It's my understanding that if Consarc Engineering were to receive an order for this equipment and start construction and should Consarc Engineering then be prevented from shipping this equipment to the USSR by a subsequent change in the license regulations, then Consarc Engineering could recover all, or virtually all, of its costs under an ECGD cover. However, I would like to get verification of this fact. We must also face the possibility that in the event this turns into a larger order, the Soviets may want five year credit and we should investigate what credit might be available for them in Great Britain.
Roberts
Roberts and I understood what we were selling sufficiently to understand that the US government could decide to put this type of equipment on the export control list. We both agreed that the business would be done in Scotland if we got the order. It was not discussed, but generally understood, that I would move to Scotland if we got the job.
On June 23, 1982 in London I gave Tom Dick the specifications for the equipment he should bid after obtaining approval to export from the UK. Our technical discussions on this matter lasted less than two hours. Dick already understood the furnaces and said he would get up to speed on the isopresses.
Department of Trade
London, England
12 August 1982
Dear Sirs,
We have recently received an invitation to tender to the USSR for equipment as follows: -
1. 6 - vacuum Chamber Induction furnaces for carbonizing, with a maximum temperature of 1600 C, the size of charge being 500 millimeter cube - six per charge.
2. 2 - Vacuum Chamber Induction Furnaces for graphitization with a maximum temperature or 3000 C, with a charge size of 500 millimeter cube - six per charge.
3. One - Isostatic Hot Press, working pressure 300 Kilogram per square centimeter, maximum temperature 600 C for the impregnation of carbon with pitch.
4. 1 - Vacuum Induction Laboratory furnace 1600 C, charge size 500 millimeter cube - one off per charge for carbonization.
5. 1 - Vacuum Induction Laboratory furnace 3000 C, charge size 500 millimeter cube - one off per charge for graphitization.
With regard to the Export of Goods (Control) Order 1981, items 1, 2, 4 and 5 are outwith this control order therefore should not require any Export license. However item 3, the Hot Isostatic Press is mentioned in Group 30, on page 32, item 3B but since we are less than 351 Kilogram per square centimeter in pressure, we assume that we are outwith the umbrella of the Export of Goods (Control) Order 1981.
In the contractual documents we have received from the USSR, we are obliged to seek approval from your Department before a contract can be concluded.
The wording on this is "The seller to furnish Export license or letter that license is not required, within thirty days of signing of the contract. The contract will come into force when this document has been furnished.
We would like your confirmation that such a letter would be forthcoming should we be successful in obtaining this very important export order.
We look forward to receiving your early reply.
Yours faithfully
DICK
The job continued to go well in Chelyabinsk with only minor delays due to missing parts that we flew from Consarc to Chelyabinsk. Other minor delays were due to month long summer vacations. One week was lost because the construction workers had to pick potatoes. For the first time I realized that the social economy set up by the Communists was in its final stages before complete failure. Instead, the CIA never published any documents and the press never saw the truth. The CIA published reports that the Soviets were running out of oil. They continue to be major exporters today.
It was time to bring a man from Inductotherm to start up the melting equipment. This man brought his wife, so Vera was able to meet and talk with her first American woman. We had a very busy summer with very little time for social activities. We spent one weekend at the country lake with Matsutov and his family. Matsutov drove us in his car from Chelyabinsk to the mountains. A soldier was on the road with a machine gun. He stopped us for a search. Matsutov was very upset with this situation in front of an American. It seems that a young soldier in training had deserted the army. Every young man had to serve two years in the army. The Soviet Union sent the boys to locations a long way from home so they could be trained without assistance from their family. After basic training most army men were used in simple construction work and farm labor.
The lake in the Ural foothill is about seventy miles long. Only lifesaving motor boats were allowed to be used. The other boats were rowboats and sailboats. The water was clean enough to see if a penny was heads or tails at a depth of twenty feet. We walked alone in the woods with Matsutov to discuss what could be done to help Vera get her visa to travel with me. He agreed to help and suggested that we write him a letter.
During a trip to Moscow Vera took me to the front door of KGB headquarters. The Soviet system allowed its citizens to contact the higher-up's from the street from time to time. She was able to get past the secretaries using my America passport, to their surprise. The man we met had the rank of a one star general. He listened to our story and agreed to look into the matter. We met him again the following morning at the time appointed. He told us that it was not the KGB holding up Vera's visa, and the cause was a political matter. He made sure that both Vera and I understood his important advice. He repeated the reason several times. "Exit not desirable." This was not a legal reason, and he implied that we could use it to our benefit. We asked for a letter, but he would not give us one.
The excessive amount of work was getting to Matsutov. His combat wounds were acting up. The plant sent him away to the south for six weeks rest that summer. This is one of the rewards for those who reach the top in the Soviet system. A letter was written to the plant director giving all the facts of Vera's visa status, including the fact that the reason was "Exit not desirable." This letter was acknowledged, stating that the matter would be looked into. When Matsutov returned he wrote a letter to Metallurgimport attaching my letter to the plant director asking for their support and assistance. Matsutov sent this letter to Moscow, using the translator that was used as our escort.
Metallurgimport knew the letter was coming and asked me to bring it to them alone. The letter was not sealed, so we were able to make copies showing the official numbers and stamps. Metallurgimport stamped the letter and affixed their number that they allowed me to copy. Documents were holy in the Soviet system and do not go away. They told me that they could not assist in a political matter but wished me luck.
A stop in Scotland in late October 1982 on my way home was to look at their progress in the selling effort. Specifications and drawings had been completed, including some clever isopress ideas. Scotvac had no foundation technology for equipment or processes. The drawings were beautiful.
The Department of Trade and Industry (DTI), the British counterpart to the Commerce Department, approved the proposed contract on October 4,1982.
From: Department of Trade
To: Consarc Engineering
October 4, 1982
Dear Sirs
Your letter of 13 August 1982 refers.
I confirm that the equipment listed below is not subject to embargo restrictions and does not require export licensing.
6 - Vacuum chamber induction furnace for carbonization with maximum temperature 1600 C size of charge being 500 millimeter cube - six per charge.
2 - vacuum chamber induction furnace for graphitization with a maximum temperature of 3000 C with a charge size of 500 millimeter cube - size per charge.
1 - isostatic hot press working pressure 300 kilogram per square centimeter maximum temperature 600 C for the impregnation of carbon with pitch.7013
One - vacuum induction laboratory furnace 1600 C charge size 500 millimeter cube - one off per charge for carbonization.
1- vacuum induction laboratory furnace 3000 C, charge size 500 millimeter cube- one off charge for graphitization.
Yours faithfully
MP Marshall
The people at the Department of Trade were not dummies. They knew exactly what they were approving. They took their time in answering the request.
The approval document was delivered to the buyers in Moscow on November 10, 1982 on my way to the Ural job. It was time for the scheduled major meeting of the US-USSR Trade Council. The American government had approved this meeting even though the public rhetoric at the time about the USSR was not good. Some high-level government officials were present, including Senator Dole. Chief executives of many Fortune 500 companies and banks were scheduled to attend.
Vera met me at the airport with the news that Brezhnev was dead. She had learned that from the taxi driver who told her that the airport was to be closed in a few minutes for incoming traffic. The next morning the news was official and the city of Moscow was sealed off. The center was closed, with soldiers marching around the inner circle road of the city. The selection of Andropov, former KGB boss, dashed any hopes for changes in the system.
The Soviet authorities decided the meeting was important enough to go on. History was being made, and Vera was right in the middle of it. She was in seventh heaven. She had official documents that proved she was the wife of the head executive of an American company. Not many wives had arrived due to the uncertainty of the meeting. She was the best dressed and prettiest of the lot and was the most popular. She was the only Russian Baba (babe) that was shown on Soviet television as an American woman that week. Vera was hobnobbing with the rich and having a ball.
Receptions were a nightly affair, but the last one was for the chief of each company, without his wife, at the Kremlin. This was my first formal dinner. I arrived by taxi and walked the short distance to the hall. Seating was alphabetical by company name. Consarc was seated beside the President of Coca Cola and near the Chairman of Chase Manhattan bank. I left the hall and was the only one who walked past the guards at the Kremlin gate. All of the other American companies had a car and driver to take them to their hotels.
Alex telephoned me with a request to meet him in his room. Marchin, the manager of the operation that was going to produce carbon parts was with Alex when I entered the room. My first question was about Vera's visa with a real threat that I would personally withdraw from business in the Soviet Union if they continued to refuse her an exit visa. It could not be a permanent exit visa because she would not renounce her citizenship. Alex told me these questions were well beyond someone of his rank, but he understood the paperwork had already been approved.
Marchin told me he was going to arrange the new operation like a small American business. He was not a technical man, but rather an executive, and wanted a modern office setup, including the best in office and communications equipment. He wanted a drawing office even better than the one he had seen in Chelyabinsk. He had a list of equipment and we had to find technical names for it. An electric typewriter was to be named an" electrically operated data recording device." The office telephone system he wanted was to be named an "electronic data transmission network." When I was puzzled at this farce, Alex told me that the buyer the system had selected would never allow Marchin to buy a typewriter, because it could be purchased from Soviet sources. I wrote a document listing all these items beside their real names. I was not breaking laws, but Marchin was sticking his neck out with Alex his cover in high places. Alex continued to want the cassette system with the thousands of company brochures, data sheets and price lists. I told him that the full system would be worth in excess of $10,000 and that might be hard to hide from the Soviet buyers.
Dick arrived in Moscow shortly after the US/USSR trade meetings were concluded. Machinoimport was the trading house and the head buyer was Ivanov. He saw right away that the end his client and Consarc had not yet agreed on technical details and scope of supply. This was not buyer's job so he provided a room and a translator to begin the task. Dick had done his homework and was a master at understanding the technical details and leading the customer to agree with him.
Dick wanted many details from the customer to set his design conditions. I had to make sure we did not sell something that could be used for pyrolytic graphite and that the isopress sold was less than five thousand pounds per square inch. These were the limits set up by export regulations.
There was a leak in the chamber in Chelyabinsk that they could not find with the mass spectrometer. I left Dick alone with the new customer in order to visit the job in Chelyabinsk. I found the leak using air pressure and soap. Sometimes simple procedures work best. Final tests had to be completed and test melting was scheduled for March.
Vera obtained her exit passport from Russia in November 1982 almost three years after we were married. This had been a long fight. The reason she was allowed to go was the release of another batch of people, who had declared that they were Zionist. This move was to improve the human rights argument with Reagan. Vera had not worked in a factory that made secret items for the prescribed period, but I told her the final blow was my threat to stop doing business with the Soviets.