Rus Wane Equipment - Joint Venture in Russia

Seminar paper from the year 2005 in the subject Business economics - Business Management, Corporate Governance, grade: 1.3, Heilbronn University, course: International Management (Introduction), 16 entries in the bibliography, language: English, comment: The case at hand deals with the emerging issues of an American-Russian Joint Venture in the early 1990s. Wane Machine, Inc., a manufacturer of large-scale heating and cooling equipment enters the Russian market by building an alliance with the Russian state-owned NLZ, which operates in the same industry. The new formed entity, called Rus Wane Equipment, consists of Russian employees in the key positions and three expatriates, which are sent by Wane Machines in order to provide ..., abstract: The case shows the difficulties of a cross-boarder joint venture between Wane Machines, Inc. and NLZ. Wane Machines, Inc. is a US-based company, with 150 years of experience in manufacturing, installing and maintaining large-scale heating and cooling equipment. The corporation is divided up into 4 divisions (USA & Canada -> domestic; Latin America, Asia, and Europe), which unite 50 companies in 160 countries. After a severe economic crisis in the USA and later on in Europe, Wane Machines decided to explore the markets of Eastern Europe as well as those of the Soviet Union (former). In February 1990 Wane Machines formed a joint venture with NLZ, a state-owned manufacturer of heating and cooling equipment. This represents one of the first major commitments of foreign companies, since most companies are cautious investing in Russia's unstable political and economic environment. Due to the fact, that Wanes headquarter for the European division is located in Brussels, the strategic union was registered as a Soviet-Belgian joint venture, named Rus Wane Equipment, with initial capital funds of 11.5 million US $. Wane has a 57 % share and NLZ keeps 43 %. Besides this joint venture, Wane established another JV with a St. Petersbu