Irvine Firm Won Soviet Deal With Old Ties and Pizazz
Charles W. Missler, chairman of Phoenix Group International, said Tuesday that knowing the right people helped his Irvine-based, high-technology company nail down a deal to supply personal computers to the Soviet Union.
But just in case knowing the right people was not enough, Missler said, his small company tried to impress its prospective Soviet customers by flying them to Silicon Valley meetings with corporate chieftains in a leased Lear jet and in a helicopter.
Missler credited “a network of personal relationships” culled during his years in the high-tech industry with helping Phoenix land a highly sought-after contract to supply personal computers to schools and other entities in the Soviet Union. Under terms of a U.S.-Soviet joint venture announced Monday, Phoenix will also help the Soviet Union set up factories to build personal computers.
On Tuesday, Missler estimated that the Samcom venture will generate sales of $120,000 in 1990 and $840,000 in 1991. However, he said, sales could accelerate rapidly after 1991, once the venture begins producing computers at a factory being built near Moscow.
Soviet officials said Monday that the goal of the venture is to supply three million PCs to Soviet schools and three million more to offices and other businesses by 1994.
Missler said “several old friends” in the Soviet Union and the United States tipped him about a year ago that Soviet officials were seeking a foreign partner to supply personal computers. He declined to identify the friends.
“The guys in the Soviet Union were people I’d known for 12 years,” said Missler, a former chairman of Western Digital Corp. and head of several other local high-technology firms. He added: “Some of the people close to Phoenix were aware that the Soviet education ministry was interested in doing a deal.
“When we first met with the Soviets, we tried hard to find out what they really wanted,” he said.
“Everyone they had talked to was just trying to sell them hardware. We suggested we’d be willing to do a joint venture with a goal of not just selling them computers, but helping them develop their own manufacturing capability.”
Soviet officials said that 16 other companies from the United States, Western and Eastern Europe, Australia and Asia competed for the contract. Missler said “all the major” PC makers in the United States were aware of the Soviet interest in finding a partner, although he said he did not know which companies actually bid for the job.
Phoenix sponsored a two-week tour of the United States for top Soviet education officials that included meetings with top executives of Intel Corp., a leading microchip maker, and other Silicon Valley bigwigs, Missler said.
To impress the Soviet visitors, Missler related, his company leased a Lear jet and a helicopter to transport the entourage to its various appointments. Phoenix’s corporate offices are at the former Fluor Corp. complex in Irvine, which has its own helipad.
Although Missler called the contract “a major landmark” for his company, some experts on the Soviet Union have been skeptical of the venture’s chances for success.
None Making a Profit
Michael J. Bayzler, a Whittier College law professor who specializes in Soviet trade issues, said of the more than 700 joint ventures registered in the Soviet Union, none are believed to be making a profit.
Under the agreement, Phoenix has agreed to be paid in Soviet commodities in a form of bartering where goods and services are traded for items that are then sold for cash in another market. Phoenix officials said they have made arrangements with an Austrian bank to be a broker for the Soviet goods.
Bayzler said the Soviet government officially does not allow its joint ventures to engage in such counter-trading, but added that the law is widely ignored.
