KAMA RIVER PROJECT -- APPLICATIONS TO PARTICIPATE IN THE FOUNDRY

• Document Type: CREST
• Collection: Library of Congress
• Document Number (FOIA) /ESDN (CREST): LOC-HAK-15-5-26-1
• Release Decision: RIFLIM
• Original Classification: C
• Document Page Count: 4
• Document Creation Date: January 11, 2017
• Document Release Date: October 21, 2011
• Sequence Number: 26
• Publication Date: August 2, 1971
• Content Type: MEMO

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THE WHITE H?USE
WASHINGTON
GO August 5, 1971
MEMORANDUM FOR
i~z~_ # lif
THE SECRETARY OF COMMERCE
ON-FILE
Commerce
RELEASE
DOS, NSS Reviews
Completed.
The President has decided that you should grant the three pending
applications by U. S. firms for participation in the construction of
the Kama River truck foundry: Swindell-Dressler for $13. 5 million;
C. E. Cast for $37 million; and Jervis B. Webb for $125 million.
Announcement of the approvals should be made in the usual routine
fashion without special fanfare.
Questions may be asked on why we have not approved the Mack Truck
application, or whether approval of these three foundry licenses
signifies blanket government approval of U. S. participation in all
aspects of the Kama River project. Government spokesmen should
respond that. today's decision does not signify blanket approval of
.U. S. participation. The decision was made after considering the
national security and commercial aspects of each detailed applica-
tion. Future applications will be considered on the same detailed
basis. We have not yet reached a. decision on the Mack Truck
application, which involves a broader participation in the Kama
River project than the three foundry applications approved today.
Future U. S. applications for participation in the Kama River
project, including the foundry plant, should be referred to the
White House.
cc: The Secretary of State
The Secretary of Defense
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MEMORANDUM
THE WHITE HOUSE
CONFIDENTIAL
30829.
ACTION
August 2, 1971
MEMORANDUM FOR: THE PRE IDENJ' I)EITT S SEEM
.
FROM:
E
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H
NRY
0unJ.C./(r.,l, Kama River Project -- Applications to
Participate in the Foundry
Secretary Stans has proposed that you authorize him to approve now
three pending applications for U. S. participation in the foundry plant
of the Soviet Kama River truck factory (Tab A~.
The Kama River factory is expected to produce 150, 000 three-axel diesel
trucks annually by the late 1970s. CIA states that three-axel trucks are
not tactical military vehicles, though some could end up in military motor
pools. CIA estimates that the Russian expenditures on the entire Kama
River project will approximate $3 billion, much of which however will be
used to erect factory buildings, workers' housing, etc. CIA estimates
t.at perhaps $1 billion of the total will be used to procure foreign machinery
and technology, of which $200 million might be spent in the United States
if we granted blanket permission for U.S. participation. The CIA analysis
is at Tab B.
The Kama complex will consist of six discreet elements:
1. Foundry plant
2. Forging plant
3. Stamping and pressing plant
4. Engine, gear and transmission plant
5. Assembly plant
6. Tooling and repairing plant
Commerce now holds four formal U. S. export applications. The applica-
tion by Mack Trucks, Inc., of Allentown, Pennsylvania, for $750 million
of technical services and equipment is not active, since Mack is re-
negotiating its arrangement with Russia. In any case, Secretary Stans
doubts that the Mack Truck application is a realistic estimate of what the
Soviets would.procure from that company.
The other three applications are for technology and equipment for only the
foundry, one of the first phases of the Kama complex. Stans estimates
that the total Russian expenditure on the foundry will be $450 million, only
a fraction of which would come from the U. S. The three applications are by:
CrlIVMITr% hTTTA T
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0
CONFIDENTIAL
-- The Swindell/Dressler Company for $13. 5 million of technical services.
The company claims it has a firm offer from the Soviets, and it expects a
follow-on order for $20 million of equipment. Swindell/Dressler is at
Pittsburgh.
-- The C. E. Cast Division of Combustion Engineering, Inc. for $37
million of automatic molding equipment and core making machines. The
Cast Division is at Pittsburgh but Combustion Engineering has plants in
Mass. , N. J. , Texas, Conn., N. Y., Ohio, Kansas, Illinois, Florida, R. I.
and Oklahoma.
-- The Jervis B. Webb Company for $125 million of conveyors and other
foundry equipment. Webb is at Detroit, but it also has plants at Avon Lake,
Ohio, Cohasset, Mass., and Boyne City, Michigan.
These applications are all partially competitive with each other, and conse-
quently if approved would result in exports of less than their total combined
value.
The applications have been pending for some time. Secretary Stans argues
that even if we are not ready to approve U. S. participation in all aspects of
the Kama River Project, we should go ahead with these now before the Soviets
go elsewhere.
I agree with Secretary Stans. The companies have already been unable to
meet two deadlines given by the Russians. Though any approval of U. S.
participation will be seen as a major signal by the Russians, we can reduce
the effect of this if we indicate that we are only approving three specific
licenses at this time but are not now giving approval for U. S. participation
in all aspects of the project. To keep this matter firmly under the control
of the White House, I plan to ask Secretary Stans to submit all future Kama
applications for your consideration.
RE COMMENDATION:
That you approve Secretary Stans' request to authorize issuance of the three
pending licenses: Swindell/Dressler for $13. 5 million, C. E. Cast for $37
million and Jervis B. Webb for $125`n Ilion.
Approve
Disapprove
.CONFIDENTIAL
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MEMORANDUM
THE WHITE HOUSI
WASHINGTON
CONFIDENTIAL
MEMORANDUM FOR: GENERAL IG
FROM: ERNES OHNSTON ??T "
SUBJECT: Kama River Foundry
Attached at Tab I, as Dr. Kissinger requested, is a formal memorandum
to the President on the Kama foundry. (His and your instructions are at
Tab III). The President's memorandum includes the location of the
companies and their plants. (There are some in Michigan, but not in
Gerry Ford's district. Hugh Scott seems to have a near-monopoly on
this project.) The directive and decision memorandum refer to the
specific companies and amounts. The decision memorandum directs
that future applications, including those for the foundry, be submitted
to the President.
By asking that the President approve each application, we are not just
adopting a piecemeal approach but an individual company approach.
As soon as our general relations with the USSR allow us to adopt some
more abstract definition of our participation, i. e. the foundry, we
should do so to reduce the awkwardness of having the President decide
on specific firms in particular locations.
Please have your secretary inform me when the decision memorandum
has been signed.
RECOMMENDATION:
1. That Dr. Kissinger send to the President the memorandum at Tab I.
2. That after the President's decision Dr. Kissinger inform Secretary
Stang by the memorandum at Tab IL
.- rL `7 vat
cc: H Sonnenfeldt
CONFIDENTIAL ~~r ? L
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