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As recently as eight years ago, this plant, one of the largest in Volyn, produced 8.6 million tapered bearings and over 13 million universal-joint bearings. The profits were enviable.

Sweden's SKF bearing company knew what it was purchasing. The State Property Fund rescheduled the privatization plan. The plant was originally intended for a certificate auction but then sidetracked for a non-commercial competition. The latter was won by SKF which netted 28% of the state's block of shares. But this did not satisfy the Vikings' heirs. Well before the competition had ended, they began to buy out the enterprise's shares through a commercial intermediary. Over a three week period they acquired 48% of the stock, out of which Hr 8.5 million were paid to current and former workers who were happy to relinquish their share of state property. Factory management had an 11% stake, but they also voluntarily gave it up.

A year has passed under SKF, or should we say, under the Varangians (as Vikings were known in our history - Ed.)? They, incidentally, have met their investment obligations for the period in question. LPZ first deputy general manager for finance and projects Max Robertsen assessed the situation like this: "Last year we planned to invest $6.5 million. We intended to use the greater part of this money on equipment and technology development. But it turned out otherwise. Almost all the funds were used for paying taxes and wages. This cannot continue so. We expected better results."

Indeed, last year for every hryvnia paid as wages 1.25 hryvnias went for taxes. Moreover, the mammoth plant is moaning under its own weight. Its area is seventy hectares. It was not completed in Soviet period, but still it has an infrastructure designed for a fully installed capacity. It takes tremendous money to maintain this. In addition, the enterprise is oriented toward consumers from Russia, Belarus, and Ukraine. The latter buys a tiny number of bearings, while the former two are able to settle accounts only by barter. After the August 1998 crisis these settlements are often made via arbitration courts. Thus, there are no adequate sales. Nor has the relationship with local authorities been settled: LPZ provides heating from its own sources to a Lutsk neighborhood, but the city fails to refund the money. The debt has reached Hr 2 million.

Deputy general manager for social matters Yuri Syvenko described another problem, by far the most important. Our workers are not used to handling items with care; they usually throw them down. But even two microscopic defects on a set of rollers is enough for the whole item to be rejected, for this item will make two much noise in operation. In addition, the Swedes resent workers working four hours a shift at best, and smoking or hanging around the rest of the time. The result is that Germany's LЯchow ball bearing plant, employing 1,000 workers, produces 120,000 bearings a day. LPZ, employing 2,900, turns out 360,000 bearings a month.

Thus, SKF says it cannot tolerate this any further. This year the company will only utilize its investments for production development and plant restructuring, rather than throwing them down the drain. Production will be confined to certain areas, while others will be mothballed or decommissioned. A new model for the enterprise is in the works. The reason for it is a narrow sales market, rather than a desire to economize on Ukrainians.

Simultaneously, those who stay behind at LPZ will have to work according to world standards. Not only the Varangians demand this; so do the current realities which we, still used to Soviet ways, find it so hard to get used to.