http://havanajournal.com/business/entry/german-company-does-500m-machine-sales-deal-with-cuba-3232/

HavanaJournal.com: Cuba Business

German company does $500m machine sales deal with Cuba

Posted May 18, 2007 by publisher in Cuba Business.
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http://www.guardian.co.uk

Thomas Lang, a Bavarian businessman, proudly describes his delight at striking a deal with the Cuban government.

“We’ve been asked to send 808 pumps to help the country’s infrastructure get on its feet,” he tells an audience at Munich’s chamber of trade and industry (IHK), noting the dearth of clean drinking water for the Caribbean island’s 11.4 million inhabitants.

Mr Lang’s firm, Wilo-EMU, represents one of hundreds of companies in this most capitalist of German states that have agreed to help communist Cuba’s command economy, which, despite the United State’s embargo, has of late found a new lease of life, largely thanks to help from Venezuela and China.

In its blurb to businesses, the IHK claims: “Cuba has far more to offer than beautiful beaches and cigars. Its rotten infrastructure offers German companies splendid business possibilities.”

Cuba has a thirsty need for German technology to replace its rusting Soviet-era equipment. Bavaria even has its own “ambassador” to Cuba to oversee developments and before his recent illness Fidel Castro held through-the-night talks with German engineers about diesel motors and electricity generators prior to deals being struck.

A $500m (�250m) agreement has been struck between the Free State of Bavaria and Cuba, under which the German companies are providing the island with an array of generators, antennas, motors, and medical technology. By comparison, the US had just $340m trade with Cuba last year, mostly in agriculture.

The most delicious part of the deal for Bavarian traditionalists is the request for the luxury carmaker BMW to provide all of Cuba’s ambassadors with its Series 1, 3 and 5 models. Even Ra�l Castro, who is standing in for his sick brother, is to get a Series 5 car.

As far as the Cubans are concerned, Bavarians have proven themselves to be loyal participants in the revolution. By improving infrastructure they are helping to put socialism on a solid footing for the post-Castro generation.

“There are many points of the Cuban revolution that are interesting for Bavarian firms,” Eduardo Escandell, deputy trade minister, tells the suits. “We’re happy you want to take part.” And please, he adds, continue buying Cuban cigars, rum and honey in return.

His words sealed a “memorandum of understanding” between the Cuban government and Bavaria this week as part of the island’s attempts to broaden its international interests - as well as thumbing its nose at the 45-year-old US embargo. “For 50 years we’ve suffered from the blockade but we’ve also survived without America for 50 years,” Mr Escandell told the Guardian.

“We will continue this fight. We need products, and we’re happy that Bavarian companies can provide them. It’s not about politics, because trade is trade.”

Lederhosen

As if to cement the deal in spirit, a band of lederhosen-clad men called the Cuba-Bavarians strikes up, switching from oompah-pah to cha-cha-cha numbers on their guitars and guiros [a percussive gourd] with ease. Beerhall drinking songs and Che Guevara tributes fill the air. The new-found understanding between Germany’s richest region and the communist state is striking. What, after all, have the two in common?

More than meets the eye, as German commentators are keen to point out. Bavaria has been ruled by the same party, the Christian Social Union (CSU), for half a century; Castro has ruled Cuba for 48 years. Both understand the benefits of continuity in power.

But the potential for conflict is huge. At its popular beer-hall rallies, the CSU rails against any way of thinking that does not tally with its Catholic, white, conservative, male-dominated values.

Communism is despised by the CSU to the extent that the party has invited members of the Cuban opposition to its Alpine training lodge to school them in ways of overthrowing Mr Castro.

But talk steered away from sensitive issues this week. Instead, the stress was on pragmatism. “Bavarians pride themselves on their mix of tradition and modernity - the so-called laptop and lederhosen approach,” says Stephan Mey, of Augsburg-based MAN Diesel, which is selling generators to Cuba. “The Catholic side of our character means we’re always a bit flexible. If we do something we know we shouldn’t we can always go to confession afterwards.”

Cooperation is not without risks. The European Union has frowned on dealing with Cuba since Mr Castro’s arrest four years ago of 90 critics of his regime and the US is quick to punish firms that break its embargo. German companies with US subsidiaries, or which are listed on the New York Stock Exchange, have had to set up in places such as Egypt.

But Mr Castro’s illness has slowed the cooperation. “We noticed when he was ill that payment process was much more sluggish,” says Mr Mey of MAN. “The power vacuum has been obvious.”

Member Comments

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On May 18, 2007, publisher wrote:

I like this part

“The most delicious part of the deal for Bavarian traditionalists is the request for the luxury carmaker BMW to provide all of Cuba’s ambassadors with its Series 1, 3 and 5 models. Even Raul Castro, who is standing in for his sick brother, is to get a Series 5 car.”

Maybe I should have titled this story “Raul Castro to get a BMW 5 series” grin

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On May 19, 2007, Cuban American wrote:

yup, but remember under Castro all Cubans are equal ..... the guy has an estimated worth of 900 million, if thats not hypocracy in itself I don’t know what is.  Now he has some nice new BMW’s to add to that.

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On May 21, 2007, Victor Bok wrote:

Remember when El Che made his cohort ditch a confiscated jaguar for a ‘59 Chevy like the one he was driving.

Remember the negative reaction in Cuba to Huey Newtown and his fellow exiles cruising around Havana in a limo.

El Che and Ben Harper remind us that although we must wear our diamonds on the inside…

...a car is a car.

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On May 21, 2007, publisher wrote:

I understand Raul and his family like and enjoy the good life while Fidel remains, or appears to anyway, frugal and a man of the people.

Maybe this is just Raul getting settled into his new position. Why not give himself a new BMW…for free no doubt. Or, maybe on “credit”.

Good luck Raul, you are going to need it.

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On May 23, 2007, Cubana wrote:

All Cubans are equal… but some are more equal than others.

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On May 25, 2007, MiamiCuban wrote:

First, I just don’t buy the story that Fidel personally is worth $900 million.  That’s completely illogical.  However, IF there is such an account with this amount of money, then it appears it is intended for deals such as the one listed in the article, for generators and modernization of other outdated technology.  (By the way, a few BMW’s is hardly impressive.  Anyone in the U.S. with average pay can drive one). 

In light of Cuba’s precarious situation with the U.S., it would have been completely irresponsible for them to NOT have money put aside.