Two ex-IBMers from the Triangle say they are pushing ahead with plans to build a farm tractor to sell in Cuba, even though the Cuban government has turned down their bid to assemble the tractors in an international business park there.
Saul Berenthal of Raleigh and his partner Horace Clemmons in Alabama say they will work to overcome the concerns raised by the Cuban government and possibly seek a partner inside the country to help import the tractors and perhaps eventually manufacture them there.
“We’re not giving up. This is something we want to make happen,” Berenthal said. “All we want to know is what are the terms and conditions here and in Cuba to make it happen.”
In the meantime, their company, Cleber LLC, has begun making tractors in Alabama to be tested by universities in the U.S. and by interested parties in other countries, including Mexico, Angola and Peru. Since their plans to build a simple, inexpensive tractor for small farmers in Cuba began drawing attention a year ago, they’ve heard from interested parties in other countries with similar small-farm economies.
“There’s nothing in this that really frustrates me, because of what we’ve learned,” Clemmons told MSNBC last week. “The Cubans taught us an awful lot about a business model that’s needed. And what we’ve found out is the things they’ve taught us and the things we’ve proposed to them have global applicability.”
Cleber’s plan is to take an updated Allis-Chalmers Model G tractor that was introduced in the U.S. in 1948 and rebrand it as the Oggun for use by farmers who rely on old Soviet machines or livestock. Parts for the small, rear-engine tractor would be made by a contractor in Alabama, then shipped to Cuba, where they’d be assembled in the Mariel Special Economic Development Zone, a tax-free industrial area for foreign companies adjacent to a massive new port west of Havana.
The Cubans were initially encouraging, and last winter the U.S. Department of the Treasury, which enforces the country’s trade embargo against Cuba, issued Cleber the license it needed to pursue the venture.
But late last month, the government office that runs the Mariel zone told Berenthal that Cleber’s application had been denied. The reasons: The tractor does not meet Cuban safety and environmental standards and the company’s technology doesn’t match the government’s desires to lure high-tech companies to the Mariel.
Berenthal, a Cuban native who fled the country as a teenager after the 1959 revolution, received the news during a meeting in Havana, and said the Cubans were professional and gracious.
“We take them at their word,” he said.
But John S. Kavulich, president of the U.S.-Cuba Trade and Economic Council in New York, said the Cubans have known about the tractor and the technology needed to make it from the beginning. Kavulich says there could be several other reasons the project was ultimately turned down, such as lobbying from other tractor manufacturers in the U.S. and abroad.
One possibility, he says, is that allowing a U.S. company to set up a manufacturing plant after a 50-year trade embargo would look like defeat.
“Cleber LLC would be perceived that the Republic of Cuba is accepting of current United States statues, regulations and policies,” Kavulich wrote on his blog earlier this month. “That they have surrendered.”
Berenthal says Cleber will reach out to Cuban regulators to learn what needs to happen for the tractor to meet safety and environmental standards. But Berenthal and Clemmons acknowledge that doing business in Cuba will be difficult without a lifting of U.S. restrictions that affect shipping and finance.
“It’s been a complex process,” Clemmons told MSNBC. “And I don’t believe we’ll get anywhere until the embargo’s lifted.”
Whether that happens under a Donald Trump administration with a Republican-controlled Congress isn’t clear. Berenthal notes that Trump’s position on Cuba has changed over time and says he doesn’t think it will be a big priority for the new administration anyway. Meanwhile, the government bureaucrats in Cuba and the U.S. continue to talk about how to improve relations, and that will continue.
“Time is on our side,” Berenthal said.
Next week, Cleber will hold a celebration at its plant in Alabama, where about 30 Ogguns have been manufactured so far. The assembly line the company planned to set up in Cuba is now operating in the little town of Fyffe, Alabama, and Cleber’s website says it will soon begin selling the tractor’s online to customers in the U.S. and Canada. It does not say what the tractors will cost.