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LC-A Big Book Chapter 21: We Want More Lomo LC-A's! Tough Negotiations in St. Petersburg

In October 1995, when the Lomographers then asked for 3,000 cameras per month, an unexpected answer came from the Russians: “As we are delivering the cameras these will cost 50% more per camera“. What! How on earth was this possible? What looked so simple from the free-market perspective of the Austrians (at last the cameras were selling like hotcakes), was unfortunately much more complicated in St Petersburg.

ILYA IOSIFOVICH KLEBANOV: THE DEPUTY PRIME MINISTER OF THE RUSSIAN FEDERATION (THANKS TO THE LOMO LC-A)
Ilya Klebanov started working for LOMO PLC in 1977 as a construction engineer and became Director General of the optical works in 1992. It was he who led the huge St Petersburg company through the tough times of its privatisation and who largely helped to promote and improve the company’s products, especially in the fields of endoscopes and night vision gadgets. After Klebanov refused to meet the not-so-business-like Lomographers the first time they came to visit LOMO PLC, the partners-to-be eventually met in 1995. Perhaps the change of heart had something to do with the 5 litres of whisky the Austrians had brought as a gift! Even though harsh negotiations were always involved in their meetings, the Lomographers and the hard-boiled but hearty General Director became respectful friends. This is in no small way linked to the fact that Klebanov took part at the legendary Putin meeting, which is said to be the first real meeting between the former General Director and the later President of the Russian Federation. Years later, Klebanov became Deputy Prime Minister of Russia thanks to the good relations between him and Putin that the LOMO LC-A instigated.

Soon after the visit to Russia the Lomographische GmbH (limited liability company) in Vienna was officially registered and the first “Lomographic Embassy” was opened in Berlin. What are Lomographic Embassies? They consist of Lomographic Ambassadors (LAMB) and are global networked sites which represent Lomography in the most important places in the world. The idea was born in Vienna where long letters regularly streamed into the Lomographic headquarters from motivated Lomographers all over the world announcing: “We want to promote Lomography campaigns and exhibitions in our city as well and bring the grandiose LOMO LC-A to every man and woman! What can we do?” One day while in a sauna the Lomographers came up with the idea of having a LomoEmbassy system. “Just like with any nation or art movement of importance, we Lomographers will establish a worldwide Embassy system. These LomoEmbassies and their corresponding Ambassadors will represent Lomography in their countries and do their best to let our little photo movement grow quickly and steadily!” the Lomographers agreed upon enthusiastically.

A short time later the first LomoAmbassadors from Berlin, Stefan and Elisabeth were officially inaugurated. In 1995, they had a fantastic opening ceremony in East Berlin at the “Hafenbar“. This was because on the day of the opening exhibition, Ambassador Elisabeth had appeared on the morning show at Radio Fritz to talk about Lomography and had let her contagious laugh loose on the masses. The outcome: half of Berlin woke up, and in no way wanted to miss out on the glittering party in the Hafenbar; they positively snatched the cameras out of the Lomographer’s hands. More LOMO LC-A’s were essential! This request was immediately faxed to St Petersburg and LOMO PLC delivered 1,000 cameras every month from July to September. But even this amount of cameras wasn’t enough for the young company, who in the meantime opened LomoEmbassies in Bregenz, Innsbruck and Munich. By the beginning of each month the Russian jewels were sold out! In October 1995, when the Lomographers then asked for 3,000 cameras per month, an unexpected answer came from the Russians: “As we are delivering the cameras these will cost 50% more per camera“.

What! How on earth was this possible? What looked so simple from the free-market perspective of the Austrians (at last the cameras were selling like hotcakes), was unfortunately much more complicated in St Petersburg. Occupied by its own survival in the modern capitalist market, LOMO PLC had ceased camera production and wanted to concentrate solely on the production of optical devices for medicinal and military purposes. Recently LOMO PLC had emptied its photo stock and given away surplus Smena-Cameras to school pupils. It’s important to note that the LOMO LC-A’s, formerly delivered to the Lomographic Society, were all assembled from spare parts. Production of these parts was largely discontinued before the emergence of the Lomographers. This was due to the new free-market conditions which made production completely unprofitable. Resumption of the entire LOMO LC-A production would therefore present very high costs and capital expenditure, which explained the enormous and sudden rise in prices on the part of LOMO PLC.

The Lomographers however did not have this background information, and outraged by the shocking and unfounded increase in prices they got on a plane to St Petersburg. Tough negotiations ensued. The Viennese had been coached by a management consultant, which found little favour with the Russians. For days on end neither party would give in. For the Viennese the stakes were high, as they now owned a company and certain duties were interconnected (above all, the obligation to pay back their bank loan). The General Director of LOMO PLC in turn felt that with the proposed 50% increase they were doing the Lomographers a favour. The last piece of stock was finally gone, many production machines were old and broken and most of the workers were ready to be discharged. Further production of the LOMO LC-A under the conditions at that time meant enormous financial investment. In the end, they decided on a price after further calculations were made by those from St Petersburg, who did not enjoy trying to agree on a price. This price was 100% more than the previous price. However, in the months that followed this price was continually increased in relation to production in St Petersburg which became more difficult day by day and thus negotiations came to a temporary standstill.

“Njet, Njet and again Njet” was heard by the senior management at the enormous factory concerning continuing production of the small camera. The Lomographers had four months to think of everything they could do to get through to Director General Klebanov. By the end of 1995 the factory in St Petersburg resumed delivery of the LOMO LC-A. Afterwards the Lomographers had to present a plan demonstrating how production could be further financed in the future.

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written by ungrumpy

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This is the original article written in: English. It is also available in: Italiano, Spanish, Deutsch & Português.