Winner Ford chief speaks on doing business in Ukraine
by Alexandra Isaievych Mason
Special to The Ukrainian Weekly
EAST HANOVER, N.J. - On November 11 here at the Ramada Inn and Conference Center, the Ukrainian American Professionals and Businesspersons Association of New York and New Jersey (UAPBA) hosted a talk by John Hynansky, founder, president and CEO of the Winner Automotive Group, the first American car distributorship in Ukraine. Mr. Hynansky spoke about doing business in Ukraine, with all of its pitfalls and rewards.
Mr. Hynansky is a highly successful entrepreneur who has traveled the classical immigrant journey, having arrived in the United States in 1949 from a displaced persons camp in Germany. After a successful career in the automotive field, Mr. Hynansky founded the Winner Automotive Group, which today comprises a U.S.-based group that includes 20 new car dealerships and affiliated companies, that employ more than 600 people, and is one of the top 100 car dealerships in the United States, and several affiliated businesses in Ukraine.
His business venture in Ukraine started in early 1992 with many exploratory meetings. Believing that "connections" and partnerships are too unstable a basis upon which to build a solid business, Mr. Hynansky relied on two basic principles that he adopted during his first years of working in Ukraine. These included not to bribe anybody, and not to exploit anyone economically. Instead, the company focused on building teams of people who would grow with the business they were developing.
From small beginnings, the venture in Ukraine grew to include 361 employees at its peak, exclusive distribution of Ford vehicles throughout Ukraine, two fully owned dealerships, numerous service centers throughout Ukraine, gasoline distributorships, a construction company and a Volvo distributorship.
According to Mr. Hynansky, while doing business in Ukraine can be very challenging, it can also be a very, very interesting experience, in large part because the business environment is so chaotic. The main ingredient in Winner's success in Ukraine is its reputation for integrity. This reputation is based upon the Winner Group's decision that it was important to operate completely above the board, to pay all of its taxes and not to rely on connections that might be bought with bribes.
A real test for Mr. Hynansky's business acumen was the financial meltdown during the ruble crisis in August 1998 when currency exchanges stopped operating for two full weeks and the hryvnia lost 56 percent of its value in one month. Sales fell 65 percent and the Winner Group was forced to lay off 55 employees, send others on forced vacations, cut back expenses immediately and postpone a scheduled expansion. Weathering this crisis and continuing to grow afterwards have shown the soundness of the foundation upon which the Winner Group has built its presence in Ukraine.
The initial motivation for Mr. Hynansky to expand his business into Ukraine was his love for the country and its people, which he developed during his many visits there, along with an entrepreneur's desire to create something of lasting value.
Mr. Hynansky defines success as "being happy doing what you are doing." The Winner Group's venture in Ukraine, according to Mr. Hynansky, is a resounding success by his personal standards. Many other foreigners who have come to Ukraine to do business there have not found such success. Among the many reasons for failure of foreign businesses in Ukraine, Mr. Hynansky emphasized several. These include the lack of overall business experience, reliance on connections with questionable partners, absentee ownership, unrealistic investment goals, emphasis on short-term returns, disrespect for Ukrainians and disrespect for Ukrainian laws.
In Mr. Hynansky's view, Ukraine does offer a promising future for business development as its economy is starting to grow. The financial crisis of 1998 has actually strengthened local manufacturers. The country now has a pro-active prime minister, and foreign investment is increasing. The economic progress of Ukraine's Western neighbors serves as a good example of economic progress.
Mr. Hynansky underlined that Ukraine has to be given credit for how far it has come in the past 10 years in relation to where it began. Much more rapid progress can be made by Ukraine if corruption and bureaucracy were greatly reduced. Mr. Hynansky referred to other problems, which include frequently changing laws (some retroactively), unreformed banking laws, uncertain civil and contract law, generally low incomes and thus low levels of demand, and an inflation rate of above 20 percent.
He concluded his presentation by emphasizing that opportunities for business people still exist in Ukraine, however, it is important not to operate only for patriotic reasons, but to build a sound profitable business. He further advised that one should expect that everything in Ukraine will take twice as long and will cost twice as much as first anticipated, and that one should be very careful of partners and maintain vigilance.
At the end of Mr. Hynansky's talk, the audience asked him numerous questions on topics ranging from details about the car distribution business in Ukraine to how Mr. Hynansky interacts with Ukrainian politicians.
At the conclusion of the evening, UAPBA President Leonard Mazur presented Mr. Hynansky with a plaque of appreciation. It was noted that through hard work and dedication to sound principles, Winner Automotive Group has become an outstanding example to others in Ukraine, and Mr. Hynansky deserves recognition for his outstanding entrepreneurial achievement.
Copyright © The Ukrainian Weekly, December 10, 2000, No. 50, Vol. LXVIII
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