October 21, 2016

Ukrainian American businessman optimistic about the future of Ukraine

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Mark Raczkiewycz

Petro Rondiak stands outside the Winner Group of Companies’ 9,000-square meter, $22 million distribution and office building in a Kyiv suburb.

KAPITANIVKA, Ukraine – As the son of a Green Beret serviceman, Petro Rondiak grew up moving around a lot. He spent two years in Stuttgart, Germany, and has resided in Boston, Washington and Philadelphia.

In 1995, the 50-year-old father of three children finally cemented his feet in his ancestral homeland of Ukraine to help a sprawling Ford car dealership network founded by John Hynansky – a Ukrainian American who was already an established successful car dealer in America in several eastern states.

Mr. Rondiak had no automotive experience, but had technical training as an engineer with Raytheon, a major U.S. defense contractor, and knowledge of the Ukrainian language. Those qualities were enough for his former roommate and fellow Plast Ukrainian Scouting Organization member in Philadelphia, Bohdan Kulchycky, to recruit him in 1995 at Winner Automotive in Kyiv at the behest of Mr. Hynansky, who started the company three years ealier.

That year, as Ukraine was discovering freedom and capitalism, Winner sold less than 1,000 vehicles. By the time that Mr. Rondiak had arrived to work as the deputy director of Winner, Mr. Kulchycky was no longer using a Soviet-era hotel room for an office.

“They dealt with all kinds of challenges, including the mafia…” Mr. Rondiak, now the management board head of the Winner Group of Companies, told The Ukrainian Weekly at the company’s $22 million distribution center and headquarters in a Kyiv suburb, the village of Kapitanivka.

Racketeers would approach the group, saying, “you need to hire us for protection,” Mr. Rondiak recalled.

Staying clean and honest came at a price.

It took more than four years to get all the building permits to construct one of the nation’s first multi-brand dealerships that would include Volvo, Jaguar and Land Rover, in addition to Ford, in 2003. It was a $15 million investment.

He credits Mr. Hynansky’s credo of caring and investing in employees and for taking decisions with “having a long-term presence” in mind for Winner’s success.

“Our basic, fundamental reason why we come to work every day is that we try to be an example of transparent and open business in Ukraine,” Mr. Rondiak said. “We want to align ourselves with best-in-class products and services, and honest and transparent business in Ukraine as a socially responsible company.”

Car sales, according to Mr. Rondiak, usually have a five-to-one correlation with how the economy grows. The industry peaked in 2008 at the dawn of the global financial crisis with over 660,000 units being sold; last year just 51,000 new cars were registered. So if the nation’s gross domestic product grows by 1 percent, the industry sees a 5 percent rise in vehicles leaving showrooms.

Despite the turbulence that the industry has faced with multiple political and economic crises, Winner has maintained its status as an exclusive importer of Ford motor vehicles by meeting market share benchmarks.

For example, in 2015 Ford was the third best-selling brand behind Renault and Toyota.

“The Ford name has been entrenched. The Ford brand has evolved so much, however. It’s known for reliability, it’s known for safety, it’s also known for technology, it’s innovation. Ford has said it will have 17 electric models by 2020. It’s definitely going toward electrification,” Mr. Rondiak said.

Still, his competitors marvel at the company’s track record as a privately owned company with no local partnerships.

“We focus on our work, we don’t conduct under-the-counter operations,” he said. “A big principle of ours is never to take on a local partner. We work with intensity, in keeping with our values, and never get distracted or sidetracked by seeking political-sponsored cover – ‘krysha’.”

Perhaps the nation’s best architectural example of handling risk and being successful is Winner’s headquarters in Kapitanivka, located on the highway towards Zhytomyr heading east from the Ukrainian capital. Completed in 2009, it is the brain center of the group that manages more than 550 employees, oversees a training center for new hires, including mechanics and sales consultants, and 49 dealership partners that are franchised.

Mr. Rondiak likes to boast that there are no computer servers in the advanced information technology department because everything “is in the cloud.”

Staying consistent with Mr. Hynansky’s credo, the bespectacled Mr. Rondiak said: “The distribution center is custom-tailored to how we do business.”

He enjoys telling the story about how in 1991 Mr. Hynansky, a close friend of Vice-President Joseph Biden, was approached by Ford executives at the Wimbledon tennis tournament to start operations in Kyiv.

“The executives said, ‘You have a Ukrainian background? Ukraine is now independent, why don’t you start Ford there for us in Kyiv?’ ” Mr. Rondiak related. “He replied: ‘Kyiv isn’t interesting for me, but all of Ukraine is.’ They said, ‘Okay John, take all of Ukraine.’ ”

But if the days of dealing with racketeers and meddlesome bureaucrats are gone, the biggest challenge that Mr. Rondiak faces is the economy where the average monthly salary is around $200.

“The purchasing power of the average Ukrainian has really plummeted. We need an economy, buying power, people need to feel confident and spend money. Obviously, the road system and infrastructure could use improvement,” he explained.

Yet he remains optimistic about Ukraine’s future: “In the end, it’s easy when you look at Ukraine from the outside to be down on it. ‘Oh, it’s corrupt, it’s becoming a banana republic, the Maidan happened but corruption is still here and nobody has gone to jail.’ It’s easy to be negative about it, but living and working here is actually encouraging and inspiring. There is a great deal of opportunity and work to be done within our spheres of influence.”

And most of the industries are still wide open to market entries if people can handle risk and take the long view.

“The whole field is wide open in terms of providing quality,” Mr. Rondiak said. “Whether it’s a service or product. I would really recommend doing something you like doing and not doing something you think is smart to do. If you pick a field that you love and have a passion about, you will succeed here with hard work. I guess that could apply anywhere.”

Winner is still breaking ground.

Last year, it was loaned $20 million by the American government’s Overseas Private Investment Corporation to build a new Porsche dealership on the highway that connects Kyiv 35 kilometers to Boryspil International Airport. In November, Winner will break ground to build a Jaguar and Land Rover dealership next door to the facility.

“There are going to be a lot of obstacles and challenges, and it won’t be an easy road, but if you’re passionate about what you’re doing you can get it done here and enjoy growth and return rates that are hard to come by in more developed economies,” Mr. Rondiak said.

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