CMEA and COCOM Abolished: Restructuring Precision Engineering Industry in Hungary

The Hungarian precision engineering industry, although fairly successful in the pre-war period and able to survive all the adverse corollaries of planning and CMEA orientation, might be wiped out by the long-awaited marketisation: far more competitive and powerful foreign competitors can now enter both its former single most important market, i.e. the former Soviet Union, and the domestic market. Thus accumulated knowledge of R&D and production engineers as well as the experience of the highly skilled blue-collar workers, albeit of primary importance in this industry, might become completely worthless and disappear. Combined with fresh capital, access to new markets, recent technologies and up-to-date management methods, however, it can (and should) be regarded as a major asset and the indispensable basis for successful restructuring. This paper suggests that sweeping changes in size, ownership, internal organisation, and product range are also inevitable so as to be able to adjust to the new environment.