To get a factory, which is a write off, back on its feet in one year, is quite an achievement. Robert Masarovič proved it possible with Pražská strojírenská. Maybe because he's not exactly your usual director type. When I entered his office, I was under the impression a production man was waiting for him there...
You are probably the first director to welcome me in overalls, as if you were going to assemble the switches...
That’s my everyday thing. When you look at the hanger, you can see all kinds of work clothes there. For example, the yellow jacket is for the underground, the shoes are special for operation premises, as there can fall buckles that would just cut through your normal shoes. When you realize that we are basically doing black smithing, it is clear that it is not a clean environment. I'm basically all the time in operation. Right now, we are laying the foundations for the largest investment in the last few years, a twenty-six million two-station cutter. So as soon as we are done talking, I’ll go down again. I like being in production and I don’t enjoy being in the office much.
You came here at the turn of 2016 and 2017, the company was at a loss, basically before crash. What were the beginnings like?
I pulled out all the accounts, endless tables; started with contingencies, wading through everything. You basically have to break the company down. You have to break it into atoms, study each and every one and then put it back together. You need to find out where your income is, where your expenses are, where your money is flowing, you need to stop cash lines. That is absolutely the first thing. My predecessor claimed there was a plus result of about 1.6 million at the board meeting. But out of that, 1.5 million was from car sales. In an engineering factory! As I went through all those accounts, incredible things came up. There was absolutely no control over accounting, over contracts, there was no internal register of contracts. What is more, they had an external economist. The company did not have an account in any foreign currency. So when a Euro payment came, it was exchanged to the Crown in the worst possible way. As a result, annual exchange rate losses were in millions. The company didn't even have a production plan and depreciated production three or four months after it ended! So I went through everything and spent some serious time in the office. After all, they say about me that I am quite a maniac (he laughs).
So it needed maniac-like work to be put in?
It did. Projects of this type are very wild and dynamic at the beginning, what you don't manage to do in the first three to six months, you won't manage later. You need to find out what the legal nature of the contracts is, where they are signed, who signed them, if they have been delivered on, whether there has been any delivering at all ... The second step is to get new fast and cheaper suppliers for everything possible. In April 2017, the company basically didn’t make money for any salaries. That was the end. So we agreed with the Transport Company they send us an advanced payment for some jobs so that we could pay salaries, and my colleagues and I took care of everything. Finally, in 2017, we refinanced the entire company and after all the accounting changes, we made around 18 million in 2017. The years 2018 and 2019 already brought a total profit of over 100 million.
What was the key?
That we got back on the market. My principle in running any factory is to play fair. As a former top athlete - eleven years of water polo make you a different man, not only for the eight times broken nose, three ribs, a torn kidney or a dislocated shoulder - I honor playing fair. So, together with the sales director, we went to all the key customers and openly ate our humble pies. We admitted issues the factory could not handle. Some were surprised, some scared, but the common denominator was - “we appreciate you coming clean”. And that along with saying how we can fix it, how it will work from now on did wonders, them saying “So we'll give you a chance”. The whole year of 2017 was incredibly demanding. The result was good in the end, but it was huge effort. And at the end of it, when we actually got a good result for the first time, a few days before Christmas, we sent each of the employees a share of the annual profit, which was about 15 thousand for each. And thus we created a certain story of working with our employees, which is valid to this day. At the same time, we do not even have it in the collective agreement. In 2019, the share was already 28 thousands - from the profit of 51 million. I'm not a supporter of Ford-type capitalism, that is, skinning people to the bone. I see work more as a mission, although it is too euphemistic, but let's say a kind of mutually beneficial agreement. But I emphasize ‘mutual’.
Was it easy to explain all the changes to the people?
I worked in consulting for eight years. So I was trained for it. I understand these things, I understand restructuring, I can implement it. And maybe I'm lucky to able to explain to people what their contribution to the whole mission is. Yes, it is true that it is often beyond human power to explain some things to older workers - and I do not mean only older people, but especially to those with a right of succession or right of loyalty - telling them that things can be done differently and that the result will be better then. But it works, such effort doesn’t go in vain. For the first few months they hate you, then they just dislike you, then someone starts to listen to you and finally some even start to like you. Which is dangerous (he laughs).
Is most of your work you do for the Prague Transport Company?
It used to be. Now it's between 40 and 60 per cent, depending on whether DP (Dopravní Podnik=Transport Company) does or doesn't do more. Last year it was about 55 percent. In October, we started manufacturing the Strašnice depot, which is being installed into the ground around now. As you can imagine, it’s very complicated work. We will do Charles Square and other things. I need to say this - from my personal experience, the Prague Transport Company is one of the best transport companies I've ever seen. And I've seen quite a few of them around the world.
In what sense it is the best?
Their property management is great, the comfort of transport provided, the frequency of services, workshops and maintenance. It is almost the same standard as Vienna and Zurich, which are the absolute world leaders. And when our colleagues from Melbourne came to visit, for whom we make orders and it is the largest tram transport company in the world, they were impressed by the DP control room, to name one of the things they liked.
How difficult is it to prove yourself abroad? Are these specific environments?
Everything has some specifics. And everything has some hindrances. Some can be bypassed, others climbed over, some other ones climbed under. And some are too high and then we can't conquer them. Even before I took over, the factory made various attempts to work in different markets, but its economic results basically demonstrated how well it was doing. In 2018, we flew to Melbourne to introduce them to a new innovated factory and entered into a partnership with Melbourne's rail operator Yarra Trams for five years. And this year we have even large orders from Australia. In Germany, for example, we built the entire depot in Hanover, and for the first time in history, we have now got interesting projects in Berlin. Then we have something agreed in Ghent, Belgium, we have reached an agreement with the Poles, even though the competition there is as much as three times cheaper than us. Our partner for Slovakia won a large 3 year contract in Bratislava with a total value of 48 million for us. And we did Bratislava last year as well - a completely new line to Karlova Ves. And the project, which I am quite proud of, is with the Belarusian company Transkomplekt, with which we have entered into a partnership - it buys from us and then sells on the CIS market. Several other very interesting projects have also been successful, such as the completion of a completely new depot in St. Petersburg, or now a relatively large structure was leaving for the university city of Perm. And last year we made orders for Samara - so the world hockey championship was already run on our switches. We are doing something for Kušva; we are in a tender for switch systems in Moscow and so on.
If the company was doing so well that it would no longer be necessary to come up with and negotiate anything fundamental, would you still enjoy it? You seem to be a very action-minded person.
I don’t know, action ...I don’t want to seem hyperactive. I am a conservative person by nature. Although I make a living from change, I don’t believe in change for the sake of change. When I was training at an American company, they taught me a pretty interesting rule, “if it’s working, don’t fuck it”. That’s pretty clever. And it’s good to know the moment when it’s working. I guess I’d still be looking for more changes for the better or more efficient operation. And if I knew I couldn’t do that, I’d probably be bored. Then it would be better to ride a motorcycle, spend the money saved and keep bees. But I’m not afraid of that, there will always be enough work, believe me.
You did polo, which is a hard sport; you shoot; you ride a motorcycle. And at the same time you keep bees. Isn't a bit contradictory?
I admit that bees are a very calm hobby compared to the others, the slower you are, the less stress you and the bees have. But it certainly doesn’t contradict each other, on the contrary, it balances itself nicely. I need a lot of physically challenging sports, I need drive myself to get tired so that my muscles get used to it. As for shooting, that’s been my hobby for ages. Once in a while I go to the shooting range, I do some aiming and shooting, impulsive and defensive; I clean the weapon. And I know that I am able to defend myself and people around me. And as for the bees ... I wanted to keep them already a long time ago. But it there was always something that had a priority. But in the end, I went for it and I do not regret it. It’s peaceful, quiet, calm. And if you want to relax, sitting among the hives, watching the hum helps realise that the world is about something else than the daily hustle and bustle. I like bees, it’s a kind of a philosophy for me - relaxing. When I get there, it’s just me and the bees - you rearrange something, treat them, help, check. My colonies are healthy, and I am perhaps the only one around me whose all colonies have survived. Which is also because I don’t mount them much, I give them living space. If you do something that doesn’t go with their building style, they will fix it and redo it in two days anyway.
If you're all the time at work, when do you play sports?
We have a chilling lounge here.
So, as the name implies, it's more to chill, isn't it?
I have a punching bag there- that is chilling for me.
And is it also available to employees?
Of course. They get tired or maybe frustrated. We also have football, darts. And when we need to solve something, we take the papers and throw ourselves in loungers and think. By the way, when you meet an entrepreneur and ask her when was the last time she did some deep thinking about something, the hard drive in their head usually stops with not being able to answer (he laughs). Everyone is trained to do deciding only. Okay, but when does she think about it? So me and my colleagues chill over there, brainstorm, write stuff on pieces of paper - I have them on the post board over there. Later on we come back to them, sometimes in a week, sometimes in a year. It is a Delphic method, used by the ancient Greeks. When you write an idea anonymously, you remove personal animosities. So there are papers with ideas on the post board and we can see what we have already done. People came up with something or wanted something, and hey, suddenly we have it.
You are obviously satisfied with what has been built.
Of course, we have something to be proud of. This is an exemplary good project. We have repaired the factory, restructured it, pulled it out of the bottom; the results and profits are visible; and we continue to improve it. Everyone has to feel that they have a part to play. Compared to before the change, workers today earn 35% more. You do well, you get paid well, this principle will come back to you a hundred times. And let me tell you one more golden rule of restructuring that I have got from an exceptionally smart guy whom I respect and who has inspired me for many years - never expect to be able to straight away solve a problem that has been an issue for years. You break your teeth, and you make a fool of yourself, and it still won't work. So I always start with simpler things and gradually move on to more complex ones. And then one more thing - I say that the country, the family, the company and the universe work on three pillars: authority, responsibility and motivation. When someone is responsible for something, they must have the power to manage it and they must be adequately paid for it. Everyone knows exactly what they are responsible for, everyone knows exactly what their powers are, and everyone knows exactly how much money they make if they do well. When you bring this into a company, you can fix almost anything. Because then it will be much easier to put together everything else together that is needed for the company to thrive, improve and be your baby (he laughs).
Robert Masarovič (born on 30th August, 1973 in Nové Zámky, Slovakia) is the general director of Pražské strojírny and a representative of Havířov and the Moravian-Silesian Region for the ANO movement.
He studied Economics and Management at Nottingham Trent University, as well as Profitability and Economic Management at the American Michael Cloud Institute. He also lectured at the University of Corporate Management and Restructuring, and at the Institute of Lifelong Learning he had a Programme for Insolvency Administrators.
He started his career in the 1990s, when he won a tender for the first multiplex cinema operator in Central and Eastern Europe, opening cinemas in the Czech Republic, Slovakia, Hungary and Poland. Then he worked in a consulting company, did a restructuring project in Zenit Čáslav and then restructured Kostlecké uzeniny.
He is divorced, lives in a long-term relationship and has two children.
Culture crossbred
Among other things, Robert Masarovič revealed that he has Hungarian-Slovak-Moravian blood circulating in his veins. "And I think we also have Croats somewhere in there from the First World War, I'm just such a Central European crossbred," he comments with a laugh. More seriously, however, he turns to the issue of multiculturalism. "I'm its big opponent, it's a fanatical idea of leftists," he admits. "But I'm a big fan of multi-ethnic coexistence," he adds immediately. "I don't mind at all if a Japanese, a Vietnamese, an Indian, whoever lives next to me, that's nice about the world. And when we live side by side, we have a common culture. But as soon as we start pushing for strength and start transforming culture into a society into multiculture, we have nothing, on the contrary, we lose everything. Multiethnicism and multiculturalism are very often confused. Multiethnicism is fine to some extent. I don'mind foreign cultures. But I do mind invasiveness, I mind enforcing minority rights at the expense of majorities. Because, in fact, the much celebrated democracy is the rule of the majority. Any attacks on this system are an attack on the pillars of democracy. "
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