Economy Stores the Valuable Lessons

It’s always interesting to open an old magazine. Like a time machine, it brings you back to past events and awakens a variety of moods. And we do not have to go too far back to see how fast we forget. It is enough to go back 10 years from now and open issue 3 of Economy Magazine from 2009. Inside, Prof. Dr. Plamen Chipev examines the reasons for the global financial crisis and its consequences. Yes, it has been quite a while since that time, but paper “remembers.”

When the domino of devalued financial assets, triggered by the exploding “second-class” mortgages, started “falling” into all sides and directions simultaneously, it turned out that the path leading to Bulgaria is small enough. It is here that the image of our banking system as an island of security was formed, defined by a well-known representative of the business sector with the words “we are aliens.” This alienness, seen as untouchability, stops us from making more or less adequate predictions and expectations for its development. One such peculiarity – the inadequate risk assessment of the financial instruments played an important, if not a leading role for the economic disaster, the consequences of which are now redefining the world financial system. It is good to go back to crucial past moments, which make us more cautious and more careful when laying on the grass on our way forward. Perhaps it does. 

It is instructive what Plamen Chipev wrote about the crisis. Here’s another extract of it:Quants is the innocent term, which is used in the West for the cohort of resourceful financial engineers, called to invent new ways for pushing financial profits even further. In 1997, David H. Lee also became part of them. Armed with the magical method of Lee, the quants of Wall Street created a new world of financial instruments. Thousands of “brand new” securities with a 3-A credit rating, which were immediately devoured by the eagerly awaiting investment market. The formula of Lee allows for the valuation of the risk basket and it is viewed as unnecessary for the eggs to be distributed in different baskets... Let’s not forget the good old rule that we should not put all the eggs in one basket. And let’s move forward, remembering the lessons of the past. It is worth keeping the old magazines because they store the valuable lessons of their time.

Economy Magazine meets you with Vasil Kanev – a worthy man and business leader, who has done a lot for the economic boom of his native town.   

Vasil Kanev, former Chairman of the Board of Directors of Ideal Standard – Vidima AD:

The presence of American Standard changed Sevlievo

Bulgaria will get its new look if a favourable environment for investment is created again

Mr. Kanev, you are the winner of the Mister Economy 2000 Grand Prize, and later, twice, you have been nominated for this highest award – in 2003 and 2012. What kind of recognition is this for you?

That’s what the jury decided. If I have a merit, then it is my job. Maybe it was a happy coincidence, but after I became Mister Economy, in 2001, American Standard sent me first to Bonn and then to Brussels.

What trace did you leave in Ideal Standard – Vidima AD?

I think an important one. Unfortunately, after my retirement in 2012, other colleagues of mine at key positions in the enterprise followed my fate one by one. Younger people came to replace us, but I’m convinced that youth needs the experience of managers like us. In such large enterprises, the balance must not be disrupted, because this business is not an easy one and a lot of knowledge is needed, which is accumulated over time.

What are you doing now after you left this company, which is a key one in your career?

I keep working. A manager with my experience cannot be idle. I have worked with Italian and Scandinavian companies that produce bathroom accessories. But unfortunately, we did not achieve those great successes that we had with American Standard.

Are you still working with Ideal Standard – Vidima?

No. I help other companies, but I remain emotionally attached to it.

What is Ideal Standard – Vidima for this region?

In 1992, a cooperation between American Standard and Vidima started, which lasted until 2007. It showed how we should work. And now the company is of a structural significance that is important for the region. Without it, we cannot survive. It provides jobs to nearly 4,000 people. The enterprise strives to increase its productivity.

Productivity is an important topic. Why in other EU countries there is a much higher productivity – because of the better trained people, because of the better management and organization of work, because of the better equipment and technology?

The factors are complex. Often, Bulgarian companies buy second-hand equipment that is already obsolete. American Standard constantly trained its employees. Now, I do not see this being done. The skills of the management and the organization of work are always important.

What are the key factors for higher financial performance?

I think the Prime Minister Simeon Saxe-Coburg Gotha was right when saying we should replace the chip. And change our attitude towards both work and the state. But I do not think the Germans are better than us. They simply use their working hours better, and thus we get to the organization of work. There, the pay, the discipline and the perspective are different.

Should we import managers?

There are a lot of foreign managers working in Bulgaria. We just need to improve the organization of work everywhere and make people more motivated.

If it were up to you, what would you do for cities like Sevlievo? What do they need to give a reason to people to stay there?

I would invest in these cities. Companies like American Standards are needed. Apart from that, we are capable people. Bulgarians are clever, cunning, but they can also be devilish. We need a lot of investments, and if we manage them in a smart way, we will be able to change the outlook of the country. Money, however, is hard to come by; obviously the environment is not suitable for investment. I see, however, that the number of millionaires is growing. Here, we organize charity evenings every month and we manage to raise BGN 12-16 thousand for different causes. The former Mayor, Yonko Yovkov, for example, initiated a support event for an institution for students.

You admit that you had the best interaction with him, and together, you did a lot for Sevlievo. How are such personalities like him created?

They are not created, they are born. This is also true for good business leaders.

What was your lucky chance?

That I was able to attract American Standard in Sevlievo. The local administration was the most flexible and the fastest. They had the opportunity to go to Gabrovo or Veliko Tarnovo. I was their translator.

Are you happy with your career?

Of course. I am more than happy. I didn’t have such expectations. Luck was on my side, but also on the side of Sevlievo. Determination was needed, and we had it.

Do you write your memoirs?

I entrusted this to a local journalist who is preparing a book on the development of Sevlievo, which also includes my personal story. I have been thinking recently that we should create an interactive museum of industry here to show the growth of the city and its turning into a serious industrial centre.

This year, our magazine turns 30...

Congratulations on this anniversary! This is a serious success.

Is it important to have good economic media in Bulgaria?

Of course. Economic journalists are chroniclers of our economic development and are the conscience of the time we live in.

What is your wish to Economy Magazine?

To find the right formula in the digital transformation, to be close to the business and the people who are interested in their personal and professional development, economic processes and trends. I wish to you to be present in every company and every business team. And let’s all of us have long and healthy lives!