DAIREN MACHINE FACTORY NO 17: CONSUMERS OF ITS PRODUCTION, INPUTS, PLANT FACILITIES WITH ENCLOSED SKETCHES, NUMBER OF EMPLOYEES, AND OTHER DETAILS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00047R000400300010-2
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 36
• Document Creation Date: December 22, 2016
• Document Release Date: July 1, 2009
• Sequence Number: 10
• Publication Date: May 14, 1954
• Content Type: REPORT

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(d) Cast Iron Water Mains During the period 1949-51, mains of 600 and 900 mm
in diameter were ordered by the Soviet Army for use
in a water pipeline near Port Arthur. During the
period 1950-51 water mains of 75, 100 and 300 mn in
diameter were ordered by: the Soviet Army, the Dairen
Water Works, and the Dairen Soda Ash Factory (Sodovii
Zavod). In 1950 pipes of 100 and 150 MM in diameter
were ordered for the oil refining plant (Nefteo<
chistitelni Zavvod), located on the northern shore of
Dairen's Victoria Bay This plant was undergoing
rehabilitation at that time.
(e)
Gas Separating Machines Two or three of these machines which were about
7x7x6t and of different designs were produced for the
Chemical Plant (Chimichiski Zavod) on the northwest
shore of Victoria Bay. This plant also was undergoing
rehabilitation.
(f) Iron Parts for The factory cast and assembled the conveyor for the
Conveyor Chemical Plant in 1950. The conveyor was approxi-
mately one-half kilometer long.
(g) Repair of the Soda This work was done in 1911.8 and 19+9 and included
Ash Plant, Dairen repair of the whole piping system and some machinery
by a team composed of engineers and workers from
No 17. The Soda Ash Plant at that time belonged
DAI NERGO.
(h) Lighters
During 1948-.49 approximately 70 lighters were con-
structed at Dairen Dock by a No 17 team under one of
the factory's engineers. This max. was Mr (fuu)
Potapoff, who subsequently became the chief of No 17's
welding department.
(i) Sea-going Vii ?s During 1949-50 a team of No 17 ,corkers built some
tug hulls at the Dairen Dock yards.
(j) Work on Water, Oil, During the period 19.9-51, a No 17 team repaired
and Steam Pipes on pipe systems on steamers vaidergoin ; repair at the
Steamships Dairen Dock yards. The most important work consisted
of complete change of the piping system of a Soviet
oil tanker of about 10 thousand tons in 1950.
(k) Pontoons These were of two designs. One hundred or one hua3dred:-
twenty sets (two pieces each) of Japanese design and
made of light iron were manufactured. This type was
completed and delivered in 1951. It was done on order
of the Chinese Army which supplied the necessary metal
and wood. About 100 sets of heavier pontoons (three
units per set) of Soviet design wei?e mauufactu ed..
They were capable of otryporting heavy tankv. These
pontoons were still tuider construction in 1951 and
at the time of my departure in March 1952 none of
them were as yet assembled, being only from 60-70%
completed. These were also for the Chinese Ar~`.:y.
(1) Mine Tip-Wagons, Approximately -three thousand were ordered by DALIAMU-
Narrow Gauge TORG through DALENERGO in 1950.
(in) Spare Parts and Tools 't'hese items were produced mostly for Soviet Arm -y units
for Trucks stationed in the former Kwantung Leased Territor
In 19+9 and in early 1950 the Soviet Arwy accepted
everything that was produced. In late 1950 and 1951
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(b) Pig Iron - The usual type of pig iron was received from Komsomolsk. A
special type made by the charcoal process came from the Urals. It was
stamped with the letter "r"". No 17 used it for the electric melting
process for steel and malleable cast iron. In 1951 we began to receive
iron, steel, and pig iron from Anshan, Manchuria. At that time the Anshan
plants were not yet fully repaired, and as a result Anshan was unable to
produce sheets thinner than 6 mm, angles less than 6x75x75 mm. We were able
to obtain very few types of special steel from Anshan and no pig iron made
with charcoal at all. Nickel, chromium, ferrosilicum, ferrophosphorus, ferro-
manganese, aluminum, zinc, copper and other metals all came from the USSR.
However,
this may have been because for most of them we had some stock in 1951.
(a) It was in 1950 that we received the order for 10 thousand army iron bedstands
from the Soviet Army headquarters in the Maritime Province. We were unable to
obtain the proper steel angles and ribbons from the USSR because this order
was not included in the 1950 Plan and as a result the request for the neces-
sary materials had not been sent to Moscow in late 1949. Anshan was not able
to produce 4x25x25 mm angles and we therefore ordered them from the main work-
shop of the former Chinese astern Railway in larbin.
(d) The need for steel and iron of course depended upon the type and size of the
production program or plan. For the years 191.9-51 the following figures may
be taken as typical:
Item t- X
Steel sheets of 2-12 mm thickness 3500-4000 tons
(2) Steel in the forms of L, U, I etc. (This steel 800
was mostly light, either 5x5x10 mm or up to
6x75x75 mm, If there were orders for much frame
construction then the steel angles would have
heavier profiles, some going up to 12x200x200 mm.
In that event the total weight exceeded one thousand
tons.)
Pig Iron
(4)
(5) Iron sheets cof : j--.7 mm
2500-3000 tons
About 300
11 200 fx
(e) Steel Cables, Insula d Wires, Ball and Roller Bearings - All came from the
USSR up to 1951. Then in 1951 the following products were received from
China: steel cables and wires from Mukden; bearings from Wafangtien, Lear
the border of the former Kwantung Leased Territory. The factories which pro-
duced the above articles were Japanese plants which had been restore d to
production. The steel cables and wires passed the test of our laboratory
and we used them on the bridge cranes which we shipped to the USSR. Up to
March 1952 bearings used in important items such as cranes were Soviet bear-
ings of which No 17 had a stock. Chinese bearings were utilized Success-
fully for less important roduction. F_ I
The factory in Wafangtien had more orders than it
could fill. The need for the above materials was determined by the pro-
duction plan. Each five-ton crane needed from 75-90 m. of steel cable with a
diameter of 17 mm and with a fixed number of iron threads. Such a crane
also needed about 100 ball bearings of different sizes and shapes. No 17
produced itself the roller bearings for the mine tip-wagons, which had a
one-ton capacity. For these roller bearings No 17 used cormuon steel or
steel of not high grade. The roller bearings were subjected to a heat
treatment (cementation of the surface), which was sufficient considering 25X1
the light work that the bearings were expected to do. They were all anti-
friction bearings. It may be of interest for me to point out that sometime
in 19 9 No 17 received from the USSR a ltivgti iuL f ball bear-
ings for cranes. The bearings were of ari;-: _,4` -;+rod quality.
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(f) Electric motors and sets of appliances for electric equipment for bridge
cranes were all imported from the USSR, primarily from factories in Moscow.
For 1952 it was supposed that factories in, Mukden would supply No 17 with
such materials because former Japanese plants in that city had been
rehabilitated.
.
(h) In regard to the general supply situation at Factory No 17
(g) Electrodes - The normal electrodes(No 36 according to Soviet standards) were
produced by No 17 for its own use and for other consumers. It manufactured
about 12-15 tons monthly of electrodes for its own use. Total production
capacity for electrodes was approximately 30 tons but could be increased if
necessary. The electrodes were usually of 4-5 mm diameter and were coated.
The coating had to be changed from time to time in the production process by
No 17 depending upon the chemicals available at the time. Iron wire of fairly
good quality was received from the USSR. In 1949 the wire available was mostly
from old Japanese stock. In 1950 and 1951 we needed wire of 4 and 5 mm diame-
ter for electrodes. We had a very soft wire of high quality with a 62 mm diame-
ter. We gave this wire to a special steel plant in Dairen (Factory No 19 or
20?) to lengthen the wire to the proper size. When the coils of thin wire
were returned we found that many were nearly useless for our purpose as the
contractors had used Fushun coal to heat the wire and the iron had absorbed 25X1
much sulphur
that time it had a relatively large stock of metal (abouty2
00
u
,
0to 3,000
metric tons), collected from former Japanese plants. The stock was composed
mainly of iron of frame construction quality, greatly varying in size and
shape. Some of the iron pieces were heavy L or U shaped and 20x300x200 mzr+..
There were also approximately 300 tons of high quality steel mostly suitable
for tool production. This type of steel also greatly va type and
shape, was not certified, and was of Japanese origin. 25X1
In addition, in a far corner of the plant premises was piled a stock of
disassembled and broken machines and construction. This pile must have been
at least 1500 tons although it was never weighed. 25X1
were used in items included in the production aplan
~ In~orderbt
V
~th
.
o
use
is
material it was frequently zl;cessary to redraw the original design for pro- 25X1
duction utilizing heavier profiles than had been ordered. The heavy pieces
were mostly used for frame works for the new factory shops and also for some
auxiliary constructions such as poles for high voltage wires and the assembly
and examir.',tion stands for bridge cranes. The pile of old damaged machines
and mets.1 eras nearly all used up, all the suitable parts having been cut up and
used for items in the production plan at a time when No 17 was short of new
materials of sizes required. The remainder was cut up by the oxygen cutting
process and used for scrap by the factory furnace. In 1950 No 17 sold to a
Chinese government firm in Tientsin about 200 tons of scrap. Iron included
in this scrap consisted mostly of narrow ribbons left over by the iron-
cutting machine. By the beginning of 1952 the factory had little scrap
left. The problem then became one of collecting scrap from the factory area 25X1
and of assembling odds and ends from the welding shop.
a
e i
l
i
.zc
v
a
s ec~e
v d
from the USSR which had been ordered in 1950 and had been delayed in delivery. 25X1
No 17 received fromAnshan only iron sheets and especially bars for use in
aviation gas storage tanks and metal pontoons
For sketches of layout and profile of the casting spar mere.,, an a..s uimens ors.s,
see Enclosure (A)J The equipment of the foundry in general was old axed. was
obtained from various sources. It had been fully rehabilitated, having beery, in
poor condition.. Exceptions to the above were: a) the five-ton crane iii the ir~:~t~
casting department, was built by No l7 in approximately 1949, b) the three-ton
crane in the malleable casting department, was repaired --r''alled by No 17;
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it had been obtained from Port Arthur and had been manufactured
some machines for preparing loam and sand, were produced by No 17, d) some 25X1
machines for centrifugal casting of blocks for piston rings and sleeves, were
constructed by No 17, e) a small. electric furnace for melting iron for centrifu-
gal castings, was built by No 17.
(a) fee Enclosure (B) for sketch of and details on the Hot Pressing Shop.7
(b) fee Enclosure (C) for layout of the First Mechanical Shop, its dimensions,
location and type of machines, and general information-7
(c) or a sketch and detailed information on the Second Mechanical Shop,
see Enclosure (D).7
(d) /The Electric Welding Shop - for a sketch of this shop and detailed informa-
tion see Enclosure (E).7
(e) rThe Instrument (or Tool) Shop, Cold Pressing Shop, and Metal Plating Shop -
for sketches of and details on these shops see Enclosure (F)_7
(f) /The Mechanical Repair Shop - for a sketch of and detailed information on
this shop see Enclosure (G)]
(g) Lor a sketch of and detailed information on the Assembly Shop, see 25X1
Enclosure (H).
In regard to the question of balance of plant facilities,
how Factory No 17 was assembled in 1948, and 25X1
that it was a combination of very different units. Two unusual sections of the
plant were the Enameled Hollow-Ware Shop and the shop which produced metal caps
for electric bulbs. The instrument or tool shop.producing drills, cutters, pis-
tons, and piston rings had very light machines and a very light casting depart-
ment. The largest component of No 17 was the former Suzuki plant of Dairen,
which specialized in welding frame construction such as hangars and godowns.
As auxiliary sections it had relatively small mechanical, hot pressing, forging,
and woodworking departments. It had about one thousand workers as well as a
trained management. This Suzuki plant in late 19+8 was removed to a prac-
tically unoccupied location which was located in the western half of the large
Dairen-Kikai premises. '_nitially, the new factory received only the skeletons
of former shops and one and one-half rooms in an office building. Two shops
were more or less in working order but they were occupied by the switching shop
of the Southern Manchuria Railway. The Economic Department of the Civil Admin-
istration of the Soviet authorities in Dairen decided to create a large factory
which would primarily produce hoisting machines, initially bridge cranes. For
this purpose No 17 had at hand only the welding department properly staffed with
workers and equipment andsapproximately 500 skilled workmen. The plant also had
experienced engineers accustomed to working together and an energetic management.
However, there was a lack of machines to produce such items as gears. The goal
of this plant at that time was eventually to be able to produce one thousand
cranes per year. Such a goal required the construction of large new shops, new
machines, motor roads, and railway lines of standard and narrow gauge. During
the first year, ie in 1949, it was at first necessary to rehabilitate the shops.
The skeletons of the buildings had been stripped by the Chinese population. of
their last piece of wood during the period 19+5_!8. In order to avoid having
idle workers and also to fulfill orders of local Soviet Army and Navy units,
the plant produced such items as tire vulcanizers, automobile tools and parts,
gasoline tanks, nuts and bolts, and enameled bowls. By 1950 most of the shops
were repaired and in their current fe-arly 195 7condition and the factory manage-
ment was looking forward to further expansion in both buildings and machinery
in accordance with its general specialty of bridge cranes. However, at that
time the policy in the Soviet administration changed, and the further develop-
ment of Factory No 17 with its orientation to Soviet markets was stopped. The
new policy was to produce items which would all go to the Chinese authorities.
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The above changes made for an incompletely organized factory and unbalanced its
equipment. However, the management did try to eliminate some of the parts of
the plant which did not fit into the general picture. The enameling department
was closed in early 1950. As a result, a full set (7-12 pieces) of cold presses
(up to 90 tons) became idle and in 1951 were turned over to a Chinese cartridge
factory in Mukden. Also, some small lathes of older types were delivered to
other Chinese factories after the lathes had been repaired. On the other hand,
the factory management attempted consistently to build up its large equipment,
ie such items as large lathes, hammers, ovens, and furnaces. Up to 1952, at
least, it was difficult to attempt to produce a balanced plan which would fully
utilize the factory equipment. In order to utilize fully the casting shop,
No 17 needed large orders (1-2 thousand tons) for heavy, simple products which
would not have to be passed on too often to other shops for finishing. There
were not toomany orders for such articles, but No 17 did produce water mains
and fittings of over 75 mm diameter, preferably over 100-150 mm in diameter, and
some bodies for machines. In order to utilize fully the hot pressing department
and part of the Second Mechanical Shop, No 17 needed orders for several hundred
tons of nuts and bolts and/or telegraph-telephone hooks for insulators. To pro-
duce 100-150 crane bodies was by no means enough for the capacity of the welding
department, but the mechanical shops were unable to provide gears and shafts for
a larger number of cranes, being limited in special cutter equipment. Therefore,
the welding department requested more orders which would be less tied in with the
mechanical shop, such as orders for pontoons and gasoline tanks. Narrow gauge,
mine tip-wagons were very acceptable because they provided work for welders,
for small lathes and revolving machines, as well as for the assembly shop. In
order to utilize fully the smaller lathes of the First Mechanical Shop, No 17
needed orders for cylinder sleeves, pistons, and piston rings. These orders
were obtained. From the above, one can easily see that Machine Factory No 17
could not have balanced equipment even in the most general sense and certainly
did not properly use specialized machines. The plant was heterogeneous and had
to have miscellaneous orders in order to stay busy. It was unbalnaced in regard
to a) the capacity of the shops, b) the equipment. The reasons were that the
separate parts of the factory were a) not fully unified, b) the reconstruction
as one factory devoted to the production of hoisting machines was frustrated.
he Soviets in 194
Factory No 17 was one of the tuna a few exceptions in Dairen
in not being dismantled. The Suzuki Plan
did not lose a single machine. The only items w is were a en, sec e
they were considered to be war booty, were frame constructions for two hangars
which had 'been manufactured fill an order for the Japanese military authori-
ties.
its losses a were more a r ere
The oxygen
plant in Japanese times was part of the Dairen-Kikai enterprise ana had two sets
of generators. Very soon after the arrival of the Soviet Army in Dairen, the
oxygen plant was taken over by the Soviet military authorities for their own
use to help out their repair shop and for hospital use. Prior to 19+8 a third
set of generators was added to this plant by the Soviet Army which had acquired
them from some Japanese factory. The whole shop became a part
It had been operated by soldiers of some Soviet mechanical unit
one shift was still composed of these soldiers.
The factory a a specs reement with this Soviet military unit by which the
unit furnished one.shift of soldiers and the factory each day sold a certain
number of cylinders of oxygen (less than 100) for a fixed price to the unit.
the Soviet Army was interested not only in obtaining the
oxygen but also in providing the soldiers with practical training. The factory,
when it moved to its present site in 1948, found that the bulk of the area which
it now occupies was practically in ruins. The exceptions are mentioned below.
fee Enclosure (I) for a sketch of the factory grounds and detailed information
about the grounds
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8. Speaking generally about Dairen, in regard to damage and seizure by the
Soviets in 1945, one can see the following pattern.
(a) The following plants were left intact and even protected by the Soviets
against robbery by the Chinese:
(1)
The Southern Manchurian Railway's main shops, as well as auxiliary
railway activities in general.
(2) Dairen Dock.
(3)
The Port of Dairen itself, that is the section on the southern side of
Victoria Bay, perhaps with a few small exceptions.
(4) The Suzuki Plant.
(5) Bean oil and other vegetable oil plants. At any rate, nearly all
Japanese-owned factories which had had new equipment and processes
were in production by the end of 1945- Soviet authorities at that time
shipped vegetable oils to Vladivostok.
(6) By chance some small privately owned factories were not touched par-
ticularly those which had no heavy machinery. An example would be the
instrument or tool plant.
(b) Equipment seized by the Soviets:
(1)
(2)
(3)
would ' 'e opened
The Soviet authorities obviously operated in an organized manner in
seizing nearly all the newer types of heavy machines to be found in
Dairen, with particular emphasis on metal working machines, electric
generators, and electric motors. Even two boilers of very recent con-
struction (manufactured just before or even in the early part of World
War II) were taken from the electric plant of Amanagawa in Dairen.
The machines were disassembled, packed, carefully marked, brought to the
port, and shipped to Vladivostok.
Loading of the machines was done hurriedly. The reason for this was
that there were widespread rumors that on about 1 Nov 45 Dairen Port
(c) Chinese robbing Japanese factories and houses - Soon after the Japanese sur-
'render, the Chinese began to rob Japanese factories and houses. Sometime
afterward, the equipment which had been robbed was found to be in use or in
storage in Chinese factories. Later, much of this equipment was bought by
Factory No 17 and c' '..er plants.
9. In regard to rehabilitation Factory No 17 itself was
not destroyed by Soviet seizure and damage. The-,destruction experienced by the
shops on the territory taken over by the Factory in 1948 was repaired in the
following manner,
(a) Main buildings were rehabilitated or built afresh by DALENERGO, utilizing
its capital building department, ie new capital investments. This depart-
ment gave all metal construction work to Factory No 17.
(b) Smaller buildings were repaired or built anew by No 17, utilizing a "Cur-
rent repairs" account.
(c) Rehabilitation of machines which Factory No 17 received from DALENEftGO
or bought itself from Chinese factories or sellers, as well as
t e re a ilitation of appliances such as furnaces and ovens, was also done
by No 17. Major work was placed on the account of the capital building
department; minor work under the current repair, ac:. art,
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(d) New machines which came from the USSR (including two shears which were of
East German manufacture) were charged to the account of new capital invest-
ments.
(e)
all expenses were paid for in I
Manchurian currency an were rea y erefore of no cost to the USSR, being
paid in occupation paper money printed by the USSR and twice devalued. Some
actual assets for DALENERGO were the machines which arrived from the USSR,
but the cost of these machines was only a small fraction of the cost of the
machines seized in Dairen by the Soviet authorities and transported to the
USSR.
10. In discussing the subject of the extent to which plant facilities are utilized,
it is correct to state that the factory was not used to the full extent of its pro-
ductive capacity. The main reasons for this were the planning policies which had
to be followed and the policies of the authorities in placing orders. The fac-
tory could have a better output even in its present unbalanced condition as re-
gards its machines, if the production plan handed down from Mukden would be
a) nearer to factory possibilities or potentialities, b) undergo less changes
from year to year, c) keep production concentrated on a smaller variety of
items. Another handicap in proper utilization of the plant was the removal
from active positions of authority of Russian emigre engineers. These positions
had been that of director, chief mechanical engineer, and masters of shops.
These Russian engineers were retained in the head office of the factory only
as technical advisors. Until early 1952 No 17 had no acute shortage of materi-
als to meet its production plan. The factory could avoid difficulties by sub-
stituting one material for another. This obviously resulted in some loss of
time and materials in the production process, but it was not a large loss. Most
of the difficulties were caused by orders which were given over and above the
production plan in the middle of the year. An example was the order for army
bedstands. All this was very troublesome.,, but had no real importance in affect-
ing fi
The Russian-em. gr engineer- LJnI
ing staff was not certain of rece v ng a regu ar supply of materials from the
Industrial Administration in Mukden.
11. The total number of employees at Factory No 17 was approximately three thousand
for the period 1951 and 1952. In 19+8 it was a little over two thousand. About
15-20% of the total workers were women, working in: a) the foundry, as molders
and pourers in individual casting of piston rings and as molders for insulator
caps; b) the welding shop, as welders for less important work; c) Mechanical
Shop No 1, as turners, cutters, and polishers on piston ring production; d)
Mechanical Shop ITo 2, in production of nuts and bolts; e) production of electric
bulb caps, in galvanizing, cleaning, sorting and pressing; f) hot metal plating,
as sorters; and g) the electric repair shop. In regard to fluctuation of
employees, the ratio of fluctuation was calculated by comparison of the total
number of workmen at the end of the year with the sum of dismissed workers,
plus newly employed workers, during the year. This was a Soviet method of cal-
culation which served to exaggerate greatly the fluctuation figures. This method
of calculation for the years 1950 and 1951 indicated about 60% of fluctuation
with some decline in 1951. The main reasons for the above were- a) Factory
No 17 had about 200 pupils which attended a four- or five-month course and were
included in the general total of personnel; all 200 twice a year were shown as
entering the factory and more than half of the number as being dismissed, whereas
actually they were merely graduated and were accepted in other Chinese factories
at a better wage than No 17 could pay; b) some trained workmen were decoyed to
other Chinese factories with better wages. Usually the management of No 17 did
not oppose such a change as (often)`theae same workers (after a few months) applied
for re-employment at No 17. In 1952 and later it was expected that the flucuta-
tion would decrease as all mechanical industry was concentrated under the Indus-
trial Administration in Mukden. On the other hand, it could be that this admi nis.a
tration might decide to reinforce some other factories at the expense of No 17.
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In 19+9 and 1950 No 17 was sometimes pressed by DALENERGO to let many of its work-
men go to other factories. Quite a few welders went to Dairen Dock, after having
worked there some months and having organized production of lighters, At that
time, No 17 was a contractor for this work at Dairen Dock. At another time, a
number of fitters, working on general repair of water, steam and oil pipe systems,
was also retained by Dairen Dock. Also, about 60 workmen from No 17's repair shop
were transferred to the soda ash factory, after having worked on repairing that
factory.
12. In regard to the breakdown of number of employees by departments, the following
approximate figures, totalling 2900, may be given:
Office - 200 (including laboratory)
Welding - 500
Casting - 500
Two mechanical shops - 400
Repair shop - 400
Assembly shop - 300
Hot pressing shop - 150
Cold pressing and metal plating shop - 150
Inspectors - 50
Woodworking department - 100
Transpor4 and loading workers - 100
Oxygen dei:artment - 50
The above figures for the shops, beginning with welding and ending with wood-
working, include electricians.
13. In regard to the number of shifts, each 25X1
shift was eight hours. The average number of shifts for all the shops of the
factory was calculated to be 1.6-1.85. These, however, are only general figures.
In practice the number of shifts was not the same at all times, even if the num-
ber of employees was constant. It actually depended upon what type of production
was considered to be most important at the moment. If certain activities required
the use of machines of which the factory was in short supply, workers would at
once be removed from less important jobs and machines and placed on second and
third shifts to work on the machines which were doing the important work. Such
machines were DIP lathes, revolving lathes, and carousels (boring and turning
lathes). They were usually worked the three shifts, as were some machines in
the repair shop. Usually in November and December of each year the assembly
shop operated on a three-shift basis, as it did not have adequate space to place
all the workers needed to assemble production which was considered particularly
important for the successful completion of the plan for the year.
14. In regard to skill of employees, speaking generally, high quality production of
more important items could be and was done. The question of course remains how
many rejected parts were left. To decrease the number of rejections by the con-
trol department (inspectors), the factory needs: a) good machines, b) good shop
chiefs, and c) alert foremen. Factor (a) at present would be out of control of
Factory No 17 as new equipment at present may only be received from the USSR via
Mukden and Peiping, and this equipment would be part of the annual, over-all
Soviet-Chinese trade contract. In regard to factor (b), the shop chiefs are now
all Chinese and not one of them is an engineer. Their lack of education and
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their fear of punishment made them very inefficient administrators. Of course
the transfer of the top management of the factory to Chinese hands did not help
the situation. As regards factor (c), during 1951 and 1952 the foremen were
greatly demoralized by the campaign of punishment for any possible errors. In
regard to the question of number of skilled, semiskilled and unskilled workers
in each major departmen-t_unable to give the figures for each department.
However, a general reply would be that the factory had very few unskilled
laborers. In all the shops there were from. 50 to 70 cleaners, about 50 men
in the welding department to move heavy parts and materials, about 50 to dis-
charge and load materials and production on and off of railway cars. That is,
there was a total of from 150 to 200 men and women in the unskilled laborer
category. In regard to semiskilled hands, there were about 200 industrial
pupils and approximately 800 men and women of low-grade of qualification, ie
of the second and third grades according to the Soviet seven grades qualifica-
tion system, the seventh being the highest. There were about 900 skilled laborers
of average skill, ie fourth and fifth grades. There were about 400 to 450
skilled workers of above average skill, ie sixth and seventh grades. Factory
No 17 had from 50 to 75 men of the seventh grade. These outstanding workers
were mostly concentrated in welding, mechanical shops, tool producing, and
repair shops. The foremen were chosen from this group. In regard to shortages
of skilled labor, the factory management did not feel that there was any acute
shortage of skilled labor needed to fulfill the production plan assigned to the
factory. Efforts to increase the skill of workers were made for two reasons:
a) to be able to have more foremen and if necessary to promote the most able of
them to higher positions, b) to be ready for more difficult and new types of
production. In 1952 the situation worsened because of the promotion of Chinese
personnel to the positions previously occupied by local Russians, and, as a
result, the quality of foremen declined. Incidentally, the Chinese industrial
pupils who trained from four to six months by working at No 17 were given this
rxstructi.on more to provide training of general use to all Chinese factories
than just to No 17. There were also political reasons. In regard to the num-
ber and technical quality of Soviet technicians in the plant there were about
five of them as of 1950. However, by early 1952, they had all departed.
In 1951 all these Soviets had been removed from No 17 and the majority of
them returned to the USSR. One or two of them became members of the advisory
commission which supervised four Dairen mechanical shops which belonged to the
Chinese Industrial Adm.inistrution in Mukden. Once or twice a week, one of them,
formerly the ch_l?:,f engineer :a'L No 17, visited the plant, but in practice these
visits had very 1-Jttle effect. in 1952 the one or two who had
remained were also soon to return to the IBM. A special school in Dairen,
but not at Factory No 17, ~*a.s organized by DALENERGO. The school later was
transferred to some higher author.ity+ The school was operated by Soviet engi-
neers working through interpret -rs.and the course lasted from four to six months.
There were at least two levels -;f workers entering the school. Some of these
were of average skill, ie third and fourth grades; others were of the highest
qualification, ie sixth and seventh grades. In addition, perhaps two or three
of the most highly qualified workers were sent to some other school, considered
to be of university level, for about a one-year course, at which time they were
trained to be engineers. None of the workers last mentioned had returned to
No 17 Factory No 17 usually considered the men sent to
the above school, particularly the most skilled workers, as lost to the factory
because they usually did not return and were used at other new plants.
15. In regard to the extent of Soviet managerial activity in the plant, five or s.o
Soviet technicians were recalled from No 17 after the breakup of DALENERGO.
The technicians were engineers and bookkeepers. Also, after the transfer of
the management of the plant to Chinese hands from the hands of the local Rus-
sians, the influence of the USSR on the factory much decreased. Of course, it
is very likely that the influence is retained by having Soviet advisers in the
Chinese Industrial Administration in Mukden, but this fact, if it was a fact,
was not known to the managerial staff at No 17. Incidentally, none of the
correspondence was in Russian at the plant.
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CONFIDENTIAL 25X1
-11+-
16. In regard to personalities at Factory No 17, I the 25X1
management of the plant in the summer of 1951 was transferred to the Chinese,
and the former director, a local Russian named Alexander Alexandrovich Ganshin,
became only a vice director with no powers of decision. In practice, in the
first months of 1952, Ganshin was merely an important advisor who answered ques-
tions put to him by the Chinese director, guided the work of engineers at the
plant in the proper direction, but had no policy making powers. Initially, in
the summer of 1951, the management was turned over to a Communist woman from
Shansi, who was about 35 years of age. She had no education of any particular
significance, perhaps she had finished the equivalent of a Chinese high school,
did not know the Russian language, and spoke only a very few English words. She
was a wife of a prominent Communist in the Dairen administration. In late 1951
she became only the second vice director and the directorship was given to a.
Chinese man who was the local representative of the Industrial Administration
in Mukden.. In addition to his being named Chief of No 17 he was also director
of another machine factory, Neither of these Chinese was able 25X1
actually to function as the Director; the woman was incapable and the man was
too busy. So it may be said that Ganshinin practice, retained the directorship
and at the same time observed the proper courtesies toward the formal directors.
In early 1952 another Chinese man from Mukden was appointed director of Factory
No 17. This was his only post he actually ran the plant. 25X1
Therefore, at present, the management is Chinese, but the engineering brains are
those of local Ruc tans who no longer have the power of decision. Most important
among the officials of the plant were:
(a) AA Ganshin
(b) Among the most important technicians was Nicolai Nicolaivich Ovchinkin
(c) Igor Nicolaivich Buniakin,
(d
fnu) Yogolevich was chief of the laboratory of the factory.
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-15-
There were no labor heroes at the Factory.
17. In regard to expansion, Factory No 17 itself is an expansion from the status
.1 nt.e
of
~.a.aiats
for a major expansion had not come about. In regard to sources and availability
of machines for expansion, new machinery came from the USSR, while used and
damaged machinery came from the various demolished shops in Dairen. For par-
ticulars see above. In regard to whether expansion was contemplated, as of
early 19.52, it was not clear for the local Russian management of the factory
what goal the Chinese had in mind for the development of Factory No 17.
Apparently the Chinese authorities had no idea of allowing the plant to
specialize on production of a few large items, which course would have per-
mitted it to match its production more or less to its equipment. On the con-
trary, the Chinese authorities placed orders for the same type of item with
two or three plants instead of only with No 1 , although No 17's officers pro-
tested this strongly. Factory No 17 perhaps will be
combined with Factory No 18, particularly if the Chinese authorities decide
to produce railroad freight cars. Factory No 18 (the former Dairen-Kikai
works) is a next door neighbor of No 17. In fact, No 17's foundry used to
belong to Dairen-Kikai. In addition, No 17 has large empty spaces available
on its property adjacent to No 18.
,ENCLOSURE: (A) Sketches of layout and profile of the Casting Department, and
its dimens i cry .
(B) Sketch and deta.:u: :)f the Hot Pressing Shop.
M Lay:~:xt of the First Mechanical Shop, its dimensions, location
and type of mar.iris - general information.
(D) Sketch and detailed information on the Second Mechanical Shop.
(E) Sketch and det":sled information of the Electric Welding Shop.
(F) Sketches and details of the Instrument (or Tool) Shop, Cold
Pressing Shop, and Metal Plating Shop.
(G) Sketch and detailed information on the Mechanical Repair Shop.
(H) Sketch and detailed information on the Assembly Shop.
(I) Sketch of the Factory grounds and detailed information about
the grounds.
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CONFIDENTIAL
page 1 of 2
ENCLOSURE (A)
CASTING DEPARTMENT (FOUNDRY) OF No 17 - March 1952
m o6-og
r-1 N I"'1 It LC\
\-. v v / ti./
NOT TO SCALE
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 Approved For Release 2009/07/01: CIA-RDP82-00047R000400300010-2
PBCFII,Z Al) SCBEM&TIC CROSS SECTION (as per A,B,C,D)
CF CA8i*YBGG DBPARTMT - March _1952
This section inadvertently varied "from scale,
should be narrower
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CONFIDENTIAL
ENCLOSURE (B)
page 1 of 2 UNC(
THE HOT PRESSING SHOP (or Forging Shop or Blacksmithy) - March 1952
01
C)2
_ 32
02
L1
(02
O
o n 02
0 4
2nd
floor
lD
17