First U.S. Factory OK'd For Cuba Aims To Plow A Path Into 21st Century | KERA News

First U.S. Factory OK'd For Cuba Aims To Plow A Path Into 21st Century

Feb 22, 2016
Originally published on April 14, 2016 1:48 pm

When President Obama travels to Cuba next month — the first visit by a sitting U.S. president in nearly 90 years — it will mark a historic step on the path to normalizing relations with the island nation.

While Obama is in Havana, two U.S. businessmen are hoping the president might spend some time with them — or even take a seat on a prototype of the tractor they plan to assemble and sell in Cuba.

Horace Clemmons of Paint Rock, Ala., and Saul Berenthal of Raleigh, N.C., have just received approval by the Obama administration to build the first U.S. factory in Cuba since the 1960 embargo. They plan to make tractors for small farms and have given their model a name any Cuban will recognize: Oggun. That's the name of a deity in the Santeria religion, the god of metal.

As their business, Cleber LLC, gears up, they keep in mind some encouraging words they heard from a Cuban who visited their booth at a trade fair in Havana. He told them, "You guys are doing something for the forgotten people of Cuba."

Clemmons, 72, and Berenthal, 71, have been business partners for decades. They worked for IBM for many years and then started their own software companies.

"I'd probably retire," says Clemmons, "but Saul keeps pokin' me: 'Let's go do this, and let's go do that.' "

Their new tractor business ties together the two men's life experience.

Berenthal is Cuban-born, the son of Jews who fled Eastern Europe during the Holocaust. He and his family left Cuba for the United States in 1960, when he was 16.

"[I] came over to the U.S. after the revolution," he says proudly, "learned to be a capitalist and made the American dream."

When Berenthal first heard the news about the diplomatic opening to Cuba, announced in December 2014, he recalls, "Being Cuban, I said, 'This is the path to get Cuba into the 21st century.' "

And when the U.S. loosened some trade restrictions on agriculture, Berenthal and Clemmons saw their opportunity. Clemmons grew up in rural Alabama and knows his way around a family farm.

"My grandfather farmed 40 acres with two mules and eight kids, and I often say, the kids did more work than the mules," he jokes. "I have drug an 8-foot cotton sack down the row pickin' cotton by hand. I have walked behind mules to farm."

The partners have seen farmers in Cuba struggling to till their land with shovels and hoes, or livestock. They know that Cuba needs food; the country has to import more than 70 percent of what it consumes. They figure as tourism expands in Cuba, the demand for locally produced food will only be greater.

With parts manufactured in Alabama, they will assemble the Oggun tractor at the port of Mariel, in the new special development zone there.

The Oggun is small, like a jacked-up go-kart, with the engine mounted behind. If it looks old-school, that's because it is. It's based on the old Allis-Chalmers Model G tractor, which was revolutionary when it was introduced, back in the 1940s. It was discontinued in 1955 when many U.S. farms outgrew its size.

Berenthal admits that he and Clemmons did hear skepticism about their plan to bring a 60-year-old tractor design to Cuba:

"One of the comments that was made to me was, 'Do you think people in Cuba are going to fall for this old American trick of bringing an old technology here and selling it and making money on it?' "

To that, they respond that they've updated the engineering, putting new technology in that old frame. The tractor will be easy to assemble and, with an open source manufacturing model, will be easy to fix and maintain.

Clemmons says their "make it live longer" model sets them apart from other equipment companies that use patented, proprietary components.

"[The other companies'] business model is, plan for obsolescence: build a new, better widget and make 'em buy the new, better widget," he says. By putting their Oggun design in the public domain, "We're just going completely opposite from that."

The partners will invest about $5 million to get their factory built and into production. They hope to start assembling tractors in the first quarter of 2017. They expect to build some 100 tractors a year to start, and ramp up to a thousand, not just for Cuba, but also for export to other countries in Latin America.

The tractors will sell for about $8,000 to $10,000: a steep price for a small farmer in Cuba. Clemmons and Berenthal expect that Cuban relatives overseas will help chip in. They say the Cuban government may help with loans. They've also had inquiries from tourist resorts expressing interest in buying tractors so that farmers can supply more food for their guests.

It's possible that the next U.S. president could undo the Obama administration's moves and reverse normalization to Cuba, putting their tractor business in peril. Berenthal and Clemmons shrug that prospect off. "We don't let fear get in the way of what is possible," Clemmons says.

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ROBERT SIEGEL, HOST:

President Obama will make a historic visit to Cuba next month, the first by a sitting president in nearly 90 years. And we're about to meet two U.S. businessmen who hope that the president might take a seat on their prototype tractor while he's in Havana. The Obama administration has just granted their company approval to build the first U.S. factory in Cuba since the 1960 embargo. They spoke to NPR's Melissa Block.

MELISSA BLOCK, BYLINE: They are Saul Berenthal of North Carolina...

SAUL BERENTHAL: Hi, Horace.

BLOCK: ...And Horace Clemmons of Alabama.

HORACE CLEMMONS: Hello, Saul (laughter).

BLOCK: They've been business partners for decades, first at IBM. Then they started their own software companies. Now they're in their 70s.

BERENTHAL: I'd probably retire, but Saul keeps poking me to, let's go do this, and let's go do that.

BLOCK: And now that is building tractors in Cuba. The farming knowledge comes from Clemmons.

CLEMMONS: My grandfather farmed 40 acres with two mules and eight kids, and I often say the kids did more work than the mules.

BLOCK: (Laughter).

CLEMMONS: I drug an eight-foot cotton sack down the row, picking cotton by hand. I have walked behind mules to farm.

BLOCK: The inside knowledge of Cuba - that comes from Berenthal. He was born there. He was 16 when he and his family left the island.

BERENTHAL: Came over to the U.S. after the revolution, learned to be a capitalist and made the American dream.

BLOCK: So when Berenthal and Clemmons heard that as part of normalizing relations with Cuba, the U.S. was loosening some trade restrictions on agriculture, they saw their opportunity. After all, Cuba needs food. It has to import more than 70 percent of what it consumes, and most of the small-scale fieldwork that is done...

CLEMMONS: It's manual and livestock. It's a rake-and-pick, shovel-and-hoe, or it's livestock.

BLOCK: Enter the Cleber Company Tractor. They've given it a name any Cuban will recognize.

BERENTHAL: Oggun.

BLOCK: That's the name of a deity in the Santeria religion - Oggun, the god of metal. It's a small, red single-row tractor like a jacked-up go-kart. And if it looks really old-school, that's because it is. It's based on the old Allis-Chalmers Model G tractor which was revolutionary when it was introduced in the 1940s.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MAN: The Model G is completely new, new in concept, new in design.

BERENTHAL: I'll tell you a little story.

BLOCK: Saul Berenthal recounts the skepticism they heard about their plan to bring a 60-year-old designed to Cuba.

BERENTHAL: You think people in Cuba are going to fall for this old American trick of bringing an old technology here and selling it and making money on it?

BLOCK: Here's how they answer that. They've updated the engineering, put new technology in that old frame. The tractor will be easy to assemble and, with an open-source manufacturing model, easy to fix.

BERENTHAL: In the environment that countries like Cuba have to operate, it is not how jazzy does it look, and it is not how many bells and whistles does it have or whether it has air-conditioning. No, what they need there is low cost of operation and self-servicing.

BLOCK: The partners will invest about $5 million to get their factory into production, they hope, toward the beginning of next year. They expect to build maybe a hundred tractors a year to start and ramp up to a thousand not just for Cuba but also for export to Latin America. The price per tractor...

BERENTHAL: Less than 10,000, as close as possible to eight.

BLOCK: And there's one big hurdle right there. Where does a small farmer in Cuba come up with eight or 10 grand? Clemmons and Berenthal expect that Cuban relatives overseas will chip in. The Cuban government may help with loans. There are still lots of unknowns, but the partners keep in mind something they heard at a tradeshow in Havana from a Cuban man who climbed up onto their tractor.

BERENTHAL: He said said you guys are doing something for the forgotten people of Cuba.

CLEMMONS: Saul and I have both used that phrase numerous times, and we told him then, if you don't mind, that's the way we will explain what we're doing.

BERENTHAL: We got copyrights to this statement, yes.

BLOCK: (Laughter) As for worry that the next U.S. president could undo the Obama administration's moves and reverse normalization to Cuba, Berenthal and Clemmons shrug it off. They tell me, we don't let fear get in the way of what is possible. Melissa Block, NPR News. Transcript provided by NPR, Copyright NPR.