On April 3rd, the European University at St. Petersburg held a meeting with Alexei Mordashov, general director of the JSC “Severstal” and one of the leading figures on the list of Russian billionaires, according to Forbes Magazine.
EUSP rector Oleg Kharkhordin presented the guest with a short biography, highlighting that Mordashov is a patriot of Cherepovets, where he still has an apartment.
“I do have an apartment in Cherepovets,” remarked the guest, smiling and joining in a dialogue, at times confirming and at other times contesting Kharkhordin’s statements.
Cherepovets is still the most globally integrated mono city among Russia’s industrial centers, continued Kharkhordin, adding that the city’s leadership has remained very energetic. He pointed out the local mayor’s support of initiatives giving citizens the right to distribute part of the city budget.
Since the meeting was more of a free dialogue than a prolonged formal exchange, Mordashov limited the retelling of his biography from his birth to the early nineties. Much of what was said, of course, has been reprinted in the media many times and is easy to find on the Internet. Still, what was most valuable were Mordashov’s personal experiences and commentary, which he gladly shared, returning to his childhood and college years.
Mordashov wanted to be an economist since childhood. “It was a strange dream for a child perhaps, considering that this was the end of the seventies and beginning of the eighties.” His idea of what it meant to be an economist then was to solve the problems of how things worked, how they were interconnected. It turned out he was more of an administrator than an economist.
The choice between Leningrad and Moscow then seemed easy, even natural. Alexei chose Leningrad. “Perhaps, because it was closer. Also because in Cherepovets there was a particularly pro-Petersburg community.” In addition, the student Mordashov didn’t find a suitable university in Moscow. At an interview with one of the Moscow deans Mordashov asked “Where do students work after studying here?” to which the dean replied “Well I don’t know...”
Mordashov described what seemed to him to be the motivations of the Leningrad State Institute of Engineering and Economics in an interesting way. There, the selection committee was interested in male applicants, as it was necessary to attract such students to work in different fruit and vegetable depots and other places. Because of this, it seemed they were glad that a young man came to them. The times were such.
“Education in Leningrad was a great experience. I was provincial, energetic, studied well, and graduated from the university in the city where there was a huge other world. I liked learning. I never received even a single four. I was active. I proudly received my red diploma and was first in my class. I was very proud of this.” But as it turned out, since then no one ever looked at his red diploma. Mordashov could have stayed and worked in higher education, but he did not want to. He wanted to work in production and he returned to Cherepovets.
Severstal is only 2/3 of what Mordashov owns. Its shares have gradually decreased, as Mordashov is also Chairman of the Board of Directors of the JSC “Siloviye mashiny [Power Machines]” and a member of the “Sveza” group that produces about 25% of Russia’s plywood, as well as the major gold mining company Nordgold.
According to Mordashov, the knowledge he attained at school and in the university helped him a great deal.
“It was a good education,” he said, turning to EUSP students, “and as banal as it sounds, all of the knowledge that you receive will be very necessary to you. Even self-education will not help you replace the system of basic education. I admit that as an undergraduate I skipped about 2/3 of my upper level classes. But I spent this time in the library and read a lot.”
In response to Oleg Kharkhordin’s question on whether what Mordashov studied has today proved beneficial, he answered: “Yes. At a minimum it was training for the brain, and many basic things haven’t changed.”
In order to become successful, as Mordashov believes, one must graduate from a university, and then go to business school. The preceding education can be in any field, such as English language and literature, but it must be followed by business school.
“People sometimes ask me how to become successful. I say: work. The ability to understand and accept the truth, to look for it, even if it is unpleasant. You should be able to change in accordance with what you understand, what you learn. Some say that I should lose weight, and continue saying that for decades. When you throw half a stone into water, you can’t expect that the water will go in half circles.”
Maksim Bouev, dean of the EUSP’s Department of Economics, referred to the well-known failed attempt in 2006 of Severstal to merge with Arcelor, one of the largest steel companies in the world (Mittal Steel won the bid), asked whether this was a kind of public relations fiasco for Severstal.
“Yes, most definitely yes.”
“Did you try to take leave of Severstal? Tell us about this,” asked Vadim Volkov, director of the Institute for the Rule of Law and author of the well-known work “Powerful Entrepreneurship.”
“Yes, I tried. There was an attempt to raider Olenegorsk Minining, but it failed. In Vorkuta the story was more complicated, more multi-stage. But there was no serious struggle, shooting, and no police presence. In addition there was an attempt to raider Severstal, but it was a personal, dramatic story connected with divorce, and about which enough has been already written on the Internet and in the media. Our specialty has always been a high degree of caution, and we had very good lawyers. It was not very fashionable then, but we managed. There were no strong splits in the team. And this helped us a lot. Then things began to improve and now a large business can protect itself. But a small business, unfortunately, cannot afford to.”
Meanwhile, EUSP students asked Mordashov whether or not he wished to pursue a career in science rather than production or business. Mordashov replied that this has never interested him. They then asked whether or not Severstal is seriously engaged in increasing energy efficiency. To this Mordashov answered that the company is dealing with this problem within the limits of profitability and financial viability.
“I’ve ascertained that I’m sitting with the first Marxist-capitalist,” continued Oleg Kharkhordin, recalling that a little earlier Mordashov had mentioned his love for Karl Marx.
“He was a theorist whose work was the Bible for us. But he is neither good nor bad. For me Marxism is the quintessential school of philosophical thought in which I grew up, and in this sense it carries a certain imprint,” answered Mordashov. He also believes that even such abstract subjects such as philosophy develop logic and reasoning, and Marx’s ideas about surplus value, private property and product distribution helps to understand the general theory of management.
“You said that your grandfather was an Old Believer, but your father became a production worker. Who had a greater influence on you?” asked Kharkhordin. Mordashov answered that for the greater part of his conscious life he has been self-trained, with the goal of becoming more efficient.
“Many conversations are about those people known as oligarchs. Well, I am one of them,” he continued, “and all oligarchs have two general characteristics. They are all very intelligent and energetic. Excuse me for the immodesty.” Mordsahov explained this by the fact that we live in a very competitive environment, where one must keep pace to answer all issues and challenges point by point.
“Whoever cannot do this does not work as an oligarch!” concluded Mordashov. The audience enjoyed the phrase.
Kharkhordin reiterated that Mordashov is a well-known Cherpovetsian, whose opinion of his compatriots was interesting to hear.
“Mordashov is a well-known surname in Russia, but what does Mordashov think about Bashlachev, for example?”
“I do not understand him entirely,” said Mordashov about the famous poet, singer, and idol to many fans of Russian rock. “He was certainly an interesting person. At age 27 he jumped out of a window. He was, like me, a product of his time. He was talented enough. Some went into the organization of production, but he went his own way, and many believe that he was a genius. Generally, it’s nice to love a dead hero. The living ones create problems. The quality of his music differs and the poetry is better, but I haven’t really looked into it.”
“Thank you, Alexei Aleksandrovich. We will love our living heroes,” concluded Oleg Kharkhordin.
Gevorg Avetikyan
