Customer Corner : Pauny – Argentina’s Tractor Behemoth and Its Lingering Stench

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In the dust-choked fields of Argentina’s pampas, where the sun beats down like a hammer on an anvil, one company has built an empire on diesel, debt, and dirty deals. Pauny S.A., born from the wreckage of Argentina’s 2001 collapse, calls itself a symbol of worker resilience. They spin tales of solidarity, revival, and rural pride. But scratch the paint and what seeps out isn’t inspiration. It’s a reeking stew of political favouritism, alleged corruption, and backroom barter. A company hailed as “recovered by the workers” that’s instead propped up by cronies and quietly tethered to Cummins – the same Cummins drowning in its own scandals.

From Bankruptcy to Backroom: A Revival Built on Shifting Sands

Back in 2001, Argentina imploded. Riots, hyperinflation, banks shuttered. Construcciones Metalúrgicas Zanello – a once-proud tractor maker – went under. Out of the ruins came Pauny, founded in 2002 by a mix of workers, ex-executives, and local dealers. The story was marketed as heroic: labourers saving their livelihood. But critics and local commentators have long described it as a politically engineered takeover, not a grassroots miracle.

Provincial backing from Córdoba helped the deal along. Pauny was swiftly declared a “Terminal Automotriz Nacional” in 2004, unlocking state credits, partnerships, and access to public contracts. It’s a familiar pattern in Argentina: loyalty over merit, subsidies over competition. The revival was real – the ethics less so. The company marched forward under government protection, and the whispers of “corruption niches” followed.

The Venezuela Debacle: Exports, Bribes, and the Oil-Stained Trail

Fast-forward to the late 2000s. Pauny rode a wave of Argentine–Venezuelan trade under the Kirchners and Chávez. Tractor shipments worth millions flowed through bilateral “cooperation” deals. In 2009 alone, Pauny exported around 400 tractors valued near US$25 million – nearly half its revenue that year.

But behind the diplomacy sat an industry-wide kickback racket now infamous as the Fideicomiso con Venezuela scandal. Argentine suppliers allegedly funnelled “commissions” of 10–15% through intermediaries like Palmat International and Madero Trading – firms later flagged in U.S. and Argentine investigations for bribery and laundering.

Pauny appeared repeatedly in reporting tied to the affair, alongside other manufacturers accused of paying to secure contracts and fast-track payments. Figures like Roberto Wellisch, Francisco Carrasquero, and José Ernesto Rodríguez surfaced in documents tracing payments through Miami and Panama. Witnesses, including former ambassador Eduardo Sadous, described coercion and cash channels greasing the wheels between Argentine exporters and Venezuelan state entities such as PDVSA and Bandes.

No convictions have directly landed on Pauny, but prosecutors have continued probing the wider network since 2018. The paper trail shows millions in unexplained fees. It may never reach a courtroom, but the smell of impropriety has never left the factory floor.

Cronyism as a Business Model

Pauny’s local reputation has been dogged by allegations of cosy government contracts and preferential treatment. Agricultural forums and trade critics have accused it of cutting “tranzas” – shady deals – with provincial officials to sell outdated kit at inflated prices. The charges rarely stick, but the pattern persists: a company born from crisis becoming a political tool, wrapped in populist imagery.

President Raúl Giai Levra and his circle have remained close to provincial power brokers. Pauny enjoys state promotion, awards, and visibility that smaller, more innovative rivals can only dream of. It’s not illegal – just typical of Argentina’s crony capitalism, where every handshake comes with a wink.

Hooked into the Cummins Conveyor

Here’s where it leaves the local mud and joins the global grease. Pauny is a confirmed customer of Cummins, fitting their diesel engines across multiple models. The EVO P-Trac 160 runs a 6BT 5.9; the 540C uses the 6CTA 8.3; higher-end machines like the Bravo 780i carry the Cummins QSL. The powerplants that make these tractors roar are the same ones built by a company fined nearly US$1.7 billion for emissions cheating.

So you’ve got Cummins, the self-declared guardian of sustainability, supplying engines to a manufacturer still haunted by export scandals and political patronage. It’s the perfect loop – grime feeding grime. Pauny’s machines may plough fields, but they’re powered by a legacy of pollution, corruption, and silence.

Conclusion: The Workers Deserved Better

Pauny began as a story of hope. But two decades later, it stands as a warning. The state-backed miracle became another machine in Argentina’s corruption carousel, welded now to Cummins’ international supply chain. The tractors roll on, yellow paint gleaming under Córdoba’s sun, while the history beneath them remains caked in dirt.

Every revolution promises purity at first. Then the contracts arrive.

Lee Thompson – Founder, The Cummins Accountability Project

Sources

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