Zavodi “Crvena Zastava”: Yugoslav Self-Management Socialism and Challenges for the Automobile Industry

Abstract

This paper explores the experience of the Zavodi “Crvena Zastava” (Red Flag factory) of building the Yugoslav automobile industry between 1950s and 1980s. In 1954 Zastava began to manufacture automobiles based on the FIAT license and became the engine that drove the transformation of Yugoslavia from an agrarian into industrialized, urban and motorized country. However, its own development was hampered by the lack of stability in the Yugoslav socialist system under continual process of change and decentralization. This paper will examine crucial stages in Zastava’s development in the context of the Yugoslav evolving self-management system in order to discuss some theoretical issues and problems of practical applications. The aim is to show that while the concept of self-management was reasonable in the light of Yugoslavia’s break from the Soviet bloc, the net effect of its practices proved problematic for the automobile industry.