Semi Knockdown Disassembly
Why are Russian automotive giants dreaming of shrinking?
Irina Smirnova | Leningrad Region
October 9, 2015
An independent workers union has held a rally protesting layoffs at AvtoVAZ, which is planning to cut 15,000 of its 49,000 workers in the near future. No one has officially voiced these figures, but trade unionists managed to sneak a peak at the lists of “superfluous” people. Layoffs are also anticipated at two subsidiaries, AvtoVAZagregat and Volga Machinery Plant (VMZ). Until recently, 2,000 people were employed at the first plant, which is a major supplier of car seats. Now the plant is undergoing bankruptcy proceedings, and its workers have not been paid for three months. The prosecutor’s office has filed 800 lawsuits to recover back pay, and activists at the plant have gone on hunger strike, but what is the point?
AvtoVAZ had conducted mass layoffs last year. 12,000 people left the company then. AvtoVAZ’s president, Bo Andersson, claimed the company was not planning mass layoffs of workers in 2015, but would part only with 1,100 apparatchiks. But workers anticipate a new round of layoffs, and trade union activist Vyacheslav Shepelyov has been fired for taking part in the hunger strike.
AvtoVAZ is not simply a big factory, but an indicator of the situation in Russian industry. Strategic decisions regarding the auto-manufacturing giant are made at the government level. And here, it seems, a social explosion is brewing.
“Who told you about an explosion? Those are tall tales!” says Alexei Etmanov, chair of the Interregional Trade Union Workers Association (ITUWA) and a deputy in the Leningrad Regional Legislative Assembly.
As always, Etmanov does not mince his words.
“A thousand people came out and made a little racket, and what of it? Hunger strikes? Even if everyone starves to death, people will still get laid off. They have got used to spoon-feeding a toothless trade union, so now they can take it on the chin.”
Etmanov believes that AvtoVAZ inevitably faces a restructuring under which its non-core assets will be cut loose. But layoffs can and should be resisted.
“Look at Air France. The company management there was nearly torn to shreds: they had to run to escape from enraged employees. As a result, management came to the opinion that layoffs might not be so inevitable, that they were negotiable. But management grows fat on our problems in Russia. AvtoVAZ employees are not even willing to join a [militant] trade union. How will they defend themselves? The people gobble up anything the boss brings them in his beak.”
But isn’t AvtoVAZ part of your trade union?
“They are an entire eighty ITUWA members among a workforce of 49,000. We are not a mass force there capable of protecting workers. The workers will not be able to achieve anything for themselves within the official trade union. Alas! They will go to work as janitors, leave the country for a better life or drink themselves to death. Our people have no experience of fighting for their own interests. They are intimidated and broken. I blame myself as well. I have done little to ensure that working people show more solidarity. That is our main concern: to teach them solidarity. We live under the harshest capitalism, and it is simply naïve to expect mercy from above.”
Although, as Etmanov stresses, protesting is not the only way to fight for jobs.
“For example, the government of Leningrad Region has passed a law reducing Ford’s property tax by 50%, which amounts to 160 million rubles. For a small plant, that is substantial assistance. The federal government, of course, has greater means of this kind than local authorities. The ITUWA is preparing a package of measures to save the Russian car industry, measures that were applied in Brazil, Germany, and other countries during the 2008 crisis. Although certain State Duma deputies shout, ‘Why help American automotive giants?’ They don’t understand that [companies like Ford and Nissan] have long become part of the Russian automotive industry. The plants pay taxes in the Russian Federation, and our people work there.”
But after the collapse of the ruble aren’t Russian-made cars more competitive? They are now cheaper than their foreign counterparts.
“In fact, they are not cheaper,” objects Etmanov. “The difference in the currency exchange rate devoured the entire profit margin, since AvtoVAZ imports most of its parts from abroad because Russian suppliers cannot provide the high-quality product that a normal car industry needs. Car production in Russia is unprofitable; there is no margin. And the question of the day is whether there are enough of these companies that adhere to quality standards and do not want to manufacture bad cars. Now they are working at a loss.”