Russia’s automaking hub of Togliatti is sliding into economic depression and blue-collar workers are taking the brunt of the pain as employers use the threat of joblessness to slash or withhold wages at will.
Central Togliatti is lined with discount retailers, payday lenders and pawnshops as the recession has cratered the car market.
Workers from the vast Lada car factory say they are increasingly desperate, but too scared to speak out due to what they claim is the threat of retaliation by managers.
“People are frightened to say even a single word,” production worker and union activist Nataliya Yemshanova said at a union meeting at a member’s apartment. “I cannot remember that happening before. They can pay less money. People will agree to any wage.”
Yemshanova provided The Associated Press with pay slips showing monthly earnings of just 10,300 rubles (US$135) for last month. She said her pay was slashed by half after she refused a demand to switch to cleaning floors and claimed some managers at AvtoVAZ, the company which owns the Lada factory, were using the threat of unemployment to force workers — especially those critical of the management — to accept lower pay.
A payslip in the name of Yemshanova’s brother, who works for the same company, showed earnings of 7,800 rubles for last month.
AvtoVAZ and Renault-Nissan, a French-Japanese alliance that controls AvtoVAZ through a holding company, did not respond to requests for comment on the allegations of wage cuts.
Many of Togliatti’s major employers supply the factory, meaning the car market’s malaise infects the city as a whole.
AvtoVAZ lost almost US$1 billion last year and its liabilities exceed its assets, leading auditors Ernst & Young to warn of “a material uncertainty, which may cast significant doubt on [Avtovaz’s] ability to continue as a going concern.”
The firm is the highest-profile casualty of a plunging car market, where sales dropped by more than a third last year and some foreign firms, including General Motors, have pulled out entirely.
Lada’s factory is now implementing a cost-saving plan that includes a reduction in head count. Moving to a four-day week this month has essentially meant a 20 percent pay cut across the board, on top of the arbitrary wage cuts workers claim to have suffered.
Under Renault and Nissan’s ownership of AvtoVAZ, there has been a drive to modernize the Lada range with new models based on Renault designs, but this has meant importing parts and exposing the Soviet-era network of parts suppliers in the city to extra competition.
AvtoVAZagregat, a company that made interiors for AvtoVAZ cars, but is under separate ownership, ceased production last year and is now in bankruptcy proceedings, leaving more than 2,000 people out of work. Chief executive officer Viktor Kozlov has been arrested on suspicion of tax fraud.
Elena Seliverstova, who worked for AvtoVAZagregat in purchasing for 25 years, showed documents detailing an ever-increasing portion of unpaid monthly wages since July last year, culminating last month when she received none of her monthly earnings of almost 23,000 rubles, money she needs to support her elderly mother.
“You know, it is a complete catastrophe,” she said through tears.
Only financial help from her son has prevented her electricity from being cut off in the middle of winter, Seliverstova said.
Mechanic Andrei Dobrokhotov said he had not received any money from AvtoVAZagregat since June last year, forcing his family to depend on cheap foods, such as barley.
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