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AvtoVAZ workers are set to begin protests this week after the carmaking giant halted production for a month on Friday because of overflowing inventories and flagging demand.
Yedinstvo, an independent labor union, will hold a rally on Thursday to appeal to the federal government to “create favorable living and working conditions in Tolyatti,” where employs more than 100,000 people.
“Only the government can fulfill these demands,” union coordinator Pyotr Zolotaryov said.
The government has been quick to act upon signs of social unrest. After 400 unpaid factory workers blocked a highway outside the Leningrad region town of Pikalyovo, Prime Minister Vladimir Putin made a lightening visit to the town, where he rebuked the factory’s owner, Oleg Deripaska, and ordered him to reopen the plant.
President Dmitry Medvedev followed up a week later by threatening to fire governors who failed to cope with unemployment and wage arrears.
AvtoVAZ has said that by halting its assembly line it hopes to bring production volumes back in line with demand and cut costs while retaining jobs. Workers will be paid two-thirds of their average salary during the stoppage.
But when the plant opens again in September, production will switch to a 20-hour week with a corresponding salary reduction. Yedinstvo estimates that the average salary of 12,000 rubles ($380) per month will be effectively cut to 6,000 rubles ($190), Zolotaryov said.
“The atmosphere at the plant is very tense, because people don’t know anything about their future, and AvtoVAZ management hides their intentions and plans about company operations,” Zolotaryov said.
But the firm’s travails may have repercussions that extend beyond its own factory workers. Parts makers are also finding their future dependent upon that of AvtoVAZ. Plastik, which makes steering wheels and bumpers for Lada cars, will not be working during August because of the stoppage. It will instead send most of its 5,000 employees on unpaid leave, said a source in the Syzran-based company who requested anonymity in line with company policy.
While no one was available for official comment at Balakovoresinotekhnika, which makes rubber components for AvtoVAZ, a person who answered the phone said the plant, which employs about 10,000 people, has been stopped for the past two weeks.
Yegorshinsky Radio Plant, another AvtoVAZ supplier in the Sverdlovsk region, filed for bankruptcy last month.
The shutdowns come amid worries that AvtoVAZ may lay off one-fourth of its work force. Acting president Igor Komarov is considering firing 27,000 workers, Interfax cited a source as saying last week. Komarov has headed the company while president Boris Alyoshin has been on vacation. AvtoVAZ has denied that plans for a layoff exist. Zolotaryov said employees had not yet been notified of any layoffs.
