Seventy employees of machine-building giant Uralmash's Spetstekhnika defense division are on an "indefinite" hunger strike over back pay and an illegal privatization plan by the company's directors, a workers' representative said Tuesday.


On Monday, workers went on a hunger strike calling for lost wages and transfers to another defense producer, state-owned Uralvaganzavod, said Nikolai Pospelov, head of Spetstekhnika's trade union. Fifty of the company's 2,500 employees picketed outside the factory.


"We shall stay here until our demands are satisfied," Pospelov said in a telephone interview from the company's headquarters in Yekaterinburg.


Spetstekhnika, which produces artillery equipment, shut its doors in May, sending workers on unpaid leave, Pospelov said. It owes workers $1.6 billion rubles ($5.3 million), company chairman Vladimir Rogov said.


Workers deserve their pay, Rogov said. But following a government default on contracts, the company does not have money to pay them.


"Workers' demands are fully justified," he said. "We are wrong, but so is the government."


The company converted some of its military technology, producing parts for trolley buses and agricultural machines. But neither trolley-bus makers nor farmers could purchase the products. Military factories constantly complain that civilian customers' lack of cash is undermining the country's conversion program, Rogov said.


Spetstekhnika's management was preparing to sell off the factory, Rogov said. Spetstekhnika's equipment and machinery were supposed to go to Uralmash and workers were meant to be transferred to Uralvaganzavod, in nearby Nizhny Tagil.


But before the firm could finish liquidating, management set up an illegal joint-stock society, which the directors used to obtain huge stakes in the company, Pospelov said.