Russia's Motor City Braces For Widespread Layoffs AvtoVAZ, maker of Russia's iconic Lada sedans, will lay off 25,000 employees this December. One of every 7 residents in Togliatti, the city built in the late 1960s around the company, works at the Lada plant.
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Russia's Motor City Braces For Widespread Layoffs

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Russia's Motor City Braces For Widespread Layoffs

Russia's Motor City Braces For Widespread Layoffs

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STEVE INSKEEP, Host:

NPR's Anne Garrels reports.

ANNE GARRELS: With one of every seven residents in Togliatti working at AvtoVAZ, just about every family depends on the factory. As sales have plummeted, production has been cut in half along with the work week and salaries.

VLADIMIR POTAMASHNEV: (Foreign language spoken).

GARRELS: Thirty eight-year-old metal worker Vladimir Potamashnev now earns only $250 a month -, not enough, he says, to feed and clothe his family. He blames Prime Minister Putin for focusing on oil and gas at the expense of Russian manufacturing.

POTAMASHNEV: I once believed in Putin and Medvedev, but no longer. We sit on oil and gas, and they think that's just fine.

GARRELS: The overall global economic crisis laid bare long-standing problems at the plant, which produces outdated models which cannot compete with foreign imports. In one of Togliatti's many car showrooms, salesman Alexander Koblov says the plant needs to improve quality.

ALEXANDER KOBLOV: (Through translator) All too often, the doors don't close correctly and the plastic is poor, and, of course, we need new designs.

GARRELS: Sergei Tselikov, a leading industry analyst, says Putin approved new management in AvtoVAZ four years ago, but Tselikov says it's failed to come up with a long- term strategy to save either the plant or the city.

TSELIKOV: (Through translator) Management is not from the automobile industry, and there continues to be a huge turnover at the top. They're lurching month to month with no real plans for the future.

GARRELS: Once the pride of the Soviet Union, Togliatti is now shabby. Piotr Zolotariov, head of the local independent trade union, anticipates the situation will only get worse.

ZOLOTARIOV: (Through translator) The local government doesn't have taxes to repair roads, or fix the lights. There are problems with the water supply. The infrastructure is wearing out. We see much more crime, more drugs than ever before. The best and the brightest, who could save the city, are fleeing.

GARRELS: Analyst Tselikov estimates that for every job lost at the plant, another will be lost in town, bringing the total new unemployed to as many as 70,000. Officials hope public service jobs like street cleaning can cover some of these numbers, but most people don't see how the city can cope with this unprecedented crisis. Victoria Melnikov works at a clothing store.

VICTORIA MELNIKOV: (Through translator) Everyone is already feeling the effects of the pay cuts. And now everyone is wondering if they will have a job. My parents work at AvtoVAZ. If they lose their jobs, what will they live on? Nobody knows what's going on.

GARRELS: Anatoly Ivanov, a member of the city council, says the situation is potentially explosive.

ANATOLY IVANOV: (Through translator) Will there be strikes? Will there be violence? Will workers close the main highways like they did in Pikalyovo last summer? It's very possible it could reach that point, and then the security services are poised to stop this.

GARRELS: Management has yet to announce which workers will be let go, only saying the first to be cut would be those who are at or near pension age, 55 for women, 60 for men. Nikolai Chubenko moved here to build the plant in 1968. Now 60, he has no idea how he and his family will survive if he's among those cut.

NIKOLAI CHUBENKO: (Through translator) Some Russian economists say the crisis is over, but we see it's just beginning. Everyone is just waiting.

GARRELS: Anne Garrels, NPR News, Togliatti.

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