Togliatti’s Avtovaz woes typify monotowns plight
The government says the move’s part of a plan to diversify the country's dying single-industry cities.
With $2.6 billion debts, and its plant running at a third of capacity, Avtovaz needs significant layoffs to survive. But when two million work at the giant Togliatti factory, its dealers and suppliers, job cuts hurt practically every family in the region.
The government’s solution is to give early pensions to 15,000 of the plant’s 100,000 staff. Another 13,000 must switch to a mysterious organisation financed by the state. Avtovaz Mechanic, Vyacheslav Semenov has little idea of what is in store.
“I don’t know what we’ll be doing in this new company. We just got these letters calling us to a resettlement commission.”
The letters are a model of ambiguity. Employees are asked to join a firm with the Orwellian name “Reforming Centre”. It promises a stable salary and free training, but doesn’t say what they’ll actually do. The Vice President of Avtovaz Human Resources, Dmitry Mikhalenko revealed these skilled workers will “paint premises and clean floors”. If they refuse to move, they can be fired.
“We’re cutting the workforce to 71,000. The salaries of those who leave will be paid by the government.”
Togliatti’s one of four hundred so-called ‘mono-towns’ throughout Russia where a single industry employs most of the population. Their dangers became clear last April in Pikalevo, south of St. Petersburg. When a slump in metals prices closed the town’s aluminium factory, desperate workers blocked a motorway.
Vladimir Putin flew in and forced owners to re-open the plant. Russian megabank Troika Dialog owns a quarter of Avtovaz. Managing Director, Pavel Teplukhin, says the government should now organise resettlement of mono-town residents.
“Something should be done to move people out of there to more pleasant places to live. And some special task force should be set up. I believe it should be empowered with the necessary financial and administrative resources.”
The Ministry of Regional Development’s already relocated residents of 2 mono-towns in Russia’s North. It adds 17 others are on the edge and could “blow up at any time”, while 280 more should draw up urgent rescue plans to get state funding.