Russia: Car industry in meltdown

Trade unions demand nationalization with workers’ control, and an alternative plan of production

Notwithstanding the forecast by the Russian Ministry of Finance that the country’s economic collapse was beginning to slow, the figures for the fall of GDP issued last week show the decline accelerating to 11%. New car sales in July were nearly 60% down from the similar period last year. Bearing the brunt of the collapse, as in other countries, has been the car industry. And it is suffering with a vengeance.

The giants of the home grown Russian car sector Avtovaz (maker of the Lada brand) and Kamaz (lorries) have shut for the whole of August. The multi-national car companies that have set up factories in Russia including Renault, GM, Nissan and Toyota have also laid-off their workforces. The Ford factory outside St. Petersburg shut down for three weeks. These lay-offs sparked a chain reaction. Suppliers are collapsing every day. In just one region, there are 47 suppliers making redundancies in August. The biggest manufacturer of car radios has been declared bankrupt. And the crisis is not a short term problem. The 100,000 workers at the Avtovaz plant in Tolliata have been told they will be only working half time (with half wages) from at least September to December. That means many workers will take home just 6000 rubles a month (125 euros) when flat rents and charges will consume about 5000! It is rumoured that the Avtovaz management are planning up to 30,000 redundancies.

The Russian government has been attempting to blame the crisis on poor management at Avtovaz, but the fact that this is so clearly part of an international car industry collapse has undermined their arguments. Many of the workers are blaming the way in which restructuring over the past few years has been conducted only in the interests of shareholders, while supplying no real new investment for improvements.

But, at the same, time, this crisis is proving to be a test for Russia’s newly developing trade unions. Not only do they have to lead resistance to the attacks of the bosses, but they are being challenged to come up with a programme that is capable of providing a long term solution to the crisis. Although the trade unions are still young, they are quickly gaining experience.

Since the collapse of the former Soviet Union, Russian workers have experienced an economic collapse which exceeded in depth that of the 1930s Great Depression. In the years 1990-4, the Russian economy collapsed by nearly 50%. The independent trade unions established as a result of the strikes against the former ruling bureaucracy, tied as they were to pro-market reforms, proved unable to meet the new challenges facing workers in capitalist Russia. Union membership and influence declined dramatically throughout the nineties. However, as the Russian economy started to grow and foreign multinationals began to invest by building assembly plants in the country, a new generation of independent trade unions developed.

This process is most marked in the car industry. A militant trade union first sprung up in the new Ford factory outside St Petersburg. A key factor in the fighting approach of the leadership was a visit made by its leader Aleksei Etmanov to Brazil, where he saw that the conditions of car workers there were significantly better than those on Russia. He also saw how trade unionists participated in political struggle. He participated, for example, in a meeting of the Brazilian left party, PSOL. Etmanov returned home determined to fight for better conditions in Russia.

Having set down the path of fighting trade unionism, Etmanov and his comrades have not only organised victorious strikes aimed at gaining better conditions, they have also met with resistance and repression from the bosses and state. Only recently, once again, Etmanov was attacked by thugs outside his home.

Gains won by the union at the Ford plant however gained an echo throughout the country. Already existing independent trade unions, joined by new workers’ organizations, merged around the Ford union to form the ‘Inter-regional Trade Union of the Auto industry’ (MPRA). Thousands have joined the new body and to join a trade union in Russia today demands sacrifice and resolve. Repression by both the bosses and the state is widespread. Several trade unionists have been assassinated or framed by the police and are now in prison.

Union federation’s programme

Now the union federation is facing a huge challenge. How to fight layoffs, redundancies and wage cuts in the crisis riven car industry? Under the influence of supporters of the CWI, who have a representative on the National Council of the MPRA, the union adopted some radical aspects to its programme in January, this year. While the whole programme includes references to the need for “social dialogue” – a legacy of the previous influence of Western trade union “advisors” – the statement blames the current crisis on the capitalist system of managing the world car industry.

The MPRA presents a 10 points anti-crisis programme, including calls for elements of workers’ control but also calls for forms of so-called ‘social partnership’. It calls for trade union control over any money given to the car industry and for managers to open all the factory books to the unions. Responsibility for the crisis should be borne by those who are guilty for the crisis. The company should reveal publically its profits and top managers’ salaries and these should be cut before any other cuts are made.

If redundancies are made from factories receiving state support, the management should be forced to pay those workers made redundant benefits equal to the average wage they earlier received. The state should guarantee credit and debt payments of all those made redundant.

Any company attempting to use the crisis to unjustly worsen the conditions of its workforce or that consistently ignores the labour code should be nationalized.

At each factory and at national level there should immediately be established an anti-crisis committee of the management, trade unions and representatives of the state. These committees should examine the situation and develop a programme of measures balancing the interests of all sides.

A national anti crisis plan should be developed and discussed at the tripartite commission.

With the aim of maintaining ‘social partnership’ during the crisis, the state should ensure that all trade union and labour laws are strictly observed and guarantee the rights of trade union action. All attempts to restrict trade union rights should be quickly rebuffed.

The development of the Russian car industry should meet the interests of the workers, guaranteeing them work and pay and the consumers by providing accessible and ecologically clean transport, using all the scientific and economic potential of the country.

The illusions in the statement concerning social partnership etc however have been quickly put to the test, as repression has been stepped up against the trade unions. In a recent, unpublished interview with a German reporter, Premier Putin is said to have attacked the MPRA, describing it as an “extremist trade union” and threatening to ‘deal’ with it. However rather than cowing the trade union, Alexei Etmanov and his comrades have come out fighting. They have opened the MPRA to unions other than those in the car industry, and they have announced an alliance with IG Metall, which could give it more international weight. But perhaps most importantly, Etmanov declared that trade unions can no longer restrict themselves to ‘economic struggles’, and, in doing so, he argued for the establishment of a “workers movement” to organise workers in political struggle.

August protests

It is against this background that the independent trade unions linked to the MPRA at Avtovaz organised recent protests. On 6 August, a week after being laid off (by Russian law you have to have 5 working days notice to call a meeting) the trade union called an open air meeting expecting 500 to turn up. But instead bbetween 2,000 and 3,000 attended with placards demonstrating their anger. A resolution was presented to the meeting based on the above anti-crisis programme but on this occasion there was no attempt to find ‘common ground’ with the bosses. In the preamble, the resolution stated: “a private owner is an ineffective owner, a private owner in a factory which dominates the town [Toliatti was built as a city to serve the AvtoVaz car plant] is not only irresponsible, it is socially dangerous, because they only think of their own financial interests – sucking out private profit for themselves”.

The meeting went on to demand the nationalisation of AvtoVaz, with no right to future privatisation, for workers’ control of the financial and economic affairs of the company and the development of a long-term plan for the development and support of the Russian car industry to ensure the production of modern, safe and competitive vehicles.

Of course, correspondents and opponents of the union are quick to point out that technically AvtoVaz is already “state owned”. In fact, 51% of the shares are owned by Rostechnology, one of the state corporations set up by then President Putin to increase state control over key sectors. However, this corporation is run purely as a state capitalist organisation in which all decisions are made in the interests of the shareholders (including the state). The companies are managed just as any other capitalist company would be run. Socialists therefore argue that nationalisation means the ending of shareholding, the state to take over the whole of the company and to guarantee the financing necessary to support it. Management decisions should not be made in the interests of increasing profit for the state, but, as the Avtovaz union states, in the interests of the workers and consumers.

Workers’ control and management is an essential feature of the nationalisation necessary to save jobs and conditions, linked to, as the trade union commented in one of its statements, to the ‘re-profiling’ of AvtoVaz for the production of vehicles needed by society, such as buses, minivans and fast trains.

When workers at AvtoVaz return to half time-half pay work in September, it is expected that further protests will take place, Now the question is whether the trade union can develop a clear strategy capable of mobilising the workers in struggle to save their jobs and wages.

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August 2009