The factory here has been stamping out the same version of the Lada, the typical boxy people’s car of the former Eastern Bloc, for four decades.
Known as Avtovaz for short, it is one of the least efficient automobile factories anywhere in the world — each worker produces, on average, eight cars a year, compared with 36 cars a year at General Motors’ assembly line in Bowling Green, Ky., for example.
Yet the government is giving Avtovaz (pronounced aft-OV-az) billions of dollars in aid, no strings attached. No chief executive firings. No renegotiation of workers’ contracts. No demands to turn out better-quality cars, much less fuel-efficient hybrid cars. (The first car with an airbag was introduced here in 2005.)
But the auto bailout, Russian style, is intended more to ensure peace in the streets than restructure a business, much to the lament of some critics who think tough love might be better.
And what is the end result of these policies:
Now, the government is backing a no-layoff policy at Avtovaz, in spite of tumbling demand for its products. The government is also subsidizing auto loans to stimulate demand. The factory has requested state loan guarantees, which were approved last week.
Even employees forced to take furloughs seemed unconcerned about being laid off. “The factory is our wet nurse,” Denis N. Makarov, a clerk in the factory office, said. “We have nothing else. If it stops, the whole town will be out on the streets. We all understand this.”
Still, Timofey G. Bushuyev, 59, a sheet metal worker, said he understood the factory’s troubles last year when he bought a new Lada only to discover the horn and heater did not work and the belts squeaked.
In a possible silver lining for Avtovaz, more expensive foreign brands have fared worse. G.M., Hyundai and Toyota, all companies with assembly lines in Russia, were among the biggest losers.
So there you have it, a factory as wet nurse and cars nobody in their right mind would want to buy.
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