Sunday, 13 December 2009

Workers wary of Avtovaz retraining

Avtovaz said it will demand that 12,000 workers resign and be rehired by subsidiaries, prompting the plant's independent union to blast restructuring plans as lacking proper guarantees, while business analysts said they did not go far enough.
Russia's largest carmaker has set aside 5 billion roubles ($170 million) to create two subsidiaries, with the former employees to be transferred to the new entities. There are, however, no guarantees that once the workers have resigned they will be offered the new jobs, the plant's union says.
"The workers don't know anything - how much they will be paid, what kind of work it would be, what kind of contract it would be," said Pyotr Zolotaryov, leader of the Yedinstvo, or Unity, trade union. "And they tell the workers to sign an application for quitting when they don't even know what will follow."
In a statement, Avtovaz said last week that 12,000 people who are not in demand for car manufacturing would be able to accept positions in the new companies, to be named Avtovaz-Prospect and Reforming Centre.
"The wages of workers of these affiliated societies will remain at a level not lower than at their former work," the statement said. "More than 7,000 people will be able to find a job without any changes in their position, trade or wages."
Not all of the redundant staff will be able to go straight back to work though, with some 4,000 being sent for retraining. While on the training scheme, the students will be kept on full pay and be offered a new position after a six-month course, Avtovaz said.
Zolotaryov said the workers were highly skeptical they would all keep their jobs.
"No one trusts the employers, as they cannot sufficiently explain matters to us," said Zolotaryov. "There have been explanations, but of only a very shady sort."
In its statement, Avtovaz also promised to carry out "modernisation, installation, readjustment and commissioning of equipment" and "a major overhaul of buildings and constructions", among other improvements.
The changes are the first steps in the restructuring the company following its deal with Renault as it struggles to cope with falling car sales and mounting debts amid the crisis.
Employees at the firm's plants returned to full-time working on Dec. 1, after three months of having pay and hours slashed by half.
The restructuring plans were criticized by analysts as inadequate, however.
"This is just one of many steps that need to be done," said Anna Kupriyanova, an auto industry analyst at Uralsib. "I don't think this will allow the company to become profitable."
Kupriyanova said the decision to retrain the workers was "strange", as demand for the firm's cars would not recover quickly enough to justify its huge payroll. She added that Avtovaz needed to become more efficient through better technology.
"They need to make a major cost-cutting reconstruction of the business which demands strong decisions," she said by telephone. "To me, it doesn't look like the state is prepared to make these decisions, like cutting 40 per cent of the work force."
The government last week promised an additional 50 billion roubles ($1.7 billion) in aid to Avtovaz, which will come with 300 million euros ($450 million) from Renault.
In his annual call-in show on Nov. 3, Prime Minister Vladimir Putin said the government may provide a further bailout package for Avtovaz to help it restructure.
This is in addition to 4.5 billion roubles ($155 million) dished out to those made unemployed by the automaker.
Unemployment has become one of the government's top concerns, particularly in single-industry cities such as Tolyatti, where most people depend on Avtovaz for their livelihood in one way or other.

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