Togliatti has around 700,000 residents, the AvtoVAZ plant employs over 100,000 people; but now AvtoVAZ is in the process of shedding 20,000 jobs and that has Togliatti in a spin. Workers at the AvtoVAZ plant are warning of strikes and public protests if the company goes through with the layoffs and that prospect has officials in Moscow - never a fan of mass protests - worried.
Auto sales in Russia are projected to plunge by up to 50% this year in the wake of the ongoing financial recession. In an effort to bolster the domestic car industry, Prime Minister Vladimir Putin slapped a 50% tariff on foreign-made cars sold in Russia. That move sparked a wave of protests last December in Russia's Far East port of Vladivostok, where there was a thriving cottage industry in buying used cars in Japan and reselling them across Russia. Many Russians preferred to buy used Japanese cars rather than new Russian domestic ones, claiming the quality of the used foreign models exceeded that of the new home-built ones.
And that gets to what critics say is AvtoVAZ's bigger problem - that they are stuck in the Soviet past, their factory is inefficient and unable to compete with more modern automobile manufacturing plants. While other auto manufacturers rely on sub-contractors to supply many of the myriad of parts that go into building a car, AvtoVAZ has a sprawling complex that covers hundreds of acres and churns out most of what's needed to assemble a Lada - an inefficient way of doing things, critics say.
Meanwhile, layoffs loom for AvtoVAZ and Togliatti wonders what will happen next.
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