In Russia's Detroit, layoffs are blamed on foreign interlopers

Wed Apr 27, 2016 2:25am EDT
 
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By Gleb Stolyarov

TOGLIATTI, Russia (Reuters) - In the heartland of Russia's struggling car-making industry, people blame foreigners for their economic hardship, not their country's rulers.

The Volga river city of Togliatti is the nearest there is to a Russian version of Detroit, and it was hit hard when Russia's economy slowed down, aggravated by a fall in global oil prices and Western sanctions over Russia's role in the Ukraine crisis.

Russian consumers responded to the slowdown by cutting their biggest item of discretionary spending, and for most people that meant putting off buying a new car; a body blow for a city where car-making underpins the local economy.

Thousands of staff at Avtovaz (AVAZ.MM: Quote), the company that dominates the city about 1,000 km (600 miles) southeast of Moscow, lost their jobs, and a web of businesses that depend on the auto industry saw their revenues drop.

Residents share an opinion about who is to blame: the Renault-Nissan alliance which holds a controlling stake in Avtovaz, and the foreign managers the owners hired.

"The company's foreign owners are doing nothing to protect the workers," local member of parliament Leonid Kalashnikov wrote in an election pamphlet. "It's not surprising that today Togliatti is on the very brink of a social explosion."

Avtovaz declined to comment on accusations that it was damaging the domestic auto industry or mistreating workers.

  Continued...

 
A view shows an entrance to the plant of carmaker AvtoVAZ in the city of Togliatti, Russia, in this February 24, 2016 file photo.  REUTERS/Gleb Stolyarov