From Lada the Car to Winnie the Pooh

Employees from AvtoVAZ – Russia’s biggest car company from Central Russia’s city of Togliatti – might soon be demoted to making toys, rather than cars, in an attempt to pull through the economic crisis.

These new measures to create jobs stem from the announcement that Avtovaz is planning to cut 5,000 jobs from the country’s largest car-manufacturing plants by December. Moreover, according to some reports, the company’s job losses could rise to a staggering 36,000.

Given the fact that, out of the 700,000 people who live in Togliatti, 100,000 are employed by the company, the consequences of such a dramatic job cut could have a devastating effect on the entire region.

The Ministry of Industry and Trade has come up with novel ways of trying to keep people in their jobs. They include: producing electric cars, bicycles and children’s toys – something very different from producing automobiles.

The representatives from the workforce have said that they see these latest plans as a direct insult to their car-making skills and were reportedly planning strikes against the possible job losses and these new suggestions in the next few days.

“This is humiliating,” said Pyotr Zolotaryov of the independent interregional trade union for the automobile industry. In his opinion, this is the way for Russia to lose more of its qualified specialists, Interfax reports.

On the contrary, the head of AvtoVAZ’s own trade union, Nikolay Karagin, insists that “any job opportunities in Togliatti are salutary for people.”

“The more jobs, the better. This is paramount,” Interfax quotes him as saying.

He also believes that Togliatti is still far from social turbulence.

Drastic measures are, obviously, needed to help save Russia’s flagging car industry. Unlike other areas of the economy which have shown signs of improvement, the car industry is still in the red, and not just in Russia, but all over the world.

Igor Shuvalov, Russia’s Deputy Prime Minister, provided his comments on this issue:

“Positive trends are clearly coming through in some sectors of the economy, while in others, unfortunately, things are not so good, and that includes the car industry. But taking into consideration all the anti-crisis efforts we've made, it's fair to say things are looking optimistic for the remainder of 2009.”

AvtoVAZ has suffered from major losses during the economic crisis, though the Russian car industry in general has long been struggling to stay afloat. Despite Shuvalov’s optimism, these latest initiatives may well mean that chassis and engines will be replaced by toys and teddies.