Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Workers Picket Ministry to Protest Plant Sell-Off

Workers formed picket lines Monday outside the offices of the privatization ministry in central Moscow, protesting what they say is a management plot to deny them their legal rights to acquire shares in the firm.

Workers from the Kalibr instrumentation plant assembled outside the offices of the State Property Committee, Russia's privatization ministry, with placards accusing their director of breaching privatization law.

Although the dispute is unusual in that it has burst onto the streets, privatization officials say that it reflects a grievance that is common in many of the thousands of firms now being sold in Russia's sell-off of state assets.

The crucial issue in the dispute over Kalibr is the workers' right to choose a basic model of share distribution from the three options allowed under privatization law.

Workers said that Kaliber's director had tried without their approval to privatize the factory under the so-called "Option 1" that gives mostly non-voting shares to workers. But workers, who did not want to lose control over the enterprise, insisted that the firm adopt "Option 2" that allows workers to buy 51 percent of voting shares.

Privatization officials say that directors often try to prevent workers from gaining controlling blocks of shares in their factories, hoping that they can offer their firms to an outside investor in exchange for employment or a percentage of profits in the new enterprise.

When factories own attractive real estate or equipment, the directors can try to sell off the company's best assets to other companies they own.

Valery Nikolyukin, a member of the workers' council, said that something similar was happening in Kalibr's case.

"I think the director's team is trying to get rid of us," he said. "That way, no one will be able to stop them selling our factory to outside investors who will use our real estate and equipment for anything except instruments production."

Kaliber's management could not be contacted by phone Monday.

Larisa Chernyshova, an official with the State Property Committee who negotiated with the workers, said Monday that she had no evidence of wrongdoing on the part of the Kalibr director.

But she said that after the meeting with Kalibr workers Monday the State Property Committee had decided to withdraw the Kalibr privatization documents from its Moscow branch on the grounds that it was taking too long.

Chernyshova said that the State Property Committee had told workers it was ready to change the privatization option contained in the documents if that was the workers' decision. Nikolyukin of the workers council said that poor management had nearly ruined Kalibr over the past year and workers wanted new directors. He said that the factory had lost almost half of its 2,600 staff and the remaining workers have not been paid wages for three months.

"We make unique instruments, some of them hand-made. We do not want our company to be turned into a warehouse or something," said Nikolyukin.

Vyacheslav Lobusev, instrument department director at the state machine-building committee, said Monday that Kalibr's financial problems were common in an industry hit by low demand and a cut in the state credits and low demand. "I am not defending the Kalibr director, I just want to say that it is not only his fault," he said.

Lobusev said the Kalibr director pleaded for the state credits to pay workers for two month, but has not received any money.

Lobusev said that in late 80s the Soviet government had been heavily investing in upgrading the Kalibr, supplier of measurement instruments to all the Soviet republics, but said that after the breakup of the Soviet Union the factory faced a sharp decline in the demand for their production.