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. Last Updated: 07/27/2016

AvtoVAZ Workers Plan Salary Protest

AvtoVAZ workers will hold a demonstration Aug. 6, five days after Russia’s biggest carmaker suspends production for a month, to protest against pay cuts of 50 percent that the company plans in response to slumping sales.

Wages for AvtoVAZ’s 110,000 employees will be slashed by half when the Tolyatti-based manufacturer resumes operations in September as it scales back work hours, Pyotr Zolotarev, head of the independent Unity labor union at the carmaker, said in a phone interview. Average monthly pay at the plant is 12,000 rubles ($386), he said.

“The salary cuts will be absolutely devastating for the local economy,” Zolotarev said Friday.

AvtoVAZ announced plans on June 24 to operate one production shift of eight hours a day, five days a week through February to reduce spending. Alexander Shmygov, an AvtoVAZ spokesman, said by phone Friday that the cutbacks, which include reducing individuals’ weekly work times by 50 percent to 20 hours, allow the carmaker to save money without eliminating jobs.

Russian sales of cars and light commercial vehicles dropped 49 percent to 763,962 in the first half of 2009 as rising unemployment, a devalued ruble and inflation reduced disposable income, according to the Association of European Businesses. Deliveries of AvtoVAZ’s Lada models fell 44 percent.

AvtoVAZ won’t build any Ladas in August, the company said July 22. The suspension is part of an effort to cut the company’s 85,000-vehicle inventory in half, Shmygov said Friday.

The carmaker is 25 percent owned by Renault, France’s second-biggest carmaker, and has a separate venture with General Motors to make Chevrolet Niva sport-utility vehicles. The GM-AvtoVAZ plant isn’t affected by the August shutdown.

Russia may face outbreaks of labor unrest as manufacturing slumps at a record pace and companies struggle to pay employees, the Higher School of Economics said July 6.