Kremlin's limo-maker on road to oblivion

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AS OMINOUS for Russia's future as the din of tanks six months ago on Kalinin Bridge in the middle of Moscow is the menacing noise heard this week a few miles to the south- east on Autofactory Street.

Along a grubby avenue flanked by a foundry, mud- caked workshops and a sports complex with smashed windows echoes a sound never heard before in Moscow's Proletariat District: silence.

Zil - flagship of Soviet industry, pioneer of post-Soviet privatisation and maker of Kremlin limousines and kolkhoz trucks no matter who is in charge - has ground to a halt. Assembly lines have shut down, chimneys have stopped belching and some 60,000 workers have been sent on forced holiday at two-thirds pay.

It is a familiar drama, shared, according to the state statistics committee, by 5,000 other factories since the start of the year.

Across Russia, industry is seizing up, storing up explosive problems for the future. Few firms have gone bankrupt and few workers have got the sack. The official jobless rate is 1.5 per cent. But, as workers at Zil, the Kristall vodka plant and thousands of other enterprises know, having a job no longer means having work.

Autofactory Street, normally swirling with smoke and noise, is now eerily empty. The only activity yesterday was a team of street-sweepers sent to chip away the last chunks of black ice left by winter.

At Zil's prison-like main entrance 18 turnstiles stand idle. The only visitors are staff from the refrigerator division, the one part of the conglomerate still working, and Pavel Ostakovich, an assembly-worker for 28 years, who turned up for work as he had done since the age of 16. He had just returned from a real holiday and had not been told about the mandatory leave.

According to figures released this week, Russia's slump is far more severe than anything endured during the Great Depression. Tight credit has helped ward off hyper-inflation but the consequences are calamitous. Output fell by a quarter in the first three months of the year compared with the same period in 1993.

The political shock of Russia's economic collapse has already been felt in the triumph of Vladimir Zhirinovsky's thumb-in-your-eye nationalism and a burst of support for Communists.

A grey marble wall at Zil's main entrance gives a hint of what may be next. A fringe Marxist group, the Communist Workers Party of Russia, has pasted up charts explaining the difference between capitalism and socialism. The Interior Ministry has put up signs inviting job applications from disgruntled car workers interested in police work (and offering starting salaries 50 per cent higher than at Zil).

Worker's Moscow, one of the most militant anti-reform groups, rails against 'bankers, speculators and the criminal bourgeoisie' and calls on workers to seize back their assets. There are also a few stanzas from 'My Dear Capital', an angry new poem by Sergei Mikhalkov, octogenarian author of the lyrics to Stalin's national anthem.

Zil's main trade union is organising a protest rally next week at the White House, the former parliament building blasted into submission last October and now headquarters for the cabinet. But Sergei Gerasimenko, deputy boss of the union, admits workers have little leverage: 'How can we go on strike? They want us to stop working. Nothing would please management more than a strike.'

Zil is not closed for good. Its inventory of unsold trucks will shrink, customers will cough up some of the pounds 40m they owe and Zil will start up again, perhaps next week. But even the good news is grim: there will only be a single shift instead of three, and salaries, which even when paid in full, are on average a third less than a national norm of 150,000 roubles ( pounds 55).

(Photograph omitted)

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