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Tuesday 22 November 2011
Mary Dejevsky: Russia Notebook, Part 2
The car plant, contradictions of a provincial city, corruption and poor infrastructure
THE CAR PLANT
At last, we are admitted to the grey metallic cavern that dominates the no less grey, flat landscape on the edge of Kaluga: the VW assembly plant. Parts are brought in from Germany and the Czech Republic by rail – a dedicated line runs behind the complex. For such a gigantic plant, it is a little surprising to learn than only 5,000 Russians work there, along with a few dozen German managers. Assembly is highly automated, with robots, and – in a nice touch – the long lanes where parts are stored have been given local names, apparently it helps workers to orientate themselves. One lane is Lenin Street, which indicates that – as in many provincial towns - post-Soviet regime change was not quite as complete as it was in, say, Moscow or St Petersburg.
They make VW Polos, which are especially adapted for the Russian market (cheaper, simpler and a bit more rugged), VW Tiguans, and two Skoda models, Fabia and Octavia. They are all sold in Russia (and have to be to comply with EU rules). The advertising slogan for the Tiguan is slightly risqué in Russian: “looks ordinary, but has a hot temperament”.
The plant is super-clean, even bigger than it looks from the outside, and dotted with exhortatory notices about how to wear your uniform (fastened to the neck, not flapping open, for instance), and keeping to the marked walking track. There’s a clinic and a cafeteria for workers, but – in a departure from Soviet practice - no nursery. Children under 12 are not allowed in at any time, except annual open days.
An interesting detail we learned is that, yes, of course, workers get a discount on new cars, but they cannot buy or take delivery of one direct from the plant. It has to go through the local sales office in Kaluga. I suspect this might have something to do with corruption, as well as standardising practice. It was common in Soviet times for cars to ‘disappear’ from the assembly line as they were completed. The discount varies, but was said to be about 10 – 15 per cent. Even so, the cars are expensive for Russians, especially those outside the capital, which seems to have caused a bit of resentment. (See below). Pay is the equivalent of $800 – $1,000 a month, which is good, but not excessive for provincial Russia. The average age of Russian employees is 30.
In a nice touch, any worker getting married can hire a VW Tuareg to drive around free for the day.
Car plants, it has to be said, are car plants. But it is surreal to be visiting this state-of-the-art plant seemingly plonked down in the vast flat waste of provincial Russia. VW is set to expand; an engine assembly plant is due to be added. It is also part of a “cluster” for automotive investment. Volvo has a plant on the other side of Kaluga, as does Nissan and Citroen. General Electric, Samsung and Nestle are also ensconced in the region, taking advantage of the region’s “non-stop shop” for investors, which undertakes to coordinate all the arrangements, from site, to infrastructure, to high-speed internet connections. You have an impression of the new gradually encroaching on and replacing the old, but it will be a very long time before even the worst of the old is completely gone.
CONTRADICTIONS OF A PROVINCIAL CITY – TALES OF A CHILD OF ‘PERESTROIKA’
A couple of us decide to skip lunch and ask for a taxi to go into the actual city – otherwise, we could imagine spending almost three days here without actually seeing the city at all. We are unbelievably fortunate in our driver.
Boris is a week short of 30, so a true child of Gorbachev’s perestroika. In the course of our drive, it transpires that he is a qualified state emergency worker, employed as a fireman, who drives a cab part time to eek out his wages ($800 equivalent a month).
He has a wife – who works in a car electronics assembly plant, and a seven year old child. He would like more children, and knows that the Russian government is keen to increase the birthrate, as the population is in sharp decline. But he doubts they can afford it. “There’s the pram, and all the other baby things, and then the nursery fees, and we only have a three-room flat” – which, it turns out, they got through his parents’ contacts. On their salaries, they can’t afford to move or to buy, and anyway, there is no new housing being built near the centre.
Boris drives us for an hour into the centre of Kaluga, around its periphery, across a big new bridge to mostly new residential developments on the right bank of the Oka river, giving a running commentary. As we are about to cross, you can just see a few remaining tumble-down wooden houses on the old city side. They are all that is left of the old residential quarter. Modern flats, civic facilities and shopping centres are taking over.
There’s a great deal of building going on, and restoring, but many areas still have ample potential for improvement. There’s a gigantic cement works, completely derelict, but just left to rot, almost adjoining the centre. The site apparently has to wait until someone wants to buy it, when demolition will begin. Public money is limited. There is an elegant ensemble of 19th century buildings, which has been restored, at least on the outside; it incorporates a triumphal arch. The biggest new building is a vast new building for the state savings bank, right in the city centre, which has been built uncomfortably close to a recently restored church.
There are plenty of relics of Soviet times. The eternal flame war memorial, a standard feature of Soviet cities, is still there, as is a monument to the Komsomol (the Soviet-era communist youth organisation). And the statue of Lenin stands – in taxi-hailing mode – as presumably it always did, in the square in front of the Communist Party headquarters – which is now, of course, the office of the regional Governor, Artamonov. It least he didn’t have to move when he switched from the party organisation to local government.
Otherwise, it’s a familiar scene to anyone who knows even a few Russian provincial cities. It reminds me in a lot of ways of Voronezh, where I – in common with many British students of Russian – spent my year abroad, on the British Council exchange. Commerce has arrived with a vengeance. In late Soviet times, the shops would have been few and far between, lacking colour and often bare. But you can see that it’s not a particularly rich town. There are decent small supermarkets, cafes and clothes stores, but also lots of phone-card operations and internet cafes.
Boris talks about politics. Will he vote in the elections next month. He doesn’t want to, but they have ways of encouraging you to, by ringing up and checking that you have been to vote on the day. But he’s pretty fed up with the powers that be. There were a lot of changes in the ranks of local officials 1990s, he says, that he remembers growing up, but in the last 10 years… well, it’s pretty much the same people in power. (Which, of course, is another way of looking at the stability that Putin is credited with bringing to Russia after the chaos of the previous two decades.) What he says chimes with the polling figures produced recently by a think-tank close to Putin, which has spoken of the “obsolescence of the brand” of current leaders, and growing cynicism and disenchantment with the system.
He says prices are going up and up, so that the family’s money doesn’t go as far. “Your pay packet can’t be eternally elastic.” He’s registered for a further qualification, as an external student at Voronezh University, in the hope of promotion. Like many Russians of his generation, he has also travelled – not to the West, because of the difficulties of obtaining a Schengen visa (everyone uses that expression, and usually with frustration). But he has been to Egypt, Turkey and to Thailand, which he liked best and where he stayed for a while, before he was married and had a child, working as a tour guide with Russian groups.
He also has views on the VW plant – reckoning that Russian workers are being paid far less than their European equivalents, so being used as cheap labour (his estimate of their pay is level is roughly in line with what we were told at the plant), and the prices are too high for locals to afford. “We expected the prices to be lower for local people, but they are Moscow prices, and we haven’t a chance of affording them.” That chimed with my glimpse of the cars in the VW workers car park, which were largely Russian.
During the afternoon there is more discussion of politics, focusing on the growing disillusionment on the part of the new middle class. Middle class, by the way, appears to have a rather fluid definition. One point made, by a member of the parliamentary opposition, is that the change of generations – anyone under 30 now will have no real memory or experience of anything before Gorbachev – may not actually bring any change in attitude at the top. In a neat expression, someone said: “the children are coming!”, and he listed the offspring of senior officials, at central and regional level, who have taken plum jobs in the past couple of years – to the great resentment of ordinary people. This could come back to bite United Russia at the ballot box.
The risk that the coming elections, including next year’s presidential election, could be seen as flawed, even if they are not, could mean, one opposition figure said, that the next president is regarded as a pretender – or “false Dmitry”, an allusion to the pretender who ruled during Russia’s Time of Troubles in the early 17th century, as retold in Pushkin’s Boris Godunov.
Corruption was another theme, with Russian analysts suggesting that it figured quite a way down the list of priorities to be addressed in the view of ordinary voters. This could be interpreted, they said, as evidence that it was less of a problem than foreigners often judged, or that it was so much a fact of life that they took it for granted until it reached even more oppressive proportions.
Someone else said that the size of bribes was going up, and argued that this reflected the greater risk of being caught and punished. (But could it also not be because people are richer?)
This was a recurrent theme on the Russian side, with the striking statistic that Russians make three times fewer car journeys than Americans. This could be explained by the harsh winters and lower car ownership, but also reflects the continuing lack of roads.
There was praise for Kaluga in using foreign investment to improve its infrastructure – “if this region can do it, so can others” – but also concern about de-industrialisation and de-skilling, as the new jobs offer assembly line work, not actual production, and there appear to be no Russian-originated industries coming on stream.
CAPITAL FLIGHT/INVESTMENT: another interesting statistic. Someone observed that if Russia could halt capital flight – which is estimated at $49bn in 2011 – this would render foreign investment – at $39bn - totally unnecessary. Though the question was also raised of how much Russian capital actually came back as inward investment from, say, Cyprus and Caribbean tax havens. Some also deplored a situation where politics effectively trumped the market, as wealthy individuals looked for political cover before investing. “The problem is that basic rules don’t exist.”
Russia, it was said, needs “six or seven major brands, not just Kalashnikov”.
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