VZCZCXRO7099
RR RUEHDBU RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #4710/01 2681350
ZNR UUUUU ZZH
R 251350Z SEP 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 4142
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUEHVK/AMCONSUL VLADIVOSTOK 2428
RUEHYG/AMCONSUL YEKATERINBURG 2714
RUEHLN/AMCONSUL ST PETERSBURG 4547

UNCLAS SECTION 01 OF 02 MOSCOW 004710 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM RS
SUBJECT: Artyakov's Avtovaz Polices Shaped Popular Opinion of New 
Samara Governor 
 
REF: MOSCOW 04598 
 
MOSCOW 00004710  001.2 OF 002 
 
 
¶1. (SBU) SUMMARY: Popular opinion toward the newly appointed 
governor of Samara, Vladimir Artyakov, is likely to be shaped by 
perceptions of his policies while serving as general director of the 
region's largest industrial enterprise, Russian auto-manufacturer 
Avtovaz.  Artyakov fought to strengthen the company in the face of 
increased competition, but his decisions soured relations with many 
employees.  The more than 100,000 workers at Avtovaz have the 
potential to significantly impact the region's new political 
atmosphere with Artyakov as governor. Our discussions with 
journalists, regional political observers, and party leaders in 
Samara suggested that the ways in which Artyakov and his management 
team worked to reform Avtovaz, including a decision last spring to 
end "social welfare" payments to company employees, created a 
negative attitude toward Artyakov and what the locals see as his 
"Moscow" team. Other actors in the region are looking for ways to 
exploit that dissatisfaction for political gain, potentially 
complicating Artyakov's ability to achieve his goals as governor, 
including increasing the fortunes of the Kremlin-backed "United 
Russia" party in the December 2 Duma elections. END SUMMARY 
 
------------------------- 
Problems at Avtovaz 
------------------------- 
 
¶2. (SBU) Artyakov assumed the position of chairman of the board at 
Avtovaz in December 2005, after the company was purchased by 
Rosobornoneksport (the state-controlled military/industrial holding 
company).  The company has faced increasing competition from 
imported and domestically-produced foreign vehicles and according to 
Vedemosti (a Wall Street Journal affiliate), total vehicle sales 
fell 15% in the first half of 2007.  Workers claimed the United 
Russia party, of which Artyakov is a member, promised wage increases 
during local elections earlier this year.  Acting on these events, a 
small number of workers at the main plant in Togliatti held a strike 
on August 1 and demanded the company triple minimum wages to $1000 
per month.  Estimates conflict on how many workers participated in 
the several-hour strike, ranging from 150-1,000 workers.  Because 
only a small number of people stopped working, Avtovaz management 
did not recognize it as an official strike. 
 
¶3. (SBU) In rejecting the strikers' demands, Artyakov's team 
maintained that average wages were already the highest in the sector 
and tripling them would drive up vehicle prices, making the company 
even less competitive, and would force the plant to close.  They 
also claimed that the strike was an attempt to destabilize the plant 
during a period of corporate restructuring, playing up to those who 
didn't support the new reforms (a reduction of the work force by 
1.5% to increase efficiency).  The United Russia party admitted it 
pledged to raise wages, but over a five-year period and claimed to 
not have made any specific promises to Avtovaz workers. Some press 
reports link the strike to "Yedinstvo" ("Unity"), a small, 
unofficial, independent trade union representing fewer than 1,000 
out of the 110,000 total workers, although other interlocutors 
report that the strike was an "independent" action by disgruntled 
workers. (AvtoVAZ has an official, larger trade union, representing 
approximately 100,000 workers that did not support Yedinstvo's 
strike.  The official union insisted that wage negotiations with 
management were ongoing.  Nikolay Karagin, the official union's 
leader, warned Yedinstvo members that if they didn't follow the 
proper procedures under Russia's Labor Code, strikers could be 
dismissed.) 
 
---------------------------- 
Fodder for Regional Politics 
---------------------------- 
 
¶4. (SBU) Avtovaz management and a number of observers claim the 
strike was not about economics, but was rather a political 
manipulation during a local pre-election struggle. The director of 
Samara's "Just Russian" campaign Mikhail Sychev dismissed the strike 
as an effort by unspecified political parties (not SR, one assumes) 
to create a disturbance in the run-up to Duma elections. He 
characterized the pay issue as a long standing problem between the 
workforce and management and argued that the strike coincided with 
the peak of discord in a cyclical pattern of dynamic relations. He 
claimed that most of the workforce realized the strike had been a 
"mistake" and a non-constructive method for expressing grievances. 
Sychev underscored that the "Yedinstvo" union did not participate in 
the strike and asserted that his party organization had "good, 
constructive relations" with the independent union's leadership. 
 
¶5. (SBU) Sychev may have been disingenuous, at least about the role 
that SR played in encouraging the strike. Speculation in the 
national press suggests that Sychev's SR has the most to gain from 
promoting unrest at Avtovaz. Powerful local businessmen affiliated 
 
MOSCOW 00004710  002.2 OF 002 
 
 
with SR, including Vitaliy Ilyin (the head of the Samara city duma, 
connected to the largest distributor of Avtovaz spare parts, the SOK 
group) who had lost out from Artyakov's new polices may have been 
seeking some retribution. 
 
¶6. (SBU) The strike provided an opportunity for other political 
actors to win points with worker-voters by demonstrating solidarity 
with the workers against management. A rally in Togliatti on August 
11 by the Liberal Democratic Party of Russia (LDPR), ostensibly in 
support of the strikers, again demonstrated the political 
opportunism and clever populist instincts of the party's leader, 
Vladimir Zhirinovskiy. Further, the head of the "Yedinstvo" union 
Petr Zolotarev announced in August that he had plans to start his 
own party and potentially run for mayor. Both of those events 
deepened suspicions that the strike served the interests of a range 
of political forces. 
 
---------------------------------------- 
Regional Observers See Political Fallout 
---------------------------------------- 
 
¶7. (SBU) The chief editor of the regional edition of Novaya Gazeta, 
Sergey Kurt-Adzhiev, claimed that the way in which the Avtovaz 
management team made and implemented decisions undermined popular 
attitudes and would likely shape perceptions of Artyakov as 
governor. Whereas the previous management of Avtovaz had largely 
comprised local businessmen, most of whom were essentially "Red 
Managers" from the Soviet period, the new Artyakov team had been 
primary Moscow-based and distant from Samara society, according to 
Kurt-Adzhiev. He said that the locals had jokingly termed the new 
managers "desiantniki" (Russian term for paratroopers) because they 
flew to Samara on Monday for work and then jetted back to Moscow 
when the week had ended. 
 
¶8. (SBU) Ekho Moskvy's Tatyana Prokopavichene said that the decision 
to cut a host of "social support" financing that the factory had 
traditionally supplied the workforce -- money for schools, special 
medical units, housing subsidies, and other non-salary benefits -- 
had created the perception that Artyakov and his team did not care 
about the workers' interests. According to Prokopavichene, the loss 
of subsidies was a substantial blow to the living standards of the 
Avtovaz work force, particularly since the municipal government was 
unable (or unwilling) to help make up the difference.  She said that 
Mayor Nikolay Utkin of Togliatti spoke out against the decision, 
saying that it was "not right" that the company simply abandoned its 
responsibilities.  Kurt-Adzhiev opined that the decision to suspend 
the subsidies was particularly galling to many in Togliatti, because 
Artyakov and others from Avtovaz/Rosoboroneksport only recently had 
been elected to the oblast duma on a platform that the workers 
believed had promised increases in pensions and worker salaries. 
 
¶9. (SBU) The way in which the Avtovaz management dealt with the 
August strike also negatively affected popular perceptions of 
Artyakov and his leadership team in the governor's office, according 
to our Samara contacts. Ivan Mironov, then the Avtovaz vice 
president and security director, was the only member of senior 
management to address the striking workers. "Yedinstvo" activist 
Anton Vichkunin said that Mironov promised that he would arrange a 
meeting between the workers and Artyakov and assured the strikers 
that none would suffer negative consequences if they ended their 
protest, according Vedemosti.  However, none of those promises were 
kept. Kurt-Adzhiev and Prokopavichene claimed that about half of the 
workers involved in the unsanctioned strike had lost their jobs, 
with many of the remaining strikers under indictment for 
"extremism." Lydumila Kuzmina of the NGO "Golos" reported that some 
of the strike participants have faced police harassment.  They claim 
that the rest of the workforce now is cowed and afraid, certain that 
a new round of layoffs is imminent.  However, union officials in 
Moscow do not share the same concerns as our Samara interlocutors 
and claim that they have not heard of any firings or harassment. 
 
¶10. (SBU) COMMENT: Artyakov's history as Avtovaz chief will likely 
complicate his ability to achieve what many see as his primary 
purpose: serving as a regional "locomotive" to bolster the United 
Russia's standing in the December 2 Duma elections. (According to 
polling by the Fund for Societal Opinion, support for United Russia 
is comparatively low, at 31 percent in Samara Oblast.) Putin's 
decision to appoint Artyakov as governor likely resulted from 
broader political calculations related to upcoming elections and the 
Kremlin's agenda of breaking the power of regional elites, (REFTEL) 
but seems to mesh poorly with popular attitudes within Samara 
oblast. END COMMENT.