Today’s New York Times article by Andrew Kramer, “Russian Auto Bailout Protects Jobs (Efficiency Not So Much)” (Tuesday April 7, 2009) chronicles the Russian governments efforts to prop up employment in automobile manufacturing including the Lada (Avtovaz) factory in Tolyatti. The Russian government is giving billions of dollars, no strings attached, in an effort to subsidize employment in a facility that has a wretched productivity - each worker producing on average 8 cars a year as opposed to 36 cars a year per worker at GM in Bowling Green, Kentucky. At the same time, as identified in the World Bank’s trade protection (reported in Elisa Gamberoni and Richard Newfarmer’s “Trade Protection: Incipient but Worrisome Trends“) list, Russia in the fall imposed a tariff on imported cars. The collapse in automobile demand in Russia has come later than the United States, according to the Times article, but it could be more severe. And the Russian government is now supporting a no-layoff policy.
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