Publication: Monitor Volume: 2 Issue: 219

Vladimir Kadannikov, who in January of this year replaced Anatoly Chubais as first deputy prime minister in charge of Russia’s economy, has returned to work at the Volga Auto Factory (VAZ). Until he joined the government, Kadannikov was director general of VAZ, Russia’s biggest car maker and the producer of Ladas and Zhigulis. Kadannikov’s subsequent departure from the government, in July, provoked a potentially divisive battle for control of the factory, which, for all its problems, remains a major Russian export earner and a vital contributor to the economy of the Volga region. Moscow financial circles wanted Kadannikov reinstated in his old job since Moscow had received a steady flow of funds from VAZ under Kadannikov’s management that ceased under his successor, Aleksei Nikolaev. But VAZ’s 110,000-strong workforce preferred Nikolaev’s management. When Kadannikov left for Moscow in January, VAZ workers had not been paid for three months. Nikolaev won their support by paying their wages on time. Moreover, the opinion of workers at VAZ counts because, under the terms by which the plant was privatized, the workforce owns 49 percent of the company’s equity. (Samarskoe obozrenie, November 4)

A compromise was reached last week during a meeting of VAZ shareholders at which Kadannikov was appointed chairman of the board of directors. (Itar-Tass, November 18) This is largely a figurehead post, lacking real power. Nikolaev remains in control in the twin posts of general director (that is, chief executive) and president of VAZ. The workers are pleased, and Kadannikov saves face. He may even be able to use his Moscow influence to help VAZ solve its huge debt problems (the plant owes the equivalent of hundreds of millions of dollars in unpaid taxes).

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