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Russian Labor Raises Its Voice


A walkout at a Ford plant near St. Petersburg may herald a new era of union activism

Despite what its propagandists might have had you believe, the old Soviet Union wasn't much of a workers' paradise. Strikes were crimes against the state, and trade unions did little to benefit the proletariat. Even in post-Communist times, Russian workers haven't really organized, and strikes have been rare. But a walkout at Ford Motor's (F) St. Petersburg plant may herald a new era of labor activism.

In recent months, an increasingly vocal and self-confident Russian labor movement has emerged. St. Petersburg's dockworkers and drivers for that city's branch of the Russian national postal service both briefly walked off their jobs this fall. In the spring, workers at a Coca-Cola (KO) bottling plant in St. Petersburg picketed for higher wages, and unions called for a work slowdown at the local Heineken brewery, though the company says the protest had little effect.

Why now? In many respects Russian workers have never been better off, with average real wages rising at a double-digit pace since 2000. But inflation is expected to hit 11% this year, and the oil-fueled economic boom has made for a tight job market, increasing labor's muscle. With ever more wealth on show, meanwhile, workers have higher expectations. "They see that profits are rising, managers' pay is rising, but wages aren't rising to compensate for inflation," says Karin Kleman, head of the Institute for Collective Action, a pro-union think tank in Moscow.

The biggest action to date is at Ford. Workers at the factory making Focus sedans have been on strike since Nov. 20, demanding pay hikes of up to 35%. Ford Russia Chief Executive Theo Streit issued a statement calling the union's demands "excessive and unrealistic," but said he's open to talks if the workers call off the strike. While the factory's average monthly wage of $800 is 60% higher than the national norm, it's "mere kopecks" compared with Ford's Russian sales, says union boss Alexei Etmanov. "They pay us like inhabitants of the Third World, and we build a high-quality car that makes good profits," he says.

Etmanov is part of a generation of grassroots activists who are breathing new life into Russian trade unionism. The 34-year-old welder bypassed a national labor group affiliated with the ruling party to found the Ford union. He convinced two-thirds of the factory's workers to join it, then spearheaded a series of industrial actions that have led to the establishment of chapters in other major auto plants.

The reaction to the new labor activism is mixed. Nearly 40% of Russians disapprove of unions, compared with 22% who approve of them (the balance had no opinion), according to the Russia Public Opinion Research Center. Companies, meanwhile, have done what they can to rein in unions. Automaker AvtoVAZ and oil company Surgutneftegaz, for instance, have fired labor activists, saying the workers hadn't done their jobs. Unions are contesting the dismissals.

Ford has so far been easier on strikers. A one-day walkout in February, for instance, led to a pay increase of 14%-20% and more holidays. It's not by chance that the new activism has coincided with the arrival of big foreign investors such as Ford. They're being targeted, says Evgeny Reyzman, a labor lawyer at Baker & McKenzie in Moscow, because Russian employers are more likely to crack down on union activism. "They're taking advantage of the fact," Reyzman says, "that [foreign] companies are law-abiding."

Bush is BusinessWeek's Moscow bureau chief .

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