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Cablegate: Ford Workers End Strike

VZCZCXRO4070
RR RUEHLN RUEHVK RUEHYG
DE RUEHMO #5844 3520429
ZNR UUUUU ZZH
R 180429Z DEC 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 5893
INFO RUEHLN/AMCONSUL ST PETERSBURG 4711
RUEHVK/AMCONSUL VLADIVOSTOK 2572
RUEHYG/AMCONSUL YEKATERINBURG 2909
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS MOSCOW 005844

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ELAB RS SOCI
SUBJECT: FORD WORKERS END STRIKE

REF: A. MOSCOW 5314
B. MOSCOW 4710
C. ST.PETERSBURG 271

---------------------------------------
Strike Ends and Full Production Resumes
---------------------------------------

1. (SBU) Summary. Workers at Ford Motor Co.'s plant near
St. Petersburg ended a four-week strike today after
management promised further negotiations on a new labor
contract, including wage increases and a reduction of the
night shift (reftel a). According to press reports, Ford
management has stated that new wage increases would
compensate for inflation -- expected to reach 11 percent by
the end of this year -- by a "large margin." End Summary.

2. (SBU) On Friday, Ford management agreed to discuss a new
2008 labor contract, including wage talks, if full production
resumed today. Union leader Aleksey Etmanov confirmed that a
timetable for discussions had been agreed on and called union
members back to work on all three shifts starting at midnight
on Sunday the 16th. The plant had been operating on a single
shift since November 28 and on two shifts since December 10.
Etmanov also reported that management had agreed that no
workers would be disciplined or discriminated against because
of their participation in the strike.

----------
Background
----------

3. (SBU) Ford workers held a one-day strike on November 7
and warned of a permanent strike on November 20 if their
demands were not met (reftel a). Subsequent negotiations
failed and workers began the strike on November 20. The
union has asked for a new labor contract that includes basic
monthly wage increases from the current level of 19,000
rubles to up to 28,000 rubles ($770 to $1,140) and a
reduction of night shift hours (reftel a).

-------
Comment
-------

4. (SBU) An increasing number of labor conflicts this year
have highlighted workers' demands for a larger share of the
country's strong economic growth in the form of higher wages,
particularly amid rising inflation (reftel b, c). Unions have
also wanted to draw attention to labor laws they perceive as
anti-union (reftel c). Managers of foreign investments in
Northwest Russia have told us they feared foreign firms could
be targeted by such strikes because unions expected fairer
treatment there than at 100 percent Russian-owned companies.
Investors admitted that workers had a negotiating advantage
in this tight labor market, but noted that demands for
"unreasonable" wage increases could quickly erode the
region's competitive advantages. End comment.

5. (SBU) This cable was coordinated with St. Petersburg.
BURNS

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