AvtoVAZ’s survival is the stuff of legend – but it’s been achieved at a cost. Much of the sprawling Togliatti plant is still as it was when it was built. But there are encouraging signs, as Mark Bursa discovers.
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It’s not every day that you see a nuclear submarine standing in a field, next to a Cold War-era Tupolev bomber. But it’s not every day you visit a place like this. Welcome to Togliatti, Russia’s ‘Motor City’, the home of AvtoVAZ.
If there are a few ghosts of the Soviet Union in this town, it’s hardly surprising. Togliatti could be a living memorial to Communist Central Planning. It is, after all, a gigantic car factory, with a town attached.
When Togliatti was conceived in the 1960s, the area was, literally, all fields. The USSR wanted a globally competitive car industry, and decided it would build its flagship factory there – 1,000 km south-east of Moscow, on the banks of the River Volga. In fact the V in VAZ stands for Volga; and AZ stands for Avto Zavod – the Auto Factory on the Volga – and the river was crucial to the plant, giving waterway access to Russia’s main populated areas, and to exports via the Black Sea.
To build the facility, the Soviets did a deal with Fiat. Italy has had its fair share of Communist influence in its various governments down the years, and therefore was more amenable to doing deals behind the Iron Curtain than many other automakers – hence contemporary Fiat-built plants in Poland and Yugoslavia as well as in Russia.
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By GlobalDataIndeed, the Italian connection accounts for the town’s curiously un-Russian name. Palmiro Togliatti was the leader of the Italian Communist Party from 1927 until his death – on holiday in Russia, ironically – in 1964. He was instrumental in brokering the deal with Fiat, and the plant, and its attached town, was named in his honour.
The Italian connection explains why the first Lada 2101 car that rolled off the line at the plant was basically a licence-built Fiat 124. This was an advanced car for its day, and represented a major step up from the other mainstream Russian cars of the time – quirky Moskvich and Zaphorozhets models.
That first Lada is still at Togliatti – which brings us neatly back to the submarine and the Tupolev. Across the road from the sprawling car plant is the local museum, home to an extraordinary collection of Cold War military hardware. Various MiG and Sukhoi jets stand alongside steam locomotives and unfeasibly large helicopters. And remember those impressive missile launchers that used to trundle past Brezhnev and his Polit Bureau cronies in the May Day parade of Soviet military might? Yep, they’ve got some of those there too.
And at the back of the collection, there’s a small building containing the history of AvtoVAZ. Prototypes, milestone cars and Moscow Show concepts sit there, gathering dust. While AvtoVAZ may have struggled to maintain quality levels since the fall of the regime that bankrolled its first two decades, there’s a history here of innovation and creativity. Turning round AvtoVAZ may be a big job, but here is the evidence that the talent pool is there.
That turnaround job falls not to Fiat but to Renault, which gazumped Fiat’s bid to move back in to the company this February. Renault is probably the only automaker with a better track record than Fiat in the Emerging Markets. And it has the very relevant recent experience of revitalising Romania’s Dacia; the turnaround of the Pitesti plant between 2001 and 2007 has been highly impressive. We’ll have a bit of that, AvtoVAZ’s owners must have thought.
But Togliatti is not Pitsesti. It’s an order of magnitude bigger. The sheer scale of the factory complex is something else. From the 24th floor of AvtoVAZ’s head office tower, it stretches off into the horizon. Indeed, unfettered by planning restrictions, AvtoVAZ’s original planners took the concept of the ‘production line’ quite literally – it’s a straight line, more than 1.5km long, and covering an area of 875,000sq m.
A lot of the plant hasn’t changed much since it opened. Not only is AvtoVAZ’s history preserved in the museum – it’s alive and well in the factory. Inside the main building, there are three production tracks, producing all three generations of Ladas. On line 1 is the 1980s Samara; on line 3 the various incarnations of the 1990s 110 family; and between the two is the good old ‘Zhiguli’, the Fiat 124-based sedan that Lada has built since 1970.
Showing the international media these older parts of the factory was a pretty brave thing to do. This is a working environment that is a long way from achieving the health and safety standards that we’re accustomed to in the west. The atmosphere is heavy with fumes; the floor is oily; the lighting is dingy. The enormous stamping shop is Dante’s hell, filmed by David Lynch. Some of the Soviet-era machinery would be better off over the road in the museum, with the submarine and the helicopters.
Even so, the line is reliable, says AvtoVAZ executive vice-president of operations Yann Vincent. “The equipment is very old, but it is very well maintained.” That’s a big job – there are more than 195km of overhead conveyor lines in the main assembly line.
Togliatti has a level of vertical integration that would be unthinkable today. There are a few independent suppliers outside the factory’s perimeter – Federal Mogul is one – but many of these are more recent additions, mainly to serve the AvtoVAZ-GM operation that builds the Chevrolet Niva in a separate building at Togliatti.
But most bits of a Lada car are made on-site, from engine castings to dashboards, to seats, brakes, suspension systems and small stampings. The mechanical assembly division – which incorporates all the in-house drivetrain manufacture, covers 520,000 sq m and employs around 20,000 workers, making 300 different types of component.
There has been some recent investment – there are some new stamping presses, and a surprising number of robots in the body shop. And the plastics shop is modern, having been built in 1995. But the main three-track production line is basically as Fiat intended; an overhead conveyor system, with doors-on assembly. Not a robot in sight – just lots of workers. AvtoVAZ employs 105,000 workers directly, including 75,000 production workers. An astonishing 22,000 people work in the main assembly building.
Renault quickly brightened up Pitesti by cleaning the grime from the roof lights and giving everything a lick of whitewash. At Togliatti, not only is the plant bigger, it’s in a far worse state. And the degree of vertical integration that has allowed it to carry on churning out Ladas through Russia’s troubled recent past could be something of a millstone going forward. Does AvtoVAZ really need to do its own castings, or tooling, for example?
AvtoVAZ deputy CEO Sergey Tselikov admits this is a problem. “Being a full-cycle plant was an advantage in the past – but now we see it as a disadvantage that has hampered the development of independent components manufacturers.” Even the relatively efficient plastics shop is an anomaly says Vincent. “Most OEMs, including Renault, don’t have an in-house plastics facility. Are we better off keeping this in-house or outsourcing? It’s a tricky issue.”
Back at the plant tour, we’re enjoying the fresh air at the end of the main line. But AvtoVAZ has a party trick for us. Just when you think Renault faces a grim and grimy task of insurmountable proportions, we’re ushered off to a newer blue-painted building in the shadow of the central tower. Inside the blue building is the production line for the newest Lada model, the Kalina. We’ve seen the past – now here’s the future.
This line was built only four years ago to build the B-segment model, which comes in three body flavours – 5-door hatchback, 5-door wagon and four-door sedan. Kalina looks like an early-‘90s Opel Corsa; indeed, many believe it’s part of the GM-AvtoVAZ deal that builds the Chevrolet Niva SUV. It isn’t; in fact Kalina is 100% AvtoVAZ. The design pre-dates the GM deal, having been shown as a concept at the 1999 Moscow Show. That concept is in the museum shed, by the way, along with the prototypes for the Chevy Niva – another car designed by AvtoVAZ before the partnership.
The Kalina line is an eye-opener. It’s clean and modern, and absolutely state-of-the-art. Instead of the clanking overhead conveyor, cars move smoothly down the line on a floor conveyor, with bodies mounted on height-adjustable skillets until they need to be worked on underneath. It’s a computer-sequenced, doors-off line, and it’s every bit as good as anything you’ll find in the west.
Indeed, the only noticeable difference is the lack of robots where you might expect them – fitting dashboards and windscreens. Labour is cheap still in Togliatti – Kalina dashboards are yomped into place by a couple of burly Russian blokes instead. This is proof that even without a partner, AvtoVAZ was on the right track. The task for Renault will be to bring the rest of the plant up to this standard. That will be some task. It’s taken the best part of a decade to upgrade Pitesti to an acceptable standard. It might take longer to fix Togliatti.
Mark ‘Coolbear’ Bursa
