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Russian auto boomtown grinds to halt over Ukraine sanctions

Thousands of auto workers have been furloughed and food prices are soaring as Western sanctions pummel the small Russian city of Kaluga and its flagship foreign carmakers, with more sanctions likely to come. The Kaluga region, 190 kilometers (120 miles) southwest of Moscow, says it has attracted more than 1.3 trillion roubles ($15 billion) in investment, mostly foreign, since 2006. But Western sanctions imposed in recent weeks after Russia sent tens of thousands of troops into Ukraine have exacerbated lingering component shortages and halted production at two flagship car plants, Germany's Volkswagen and Sweden's Volvo. A third, the PSMA Rus plant that is a joint venture between Stellantis and Mitsubishi and employs 2,000, may halt production soon due to a lack of parts, Stellantis' chief executive said last Thursday. "It is not clear what will happen. They don't give us any concrete information," said Pavel Terpugov, a welder at the PSMA Rus plant. Terpugov said he needs twice as much money to buy groceries than before the sanctions. Analysts have forecast Russian inflation could soar to 24% this year, while the economy may shrink to 2009 levels. The United States and Europe are weighing more sanctions against Russia after Ukraine accused Russian forces of civilian killings in northern Ukraine, where a mass grave was found in Bucha, outside Kyiv. Russia calls its actions in Ukraine a "special operation" and the Kremlin categorically denied any accusations related to the murder of civilians, including in Bucha. One source of hope for some in Kaluga, with its 325,000 residents, is the West may be reluctant to hurt its own companies. "Does it make sense to impose sanctions on its own plant and lose money?" said Valery Uglov, an auto mechanic at the Volkswagen plant. "Does it make sense to lose the Russian market?" "We hope to return to work as soon as possible and everyone will have confidence in the future again," Uglov said. Volkswagen, whose factory employs 4,200 people, in early March suspended operations. A spokeswoman said production remained frozen. Volvo Group, which employs over 600 people to build trucks, also suspended production. Even before the sanctions, Russian car sales had contracted from 2.8 million units from when the Volkswagen factory opened in 2007 to 1.67 million units last year, damaged by both sanctions after the 2014 annexation of Crimea and the COVID-19 pandemic.

UAW tactics called into question at VW's TN plant

The United Auto Workers is in hot water with some of the very workers it is trying to unionize at Volkswagen's Chattanooga assembly plant. According to The Tennessean, eight Volkswagen factory workers have filed complaints against the UAW with the National Labor Relations Board, claiming the union "misled or coerced" them into formally asking for union representation.
The UAW has instituted a major push at the Chattanooga plant to represent the 2,500 hourly laborers that build the VW Passat by using what's called a card-check process. The tactic is opposed by the National Right to Work Legal Defense foundation, the group representing the workers. The card-check process demands that a company recognize a union that obtains the signatures of more than half its workforce, according to The Tennessean. This tactic is in contrast to the more traditional route, which sees employees vote on union representation.
The workers filing the complaint claim that the UAW told them the cards merely called for a secret ballot, rather than an outright demand for union representation. Workers also allege that the UAW has made it overly difficult to reclaim their signed cards, some of which were signed so long ago that they have been rendered invalid. Although the cards can force a company's hand, federal law still allows the company to ask for a secret ballot before yielding to unionized workers.

2015 VW Passat Limited Edition priced from $23,995*

Volkswagen is doing some rearranging of its lineup for the Passat sedan, ditching a pair of trims on the entry level, 1.8-liter, turbocharged four-cylinder and replacing them with a new Limited Edition trim level. Gone are the Wolfsburg and SE trims from model year 2014, which rung up at $24,375 and $26,280, respectively. The new Limited Edition will start at $23,995, not including $820 in destination charging. According to VW, the new trim level packages $2,755 of extras over the base Passat S, but only demands an extra $1,555 of cash. Not a bad bargain, particularly as the Limited Edition adds some desirable features. An intelligent key with push-button start, 17-inch alloy wheels, a rear-view camera, heated leatherette seats with power controls on the driver's side and a touchscreen radio with an eight-speaker stereo, along with a few lesser options, like fog lights, chrome window trim and a leather-wrapped steering wheel. Beyond the new list of standard equipment, this is still the same competent German sedan. The 1.8-liter, turbocharged four-cylinder is paired up with a smooth shifting six-speed automatic, as with other trim levels. Check out VW's press release on the new Passat Limited Edition, available below. VOLKSWAGEN RELEASES PRICING ON 2015 PASSAT LIMITED EDITION MODEL Mar 6, 2015 Passat Limited Edition model starts at $23,995 Fuel-efficient 1.8-liter TSI® engine and six-speed automatic transmission standard Value-laden model has a host of standard features, including KESSY® keyless access with push-button start, V-tex leatherette seating surfaces, heatable front seats,17-inch aluminum-alloy wheels, touchscreen radio and rearview camera Herndon, VA – Volkswagen of America, Inc., today, announced pricing on the 2015 Passat Limited Edition model. The Limited Edition model will have a starting MSRP of $23,995 (plus transportation) and supersedes the Wolfsburg and SE models from the current model year. The new Limited Edition model offers a great value: compared with the automatic transmission S model, it has $2,755 of additional equipment, but costs just $1,555 more.