"Niva", First Russian Chevy Due in September

December 7, 2001

Sacramento - While a Russian cosmonaut sits among American astronauts in the space shuttle Endeavour after being launched from the Kennedy Space Center yesterday, other American engineers are sitting amongst Russian engineers designing what will become the first jointly-made passenger vehicle between Russians and Americans, the Chevrolet Niva.

General Motors announced yesterday that it plans to have the four-wheel drive vehicle in dealer showrooms by next September. It will be built at the AvtoVAZ Togliatti plant where Russians have been building Lada cars for years. The plant was designed, built, and financed by Italy's Fiat in 1970 to make what was already then an outdated vehicle, the Fiat 124. Models sold in the Soviet Union were sold as the Zhiguli, those exported were sold as the Lada.

In international terms, the car was a failure, requiring 110,000 employees to build 600,000 vehicles a year. It was built with substandard materials. As already noted, the design for the vehicle was outdated before the factory was built. And Togliatti was one of the least likely places to build an automobile factory. A city with a population of 700,000, many of its inhabitants were starving with food in the 1970s being rationed. The workers at the plant were poorly paid, many were only offered part time employment to avoid paying them benefits. The workforce was largely alienated by management, while drunkenness, embezzlement, absenteeism and eventually resentment toward the company became serious problems.

Are things any better today? Not much. There were improvements made to the plant in the late 1980s. After the fall of the Soviet Union the Russian mafia became involved in operations and everything was run for cash with nothing being reinvested back into the business.

General Motors thinks it can help change all of that. It has invested $100 million into the venture and the European Bank for Economic Construction is investing another $40 million, plus a loan of $92 million. Employee training will be a major issue as will be keeping the crooks and thieves out. If G.M. is successful at developing a new vehicle under these conditions and selling it for the equivalent of $8,000, it will have set a precedent that many other car companies will follow. And the precedent for this may be the fact that a Russian is riding with Americans to the moon in the most high tech vehicle this country has ever built. Evidence, that some things can change.