Global crisis aside, foreign carmakers flock to Russia

By Fred Weir   Correspondent with The Christian Science Monitor

No ‘Rust Belt’ in sight at Russia’s ‘Little Detroit.’

People are starting to call this central Russian industrial town “Little Detroit.” Unlike its American namesake, the car factories here are not only still working, but they’re going forward with ambitious expansion plans.

Russia already has a home-grown auto industry, but the new factories are distancing themselves from the clunky Soviet days – meaning experienced Russian auto workers need not apply. Wages are even less than those at auto plants in Eastern Europe, but the sour economy is resulting in an abundance of eager labor.

Amid Russia’s skyrocketing interest rates, plunging ruble, and rising unemployment, Kaluga is proving to be a rare bright spot.

A two-year old Volkswagen plant just outside Kaluga, which assembles Passat and Jetta sedans for Russia’s fledgling middle class, has slashed weekly shifts in half, though it has not yet laid-off any workers.