Yakunin sees no reason to cut RZD management
MOSCOW. Nov 23 (Interfax) - OJSC Russian Railways President Vladimir Yakunin does not consider the company's top management to be inflated and does not see any sense in cutting it.
"There is nothing easier than to say your administration is inflated, reduce it. There is one simple reply to that. First, the cost of maintaining the administration within the framework of the overall cost of the entire workforce. Our top managers get quite decent salaries, but if you look at the press, the salary for the president of one of Russia's biggest companies is in last place [Forbes put Yakunin at number 25 in a list of the 25 most expensive top managers in Russia with $4 million], he told the press in Moscow Friday.
Earlier the Economic Development Ministry, proposing a 7% increase in freight rail shipment tariffs in 2013 (these parameters have now been confirmed), said RZD would have to reduce its spending and possibly get rid of some staff to prevent losses. RZD Vice President Dmitry Shakhanov told Interfax that the company does not plan to cut staff. "The industry is being reformed with clear policy that corresponds to government resolutions. These changes do not indicate that there will be any cuts," he said, adding that there certainly would not be mass layoffs.
Yakunin said Friday that reforming the rail industry in Russia requires the establishment of new subdivisions. "Marketing, logistics, a new system of corporate governance, a vertically integrated rail transport system, economists, financiers, a fundamentally new system of personnel management, their motivation - this all requires professionally qualified experts to implement these functions," he said.
Yakunin said his assistants and he himself are working under "tremendous stress." The general number of central office staff has throughout the time of RZD's existence been declining, the company president said. "But we will create or reform some new subdivisions, giving them new functions," he said.
Yakunin considers calls to cut the company's administration without specific checks into efficiency to be unjustified. "Once again I refer to objective parameters characterizing RZD efficiency on foreign markets, - the rating levels that we obtain - who does that?" he said.
"The administration does that, supported by the production activity of all company workers. Even the most highly qualified, best quality worker on the railway cannot provide these ratings unless professionally qualified motivated [specialists] are at the helm of the company," he said.
Just in the last month the monopoly added several highly-placed employees. The appointment of Marina Chubkina as advisor to the RZD president was announced Wednesday. Chubkina was chief of staff of the Federal Special Construction Agency and worked in Defense Ministry structures since 2010.
In early November, RZD appointed a new vice president - Alexei Illarionov, who is in charge of IT. Earlier, when he headed the monopoly's information and corporate processes department, the manager said the company's IT budget at 18 billion rubles in 2012 was too low, adding that this increased technical risks.
RZD does have its technical issues. In the summer the company warned about disruptions on its website and problems with online ticket bookings. The monopoly attributed the glitches to "technical problems" without explaining what these were and recommended users "try later."
In early November Prime Minister Dmitry Medvedev instructed RZD to appoint another first vice president. Earlier sources in the transport industry told Interfax that this post might go to former Sverdlovsk region governor Alexander Misharin, who will be in charge of developing hi-speed rail travel.
In its recent quarterly report, RZD said that 1.25 billion rubles went on payments to management in January-September 2012 (333.6 million rubles in salaries and 920.04 million in bonuses), compared to 1.37 billion rubles for all of 2011.