YASNOGORSK, RUSSIA—Three decades ago, the Yasnogorsk Machine-building Factory stamped out thousands of pounds of steel and iron into parts for wagons, pumps and locomotives for Russia`s mining industry.
Now two-thirds of its stamping and welding machines have been shut down. The old Soviet-era equipment is rusting, and fewer than 280 employees clock in every day - from a peak of 7,000. The factory that kept this town alive since the days of the czar is on its last breath, the victim of a global recession that has shaken Russia to the core.
Yasnogorsk is one of about 500 communities across Russia built around a single company, whose very existence hangs by a delicate thread. The challenges such "monocities" face are compounded by the legacy of the Soviet era, as well as deep-rooted Russian traditions that make it hard to start over somewhere else.
"What`s happening in our town is not capitalism," said Alexander Gorbachev, a 59-year-old mechanic previously employed at the factory, who now works at a small machine shop.
To help keep food on the table, Gorbachev (unrelated to the former Soviet leader) does what millions of Russians did during earlier times of trouble: He grows his own potatoes, beets and other vegetables and sells the rest at the market. "It`s like we`re in medieval times again."
Russia`s unemployment has risen to 8.3 percent, and industrial output declined by more than 14 percent in the first seven months of the year compared with 2008.
In Gus Khrustalny, 100 miles north of Moscow, workers at the local decorative glass factory were paid with the crystal vases they made because the company had no money.
In April, workers in a tungsten fabrication plant in the Primorye region staged a hunger strike after they weren`t paid for months. And in Yasnogorsk, factory employees estimate they are collectively owed about 6 million rubles ($200,000) in back wages.
These towns all saw their peak in the Soviet era, when a few plants would produce, say, all the Soviet Union`s tires. The whole system lurched along guided by a massive bureaucracy of central planners rather than market forces.
But in 1991, after 70 years of Soviet rule, the huge, clanking structure collapsed. Some factories simply closed their doors. Others were purchased for a pittance by a generation of future young billionaires, now called oligarchs, who milked them for profits rather than investing in them.
"We`ve seen that all those factories that were privatized eventually went bankrupt," said Nikolai Medvedev, 55, who has worked at the Yasnogorsk plant for more than 30 years, sharpening metal parts. "The management is bad, because the owners who buy the factories don`t really care about Russia. Their souls are in the West."
Many Russian industries have benefited from the privatizations, with more efficient companies that offer employees competitive wages. But others have been unprofitable for decades and are still simply limping along.
In Yasnogorsk, the factor