AvtoVAZ Will Reduce Lada Workforce by Over 25%
Job cuts could be as high as 27,600
By Brendan Moore
The largest auto manufacturer in Russia, AvtoVaz, will layoff over 27,000 workers at its Lada plant, the company has announced.
Auto sales in the formerly red-hot Russian market have dropped 54% this year, from 3.2 million units to a forecasted 1.4 million units. Until the current economic meltdown, Russia was expected to become Europe’s No. 1 auto market this year, deposing Germany from that position. That development may now be years away for Russia, as the country has been particularly hard-hit by the economic turmoil in the world.
AvtoVAZ, partly owned by Renault, said this morning that it had reached agreement with the company’s trade unions to lay off 27,600 workers in the next thirty days. The plant has been running at 65% capacity for months.
The plant, located in the Italian-sounding city of Togliatti on the Volga River, churns out Ladas, and has been doing so since the Soviet Union was around. The plant was originally built with Fiat’s help and technical assistance in the 1960’s, as part of the Soviet Union’s master economic plan, which included auto manufacturing. The production facility currently employs around 102,000 people.
Workers at the plant are protesting, and are lobbying for the Russian government to step in and nationalize the Lada plant, but that scenario is very unlikely, although the Russian Deputy Prime Minister, Alexander Zhukov, is trying to put together an aid package for the company.
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