Medvedev Warms Up At GM Plant Opening

RIA-NovostiMedvedev signing an autograph as Beyrle looks on at the opening of a General Motors factory in St. Petersburg.
ST. PETERSBURG — After including a chilly, anti-American message in his state-of-the-nation address Wednesday, President Dmitry Medvedev was on hand to offer a warm welcome Friday as U.S. automaker General Motors officially opened a new plant in St. Petersburg.

Medvedev used the event, which was also attended by U.S. Ambassador John Beyrle, to talk about doing business with the United States.

"This is a great example of investment cooperation between Russia and the United States," Medvedev said at the ceremony, wishing the Detroit-based company good luck.

Beyrle emphasized the same theme of Russia-U.S. cooperation.

"We are both unwell because of the financial crisis, but we can improve the situation by working together," Beyrle said.

Called the "godfather" of the plant by St. Petersburg Governor Valentina Matviyenko during the event for his early involvement in the project, Medvedev talked about taking part in the groundbreaking ceremony for the plant as first deputy prime minister in 2006.

"I was given a shovel as a souvenir, which I still keep at my dacha with other gardening tools," Medvedev, a St. Petersburg native, said before inspecting the interior of a Chevy Captiva midsize SUV presumably right off the assembly line.

The ribbon-cutting ceremony came on the same day that GM announced year-to-date operating losses of $4.2 billion in posting its third quarter results. The company is currently lobbying the U.S. government for a bailout to help it avoid bankruptcy.

Despite a fall in global sales of 11 percent for the first nine months of the year, GM has moved into first place among foreign manufacturers in Russia, where its sales rose by 44 percent over the same period, almost double the 23 percent growth across the country's automotive industry.

Jazz music greeted guests at the plant in the suburb of Shushary, where GM Europe president Carl-Peter Forster and the company's president for Russia, Chris Gubbey, reiterated their commitment to Russia.

"We remain bullish and dedicated to Russia," Forster said before the ceremony.

The plant will eventually employ 1,700 people and has the capacity to produce 70,000 vehicles per year, starting out with the Captiva and the Opel Antara, also a midsize SUV. It will add the Chevrolet Cruze compact to production in 2009.

"There is a lot of room inside and around the plant to expand," Gubbey said. "We will watch the market, bring new models here and stay flexible."

He said he was confident that demand for SUVs would remain strong despite a drying up of consumer loans tied to the current credit crunch.

"It's a big country, and there will still be demand for off-road capabilities," Gubbey said.

Shushary, in the south of St. Petersburg, has been labeled the "Russian Detroit" in recent years as a number of foreign carmakers have established a presence there. Toyota opened a production facility just across the road last year, and a shiny lot full of brand-new Camry sedans is visible from the windows of the GM plant, symbolic of the global competition between the two companies.

Nissan, Suzuki and Hyundai are also scheduled to launch production nearby next year.

The Shushary location adds to GM's existing capacity of 100,000 vehicles per year in the country, from joint ventures at Kaliningrad's Avtotor and Tolyatti's GM-AvtoVaz plants. The new plant is fully owned by the company.

"It wouldn't be possible without the flexible and unbureaucratic support of the St. Petersburg government," said Gubbey, who moved to head GM Russia in the beginning of the year from GM's Chinese unit. "In China, there is also strong government support, but a foreign investor cannot own more than 50 percent of the plant."

In a gesture of thanks, GM Europe president Forster presented Matviyenko with a huge basket of flowers.

"This is a Russian-American handshake," she said. "Your Chevrolets and Opels will be selling like hot cakes."