VEB Considers Buying $1.4Bln AvtoVAZ Stake
Vneshekonombank is considering buying up to 40 billion rubles ($1.4 billion) worth of AvtoVAZ shares, Vladimir Dmitriyev, the state-owned bank’s chief, said Thursday.
“Such a topic exists, it’s under discussion,” Dmitriyev said.
Also under discussion is the degree to which French carmaker Renault will be participating in the ailing plant.
Renault “is confirming that they are ready to make serious investment into AvtoVAZ development — to invest in modern technologies that will be evaluated in a transparent way … and then either added to company assets or provided to the company in a different way,” said First Deputy Prime Minister Igor Shuvalov, who visited the plant Thursday. The technology would be used to develop new models, including Renault cars, he said, Interfax reported.
But Yedinstvo, the AvtoVAZ union, has come out against a plan to produce Renault automobiles at the Russian carmaker’s plant in Tolyatti because it will cause layoffs across the country, the organization said in a press release Thursday.
“Their [Renault’s] goals are obvious. They want to lower the production at AvtoVAZ and use the factories to manufacture cars using foreign components. This means that tomorrow, not only AvtoVAZ factory workers, but parts suppliers throughout the country will lose their jobs,” the statement said.
AvtoVAZ announced last month that it would like to lay off 27,600 workers — nearly a quarter of its work force — as demand for its cars withered in 2009. The layoffs could have been avoided, the union said.
“We’re not convinced that mass layoffs are necessary to save AvtoVAZ,” the statement said. “We don’t agree that the only way to save the enterprise and the city is to fire workers, scale down production and switch over to the assembly of morally outdated foreign models.”
The government should create new jobs and give autoworkers the training to perform them, the union said.
“Only then can the restructuring of AvtoVAZ be carried out,” the union said.
Shuvalov called the 27,600 layoff figure “a lie.” “Nobody would allow for such a decision to be made only by AvtoVAZ management,” he said, adding that laid-off pensioners and those approaching pension age would get a job, presumably with a “subsidiary of AvtoVAZ financed by the federal government, among other sources,” Shuvalov said.