AvtoVAZ threatens layoff of 27,000 people

According to those present at an AvtoVAZ suppliers’ meeting today, Russia’s largest carmaker may lay off almost a quarter of its employees, Vzglyad newspaper reports. That information was attributed to AvtoVAZ executive vice president Igor Komarov. Samara Region Governor Vladimir Artyakov was also present at that meeting.

Of 110,000 employees, 27,691 are to be affected. The Unity labor union, which represents the auto workers, stated that it will not strike in response to the move, but it will increase the demands it will present at a rally already scheduled for August 6.

A source at AvtoVAZ later emphasized to RIA Novosti that the layoff is not yet firmly planned, but “the potential development of the situation” was described, in the event that sales do not pick up. Last week, Samara Region officials approved a plan to close down the plant’s assembly lines in August, while paying workers two-thirds of their wages. In September, the workweek will be shortened without compensation to the workers.

The company now has an estimated backlog of 80,000-90,000 unsold vehicles. The European Business Association recently announced that the company’s sales had fallen 151,020 cars in the first five months of the year, down 45 percent as compared to the same period last year.

AvtoVAZ, maker of the Lada, has a capacity of 800,000 cars per year.