Renault receives ultimatum from Putin to fund AvtoVAZ

Article by Christian Andrei, on August 29, 2010

Everyone's waiting to see how French automaker Renault SA would respond to Russian Prime Minister Vladimir Putin's ultimatum to help Russian automaker AvtoVAZ or see its stake reduced. Putin said in front of government officials that Renault has to help fund the enterprise or its stakes would have to be divided.

It can be recalled that Renault had bought a quarter of the state-run firm for more than $1 billion a couple of years ago. Putin is putting his foot down for good reason.

AvtoVAZ, Russia's largest automaker, will implement the largest set of layoffs in a single Russian city and plans to cut a quarter of its staff (roughly 27,600 workers) in Togliatti.

The layoffs have become necessary due to the 44% decline in sales of AvtoVAZ's Lada. If this pushes through, Putin will have a difficult time trying to avoid unrest due to the recession that followed years of incredible growth, says Autonews.

If you don´t know much about AvtoVAZ, it's a Soviet-era company that continues to produce the clunky Lada models on outdated 1960s equipment. It stays afloat only due to decades of state money injections.

When Renault purchased the stake, there was a twinge of hope that it will finally be modernized. It's just too bad that the economic downturn delayed restructuring plans.

Topics: renault, russia, avtovaz

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
What is hotter and more menacing than a Hellcat? If we ask Dodge, its answer would be the “Demon.” Of course, we aren’t talking about a demon with horns and...
by - January 20, 2017
The 2018 model year could be an exciting year for fans and enthusiasts of the Chevrolet Corvette. This comes as the 2018 version of the Corvette is bound to feature...
by - January 19, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries