Wednesday July 1, 05:36 PM
Russia car maker GAZ to cut 7,000 jobs: official
MOSCOW (AFP) - GAZ, Russia's second-largest car producer, will cut 7,000 jobs this month, a top official in the manufacturer's Volga River base of Nizhny Novgorod said Wednesday, amid plummeting car sales.
"We had a meeting with the management of the factory.... They confirmed that from now to August 1, they will cut about 7,000 jobs," the region's Industry Minister Nikolai Satayev said, quoted by news agency Interfax.
The Russian car market, hailed as the world's fastest growing before the economic crisis, has shrunk by almost half this year.
GAZ chief executive Sergei Zanozin said he expected worse to come, hinting the indebted car manufacturer may be forced to shut several of its operations.
"There are no possible measures to stimulate the market. The measures taken by the government have so far yielded no results. This autumn the situation may get worse," he was cited by RIA Novosti as saying.
"On July 10, we will review GAZ's operations.... I don't rule out that part of its operations will be closed."
The legendary maker of the Soviet-model Volga has been promised four billion rubles (129 million dollars, 92 million euros) as part of government stop-gap funds to the hard-hit domestic auto industry -- struggling additionally to compete with the influx of foreign imports.
The Kremlin is also thought to be behind GAZ's apparently successful bid in May for a plan to purchase German car manufacturer Opel, a General Motors (NYSE: GM - news) unit, in consortium with Canadian auto parts maker Magna and Russian lender Sberbank.
Car sales in Russia plummet by 47 percent in the first five months of this year compared to the same period in 2008, according to the European Business Association.
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