5 October, 2009The management reached an agreement with the union - 27,600 AvtoVAZ workers will lose their jobs before the end of the year. Management's original plan was to cut 36,000 jobs.
RUSSIA: AvtoVAZ management reached an agreement with IMF affiliate Automobile and Farm Machinery Workers' Union (AFM) - 27,600 AvtoVAZ workers will lose their jobs before the end of the year. Management's original plan was to cut 36,000 jobs. The plant employs 102,000 workers.
On September 14 cutting of 5,000 jobs was announced.
The administration's restructuring plan includes "one-shift work, 65 per cent operation rate, which will result in the annual production of 500,000 cars," (official news release).
The same news release states that 13,000 workers to be made redundant have reached retirement age and "will be paid all the compensations required by the collective agreement". Another 5,500 workers have reached preretirement age (53 years for women, 58 years for men). These workers are also in position to receive both state and corporate retirement benefits. Another 9,100 workers are still of the working age. An employment program was developed for them - they will be offered a job at the new Renault production line at the plant, which will supposedly open in 2012. Before that redundant workers will be offered temporary jobs in Togliatti.
AvtoVAZ is in a critical state now. Recession caused a 40 per cent drop in sales of Lada cars. According to the estimates of the management, annual losses in 2009 will reach 35 billion rubles ($ 1.1 billion). The restructuring plan includes drastic cuts in expenses and production rate.