OAO AvtoVAZ, the Russian automaker 25 percent-owned by Renault SA, plans to cut 10 percent of its workforce, as it disposes of non-automotive activities, Chief Executive Officer Igor Komarov said.
"The cuts will be achieved by the end of next year through asset spinoffs and optimizing production," Komarov said in an interview in Paris today.
AvtoVAZ, Renault and Nissan Motor Co., in which the French carmaker owns a 43 percent stake, are trimming costs as they prepare to assemble new models on a shared production line in AvtoVAZ's headquarters city of Togliatti, southern Russia. The 7,000 job cuts follow the Russian carmaker's reduction of its workforce to 70,000 from 102,000 a year ago.
Workers at AvtoVAZ employed in activities that aren't essential to the company's strategy -- including social and other support services -- are being progressively transferred outside the company to new Russian state-backed employers.
The transfers account for the "vast majority" of the 7,000 planned job cuts, with the rest achieved through retirements and without compulsory firings, Renault spokeswoman Axelle de Ladonchamps said.
AvtoVAZ, Renault and Nissan have urged the Russian government to abolish customs exemptions that allow foreign makers of auto parts to escape import duties, said Christian Esteve, Renault's top executive in Russia, who sits on the AvtoVAZ board.
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