Yes, we have already written that AvtoVAZ suspended production due to overflowing warehouses and was forced to suspend car exports to Ukraine, although the company says that our market is not a priority for them.
And here are two new pieces of news from AvtoVAZ that may indicate both optimization of the company's structure and serious problems for the giant of the Russian auto industry.
AvtoVAZ's net loss for the first quarter of 2014 amounted to 2.95 billion rubles (more than 80 million dollars). Bo Andersson, the company's president, naturally remained dissatisfied with this result. In his opinion, this situation arose due to a high level of fixed costs, a drop in demand on the Russian (!) market, and revaluation of currency loans.
Reacting to the current situation, VAZ management developed a special cost reduction program.
Possibly as a result of the implementation of this program, VAZ and its subsidiaries are forced to reduce their workforce. As we have already written, VAZ stopped pilot production until the end of the month, as well as the assembly line for "Priora", and today it became known that layoffs have begun in AvtoVAZ's "daughters". Thus, in LLC "Lada Instrument" 278 people were laid off, and in LLC "AvtoVAZ PROO" - 575 people. In total, it was planned to cut one and a half thousand workers, but "thanks to the measures taken to optimize the number of personnel" only 850 people were laid off.
Sergei Zaitsev, head of the company's trade union, cites a decrease in the volume of orders as the main reason for the layoffs.
