July 29, 2009

Top Russian automaker making big cuts

Avtovaz, Russia's biggest car maker, may lay off nearly 28,000 workers and make 59 percent fewer vehicles this year than last, a Russian news agency reported.

A source told Interfax Tuesday Avtovaz will produce 332,000 cars in 2009. However, Interfax said an Avtovaz spokesman would not confirm or deny the figures, The Moscow Times said.

The automaker had said previously this month it would suspend all production Aug. 1 for one month to clear out some of its stockpile of vehicles.

The New York Times reported Avtovaz executives were considering the massive layoffs because the company's inefficient factory has experienced a sharp drop in demand for its Lada cars.

The U.S. newspaper said Interfax reported 27,691 jobs were at risk of being eliminated but that radio station Echo of Moscow reported a company representative said the cuts were only a contingency if sales did not pick up. The Times said it could not reach company spokesmen for comment.

Avtovaz has about 103,000 employees.