Ford's Russian Joint Venture to Cut Third of Jobs as Sales Fall

Ford's Russian Joint Venture to Cut Third of Jobs as Sales Fall

SAINT PETERSBURG -- Falling sales is the reason that Ford's Russian  joint venture will eliminate a third of its staff at its factory outside the northwestern city of Saint Petersburg.

 "We confirm that we will reduce our workforce in the Saint Petersburg plant by about 700 positions," a spokeswoman for Ford-Sollers said.

The plant in Vsevolozhsk on the outskirts of Russia's second largest city employs around 2,000 people assembling cars and commercial vehicles.

"We hope to achieve this through voluntary means," the spokeswoman added.

"The rapid and significant depreciation of the ruble, falling industry sales, and a consumer shift away from compact cars, where the Ford brand is a leader in Russia, are the main factors driving the actions," the statement said.

The announcement came after Russia's main carmaker, Avtovaz, which makes Lada cars, announced in January that it was cutting 10% of its workforce this year, or around 7,500 jobs.

After years of spectacular growth, the Russian car market -- which is the second largest in Europe after Germany's -- contracted sharply in 2013.

Russia's car sales fell 5.5% due to the economic slowdown, according to figures from the Association of European Businesses.

Russian carmakers are pessimistic, with several predicting that car sales will fall around 1.6% this year as the overall economy stagnates.

Ford-Sollers said it will also change the production schedule at its other factory in Yelabuga in Tatarstan in central Russia to make it more efficient.

Igor Temchenko, the leader of a trade union at the Vsevolozhsk factory,  said that the workers "intend to protest,, without giving any details.

The trade union movement remains weak in Russia.

Copyright Agence France-Presse, 2014

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