25 Sep 2009

Thousands of Russian car workers lose jobs

11:34 am on 25 September 2009

Russia's largest carmaker, Avtovaz, is to cut up to 27,600 jobs as it tries to cope with the global slump in demand.

The BBC reports the job cuts are more than a quarter of the 102,000-strong workforce at the company, which makes Lada cars.

Reports had suggested that 36,000 job losses were considered, but the company said that it managed to "significantly lower the initial figure".

Russia had the fastest growing car market in Europe until the financial crisis hit demand.

Sales have dropped 40% this year. In April, the company was on the verge of bankruptcy, and survived only after Prime Minister Vladimir Putin stepped in with rescue package.

Avtovaz, which is 25%-owned by French automaker Renault, had imposed month-long production freezes while it tried to reduce levels of its unsold stock.

No cars were built in August and the plant will work two weeks in four from September to February, which meant that the workers will have to survive for six months on half pay of $US300.