MOSCOW, October 5 (RIA Novosti) - Russian Prime Minister Vladimir Putin pledged on Monday to save the country's largest carmaker AvtoVAZ from closure.
AvtoVAZ posted record losses of 14.2 billion rubles ($447 million) in January-June 2009 against net profits of 1.49 billion rubles ($47 million) in the same period of 2008.
"Unless efforts are made, the company...could simply leave the market and then cease to exist. We cannot let this happen," Putin said at a meeting with AvtoVAZ officials and shareholders.
He proposed establishing an engineering competence center and drafting financial rehabilitation and social development plans for the ailing company.
Putin expressed hope that AvtoVAZ workers who could be made redundant soon would get new jobs, including in the production of auto components, in the region.
As part of an anti-crisis program AvtoVAZ is expected to cut its employees by up to 27,600 to some 75,000 people. The company's press service said in late September that 13,000 people of pensionable age, some 5,500 of preretirement employees and 9,100 active workers were facing redundancy.
However, AvtoVAZ President Igor Komarov assured Putin on Monday that no serious redundancies among active employees were being planned.
First Deputy Prime Minister Igor Shuvalov will visit AvtoVAZ on Thursday to resolve the issues of restructuring the company.
Meanwhile, Putin said the government could shoulder part of the company's financial burden related to restructuring.
"Everybody can be sure that the Russian government will do its best to protect the interests of all [AvtoVAZ] shareholders," the premier said.
An AvtoVAZ top manager told Russian business daily Kommersant last week that the stakes of Russian Technology Corporation and Troika Dialog, which hold 25% each, could be diluted and that both companies have no objections, while Renault could retain its blocking stake of 25%, if it pays for AvtoVAZ's new share issue with its license for Logan cars and production-line equipment.
Christian Esteve, a member of the Renault Management Committee, told Putin on Monday his company wanted to remain a partner of AvtoVAZ.
AvtoVAZ has a production capacity of over 800,000 vehicles annually. It has made more than 25 million Lada cars since it was established in 1970 as a joint project with Italian carmaker Fiat. The company currently produces 15 models priced between 150,000 rubles ($4,800) and 350,000 rubles ($11,240).
