“The plants have been put up for sale, but…” 760 people leave Ford Sollers

Production conservation

Ford Sollers left the commercial vehicle market of Russia by the end of June by focusing on the commercially successful car production — over 55 modifications of Ford Transit. A restructured joint venture began its operation in the Yelabuga plant on 1 July.

The production of commercial Ford Fiesta and Ford EcoSport cars in the Naberezhnye Chelny plant and engines in that of Yelabuga stopped. According to Press Secretary of Ford Sollers Tatarstan Indira Salimgarayeva, a part of the workers who stayed in the enterprise are servicing and conserving the equipment, maintaining the enterprise: “The production stopped, but a part of the employees remained to work. I can’t name the exact number because the process is underway. A part of the employees began to be transferred to the updated joint enterprise of Ford Sollers in Yelabuga in Alabuga SEZ on 1 July (where Ford Explorer and Ford Kuga used to be made and the production of Transit remained), the other part of the employees remained to maintain the equipment and conserve.”

She says that as soon as the equipment and production conservation completely ends, the rest of the employees will also leave. But at the moment it is unknown when this will happen.

From 5 to 12 basic salaries

The restructuring required the company to lay off about 1,000 employees of which about 850 worked in the Chelny factory. At the briefing last Thursday, official representative of the Kazan Kremlin Liliya Galimova commented on the employment issue of Ford workers. She said that apart from the voluntary separation programme in which, in accordance with the law, the enterprise is obliged to pay the employees compensation of 5,5-12 basic salaries, there is an employment programme, in which Ford JV assumed social responsibility.

“The majority of people have been employed and transferred,” Galimova said but didn’t go into details concerning the companies that hired the laid-off workers. She told Realnoe Vremya that 760 workers were laid off with compensation.

According to Galimova, the workers won’t remain unemployed — there is a lack of specialists in many Tatarstan enterprises. The government of Tatarstan created options to provide KAMAZ Master in Kama Industrial Park with highly qualified staff where there is a need for specialists.

Compensation is paid depending on the period of service: if a person has worked in the company for 5 years, he gets the minimum pay — 5,5 basic salary. If the service is more than 10 years, consequently, it is 10-11 basic salaries. Those who have a service period over 15 years are going to get 12 basic salaries. However, considering that the factory was launched in 2008, the latter group of the enterprise’s workers doesn’t exist. The newspaper’s interlocutor didn’t reveal the number of employees working in the updated enterprise.

Restructuring costs

The decision of the board of directors of Sollers PJSC on purchase of 51% of the authorised capital of Ford Sollers Netherlands B.V. from the American corporation was published on an information revelation website on 27 June. The cost of the deal is $75 million. The Federal Anti-Monopoly Service, as it is said on the service’s website, approved the deal, as the deal was designed for the reorientation of Ford’s business in Russia, while the share of the company in the commercial transport market segment isn't going to change.

Since the enterprise managed to pay the multi-billion debt to VEB.RF, the plants which stopped production will be sold at auction. Officials of the enterprises said about the payoff of the debt at the SPIEF for the first time. Head of VEB Igor Shuvalov also confirmed the information (the state corporation granted the enterprise 39 billion rubles for development in 2011).

Earlier, Ford said that in case of restructuring, they would have to pay $200 million, the majority of which was going to be used to pay the workers compensation and terminate contracts with suppliers. “As not all the employees have been laid off — we are laying them off in stages — it is clear not all of them have got this money. In other words, a part of them has got the money, a part continues getting it, the other part will get the money a bit later when it quits.”

Salimgarayeva didn’t comment on the settlement of accounts with suppliers due to a trade secret.

Sale of plants

As Realnoe Vremya wrote, Deputy Director General of Sollers PJSC Zoya Kaika told journalists that the talks on sale were underway. According to her, the American side was holding the talks, this is why she didn’t comment on the candidates for the purchase. At that moment, they haven’t reached an agreement.

It became known in late June that the plants would be put up for sale. Particularly head of the Ministry of Industry and Trade of Russia Denis Manturov said about it: “Ford has fully paid off its debt in Naberezhnye Chelny and Vsevolozhsk to Vnesheconombank, this is why these Ford plants will be sold at auction,” the mass media cite him. The minister didn’t comment on possible bidders.

“Yes, the plants have been put up for sale, but the talks are held now only with the interested companies. We can’t reveal their names now, it is our confidential information. But the talks are held,” Salimgarayeva confirmed. The experts surveyed by Finanz.ru said that Hyundai and Volkswagen might be candidates for the purchase, while the value of the plants won’t exceed 3-4 billion rubles, mainly because of the situation with commercial vehicles that have shown the greatest fall in the last two years.

Realnoe Vremya has sent a request to KAMAZ’s press service about the employed workers. It will be published as soon as we receive the reply.