‘Jubilee despite a loss’: KAMAZ to celebrate 50th anniversary without massive lay-offs

Oleg Afanasyev: “We have no anti-crisis plans”

Before the meeting, which was held in Naberezhnye Chelny in the restaurant of Open City Hotel, we asked the head of the press service of KAMAZ Oleg Afanasyev whether the company has an anti-crisis plan and how it intends, if it does at all, to respond to today's challenges in general. Let us remind that the net loss of KAMAZ PJSC for the first 9 months of 2019 amounted to 1,89 billion rubles.

Compared with the indicator for January-September 2018, it has increased by 6,5 times. At the same time, the company's revenue for this period showed an increase to 107,11 billion rubles, which follows from the interim reports of KAMAZ. The company explained the loss by “the difficult situation on the Russian market in the segment of commercial vehicles, as well as the investment cycle of the company associated with the launch of the new generation of K5 cars”. Earlier, it has been reported that under IFRS KAMAZ had a loss of 3,2 billion rubles for the first half of 2019. At the end of June, summing up the results of 2018 and the first results of 2019, CEO of the auto giant Sergey Kogogin for the first time recalled the crisis of 10 years ago, saying: “The situation is very alarming, I would not like to return to the position of 2008.”

Oleg Afanasyev told the correspondent of Realnoe Vremya that it is too early to talk about the response measures — the results of November (as well as of December) are still unknown:

“We have no anti-crisis plans. But there are and always have been plans to optimize production and improve business efficiency. Every month, the committee on improving business efficiency meets under the chairmanship of Kogogin, where all decisions are taken promptly. Including the fact that today we have a very serious debt burden. The truck market in Russia is experiencing difficult times. Therefore, certain measures, of course, are being taken in this situation, including adjusting the investment programme.”

It is curious that usually KAMAZ held traditional annual meetings with journalists at the end of December. One of the reasons for its transfer to November just became a difficult situation in the market, Afanasyev justified. On the one hand, KAMAZ celebrates a big anniversary on December 13 (the 50th anniversary of the beginning of the construction of the plant).

“On the other hand, after December 13, such prices for restaurant halls that we can't afford in the conditions of such big investment programme, such prices... That is why we have postponed the celebration,” he noticed with regret.

The auto giant lobbied for funding the construction of nine facilities in the auto city by its anniversary

The December jubilee was divided into two dates due to the lack of halls in Naberezhnye Chelny capable of accommodating everyone wishing to celebrate the 50th anniversary of KAMAZ. The solemn part with the invitation of the company's partners, suppliers, dealers will be held in the organ hall on December 5. The second part of the events will be held on December 13, the day of laying the first stone in the construction of the plant in 1969, on the territory of the automobile plant of KAMAZ PJSC with the participation of the leadership of Russia and Tatarstan, artists of Russia and Tatarstan. Russian President Vladimir Putin is also expected here, the invitation to whom was sent by both the leadership of the auto giant and the authorities of Tatarstan. It is unknown yet whether he is going to come. But according to the experience of such events, Putin usually does not miss the moment to visit Naberezhnye Chelny and the automobile plant and take pictures with the workers, at least to support his own image of the “people's president”.

It turned out to be curious not even this, but the initiative of the auto giant to lobby for the construction of a number of infrastructure facilities in the automotive city. The idea, Ushenin admitted, borrowed from AvtoVAZ, which to its 50th anniversary issued (or rather, lobbied) the order of the Russian Federation to allocate funds to improve social infrastructure.

“Our employees went to them for experience, saw this document. At first, no one believed that it happened. As a result, the governments of Russia and Tatarstan have allocated funds, and nine priority projects [in the line of KAMAZ] are already being implemented. These are two ice arenas, a swimming pool, a cancer centre, Masterovye theatre, a ballet school, the Technical University — we have the desire to raise the status of the branch of the KFU, the technopark together with KAMAZ-Master, the go-cart track of the federal level,” the top manager said.

KAMAZ itself will not finance these projects

Oleg Afanasyev specified that all nine projects, of course, cannot be built in one anniversary year and will be implemented within a five-year period through federal programmes. Besides, a number of other projects, unnamed, will be implemented until 2020-2021. At the same time, as Alexander Ushenin told Realnoe Vremya, KAMAZ will not participate in the financing of these “anniversary” social and infrastructure projects, as this is the task of the country's leadership and the Republic of Tatarstan:

“We have just done everything possible, prepared the necessary package of documents, created a committee, headed by Dmitry Kozak (Deputy Prime Minister of the Russian government — editor’s note), to designate our holiday at the federal level. And to ask for financing for projects for this holiday. We took the initiative and became the driver for the document to be implemented.”

“KAMAZ has never had lay-offs over the past 5 years”

To our question whether after the anniversary the company is going to take any measures against KAMAZ personnel in the light of reduced sales and the difficult situation in the truck market — to reduce the staff or the working week, to reduce wages — Alexander Ushenin answered in the negative.

“ KAMAZ has never had lay-offs over the last five years. At any enterprise, especially such as ours, engaged in the modernization of production (KAMAZ has invested 87 billion in this), there is an optimization of processes, but even here, we have not laid off a single person. To date, KAMAZ has 1,500 vacancies, so we can optimize them. The city today has a large shortage of personnel: 0,28% — the unemployment rate! Imagine, five jobs — only one unemployed. No lay-offs are expected.”

January is provided with orders in full, but February is usually a low season

By optimizing the production, the top manager explained, the company opens new jobs at the Master Kama Industrial Park (Master KIP), where it transfers the released labour force. Some of the former workers of the Press-frame plant were transferred to the new plant of cab frames. According to Ushenin, in 2019, there has not been a single day to optimize the working months (the transition to four- and three-working week):

“There hasn’t been a single unpaid day, we paid for all days, although the situation is very difficult — we tried to make sure that our people did not suffer much. This year, due to a large number of orders, people will work on December 30 and 31. They will go to celebrate the New year immediately from the working machines.” Oleg Afanasyev also told Realnoe Vremya that the company is obliged to submit information to the employment centre 2 months before the start of mass lay-offs or reduction of the working week. In January, KAMAZ, as usual, has a corporate holiday, but this month is provided with orders fully. February is always a dead season, explained Ushenin, decisions on it will be taken just in the last days of November. So, that means, in theory, it is possible to reduce the working week against the backdrop of a decline in sales, we asked.

“No, you know, in theory, everything can be expected! You can expect aliens to come! Of course, we take this into account, but the decision is always made upon orders,” Oleg Afanasyev explained.

Accordingly, the salary will not be reduced. The average salary in 2018 was 32,000 rubles at KAMAZ. In 2019 — 34,700 rubles.

By the way, the dispute between KAMAZ and the Executive Committee of Naberezhnye Chelny over 190 buses, leasing payments for which the city hall has long overdue, has not yet been resolved. Ushenin admitted that the issue with these buses, which the auto giant wants to take back, and this can cause a transport collapse in the city, had been acute for him until they solved the problem with the transportation of KAMAZ workers to the factories on their own buses.

“We can't forget that to they owe us,” Oleg Afanasyev added. “Because then they'll come to us and ask why you don't fight for the money from them.” Tax audits are often carried out, and as soon as they see that we have a debt and we have not taken measures to recover it, claims will begin.”

KAMAZ will also present three books that he published for the anniversary until December 13. The first book — a collection of 200 poems written in 1969-2019 by employees and non-employees of KAMAZ about KAMAZ, has already been released. The first owners of it are Ushenin himself and journalists, who were given copies. The second book, the largest, weighing 2,5 kilograms — is KAMAZ in Documents and Facts, which will contain all the documents about the beginning of the construction of the plant and the city 50 years ago: orders, decisions on the first and second delivery, etc. The third, interactive book will be for children. In it, the grandfather — the first builder — tells the grandsons how KAMAZ was under construction (it is released in Russian, Tatar and English).