MOSCOW (AP) — Ford said Wednesday it will close three factories in Russia, causing heavy job losses, as it pulls out of passenger vehicle manufacturing in the country. The U.S. carmaker said it will stop…
MOSCOW (AP) — Ford said Wednesday it will close three factories in Russia, causing heavy job losses, as it pulls out of passenger vehicle manufacturing in the country.
The U.S. carmaker said it will stop making passenger cars in Russia by the end of June, closing vehicle assembly plants in St. Petersburg and Naberezhnye Chelny, as well as an engine plant in Yelabuga.
Ford said “significant employee separations are required.” The Ford Sollers joint venture employs around 3,700 people in total in Russia, Ford said, adding that the total number of people leaving the company has yet to be determined.
The company blames a slow recovery in the Russian car market after an economic slowdown in recent years, and moves toward cheaper cars.
Ford will now focus solely on commercial Transit vans in Russia through its Ford Sollers joint venture. Russian partner Sollers will take 51 percent majority ownership of the joint venture, which was previously equally owned by both parties.
Ford didn’t comment on whether any of the plants could be sold.
Ford Sollers has repeatedly paused or scaled back production at the St. Petersburg plant in recent years, citing low customer demand.
An independent trade union operating at the St. Petersburg plant has criticized the restructuring plans and said it would try to persuade the regional government to pressure Ford to reconsider.
Russian Deputy Prime Minister Dmitry Kozak told the Vedomosti business daily on Wednesday that the government was in talks with Sollers about ways to support production of Transit vans at the vehicle assembly plant in Yelabuga.
According to the Association of European Businesses, a trade body for foreign companies in Russia, Ford sales of cars and light commercial vehicles such as vans grew by 6 percent in 2018 to 53,234 units. That ranked Ford the 10th highest-selling brand while Lada and the Korean sister brands Hyundai and Kia led the way.
However, AEB statistics show a 45 percent fall year-on-year in Ford sales in the first two months of 2019, down from 7,566 to 4,168.