Russia’s major car manufacturer switches to shortened work week amid sales plunge
REUTERS photoRussia’s largest passenger car manufacturer, Avtovaz, announced a transition to a four-day work week for a period of six months, the company was quoted as saying on Feb. 15 by TASS News Agency.
Avtovaz possibly switching to a four-day work week was first reported after a meeting of the manufacturer’s board of directors on Nov. 30, 2015.
“The board of directors focused on the main areas of improvement and its adaptation to the current market conditions,” the company’s press service had said.
It had been reported earlier that Avtovaz was at risk of putting operational activities on hold due to large losses and difficulties associated with the repayment of debt.
Ernst&Young said Avtovaz’s losses amounted to 73.85 billion rubles ($932.5 million) in 2015, while short-term liabilities at the end of the year exceeded the current assets by 67.78 billion rubles ($855.2 million), which caused the auditor to doubt the manufacturer’s ability to continue its operational activities, as reported by TASS.
Avtovaz, majority-owned by Renault and its alliance partner Nissan, said management was confident it could secure help from shareholders “at a level required to finance its operations in the foreseeable future,” as quoted by Reuters on Feb. 12.
French carmaker Renault separately slashed the value of its stake in Avtovaz by 225 million euros ($253 million). Its finance chief said talks with other Avtovaz shareholders were ongoing.
Russian state-owned conglomerate Rostec, which has a 32.87 percent stake in the holding company that controls Avtovaz, said it was considering converting part of the debt it is owed by the carmaker into shares to increase the troubled firm’s capital, as reported by Reuters.
Russia’s car industry has been hammered by a steep economic downturn, fuelled by collapsing oil prices and Western sanctions.