By on April 3, 2014

Ford-Sollers-Vsevolozhsk-plant

Two plants in Ford’s joint venture with Russian manufacturer OAO Sollers will experience job cuts as a result of a weakening ruble and decreasing demand by customers in the local market.

Bloomberg says 700 positions in St. Petersburg and 250 temporary positions in the Tartarstan region will be let go by June, while production in the former will lose one shift. The cuts were caused by “the rapid and significant depreciation of the ruble, falling industry sales and a consumer shift away” from small cars toward large SUVs according to Ford, who also reassured that the joint venture would continue to remain committed to the Russian market.

As for the current state of things, sales fell 4 percent in the first two months of 2014, following a 5.5 percent decline in 2013 to 2.78 million vehicles, while the ruble lost 13 percent of its value against the dollar within the last 12 months.

The St. Petersberg plant will also shut down for over four weeks before single-shift production and painting begin June 9. The plant currently builds the Mondeo and Focus.

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16 Comments on “Ford Cuts 950 Jobs In Russia Due To Weakening Ruble, Demand...”


  • avatar
    Stumpaster

    Good riddance. Though my friends from Siberia just switched to a Russian built Fiesta and are happy because it tolerates -25C much better than the French car they had.

  • avatar
    schmitt trigger

    Do I smell a geo-political implication here? Hard to say.

    But I don’t think Russians will start smashing Fords or Chevrolets anytime soon, like the Chinese did with Hondas and Toyotas,

    • 0 avatar
      gtrslngr

      You’re right .. they won’t smash Fords and Chevys [ well .. maybe the Chevys seeing as how they\'re such POS ] Rather the new ” State ” will simply come in and take over the factories , facilities and properties … Lock , Stock & Barrel : booting the western folks right out the door

      Don’t think this is possible ? Read what Vlad the Impalers saying in the Russian press .. in Russian … not the watered down western translations . Believe me … its more than possible . Fact is its Vlads main goal .. and has been since his initial rise to power .

  • avatar
    gtrslngr

    Anybody with half a brain would be well advised to pull out ALL their business interests/investments in Russia ASAP

    Simply stated .. Vlad the Impaler is firmly in charge now more than ever . The old Soviet Union is about to become the new ” Soviet Union ” .. under a different moniker . The ” State ” is about to once again become the sole controlling business force in the ” new” Soviet Union . Vlads intent is to completely isolate his new Soviet ” empire” once its fully up and running . And Western businesses need not apply .

    Funny . The opening ceremonies at the Sochi Olympics all but predicted this ; The majority of the ceremony and the most elaborate section being the praises of the ” good ole ” Soviet Union / KGB days . Even funnier .. Vlads been hinting at this for almost a decade . But … like Hitlers ” Mein Kampf ” back in the 30’s … nobody ever reads or pays attention

  • avatar
    Onus

    I suppose everyone is an Expert on Russia now.

    Anyway the Russian economy has been on the down turn long before the ukraine stuff. The ruble was going to slide downward ukraine or not. The central bank was going to float the currency completely.

    Fact is Russian hate Russian brand products. Made in Russia doesn’t seem to bother them and makes cars cheaper by not paying the stupid recycling fee, and huge import tariff. Most of these cars a CKD anyway.

    The focus seems to be super popular. The refresh should help. Russians have a huge choice of cars.

    Nearly all of the Russians i know who wanted cars bought them a year or two ago. Lots of working people don’t have money to buy cars even those living in moscow. Plus public transportation is cheap abit crude and cold in the winter.

  • avatar
    OldandSlow

    The first three initials in BRIC are experiencing economic stagnation this year, probably because of the slow down of economic growth in China.

    Ford has to maintain a presence in in all four of the above to stay global. The question is does Ford offer the right vehicle for emerging markets?

    Most of Fords SUV’s are based on car modified platforms and use complicated drive trains that are more suited to Western Europe.

    • 0 avatar
      gtemnykh

      An astute observation. Simple and rugged drivetrains are very appreciated in Russia, particularly as you leave the surface streets of Moscow. Most (many) Russians own ‘dachas,’ a property with a small summer house and land to cultivate some food crops or to just relax. I think more often than not the roads leading to these dachas are in very poor shape, or even unpaved. In more rural sectors of the country, terrible roads are the norm even in daily driving, let alone getting to the dacha. Hence even compact sedans have ground clearance in the 7 inch range as well as steel skid plates protecting the oilpan and transaxle. Perhaps ford has something that they make in Brazil that could be sold in Russia? A Ford BOF midsize SUV like the international-spec Trailblazer (different than what they sold here) could see some success perhaps. Russians love the most car per pound, much like in the US. The UAZ Patriot sells well despite horrendous build quality (light years worse than what anybody in the US can even imagine as being poorly built). It’s a macho looking, good sized 4×4 BOF SUV with simple construction, and they sell them cheap. 2.7L gas I-4, optional diesel, they’re not too terrible on fuel for their size.

      For reference: $15k will get you into one of these:
      linkhttp://cache.zr.ru/wpfiles/uploads/2012/11/201211211855_5-575×383.jpg

      • 0 avatar
        NMGOM

        gtemnykh – – –

        Excellent observation and analysis.

        Having been in Russian in 1995 (yeah, I know that was an eon ago), Russian “roads” outside of major cities are an oxymoron. Despite all the influx of MAJOR gift giving by European nations (Germany alone gave $60B in the early 1990’s), Russia’s economy is corrupt and incompetent. It is essentially a Third World Country economically, wrapped in some visual trappings of the 21st Century.

        I don’t fully understand why Russia is having such difficulty getting its economic act together (China certainly has), but it reminds me of an old comment by Winston Churchill, “Russia is a riddle wrapped in a mystery inside an enigma.”

        Why any Western country would want to invest heavily there is also a “mystery” to me. Even the neighboring Chinese are treading on this topic lightly, preferring simply to sell there…

        —————–

        • 0 avatar
          gtemnykh

          Corrupt is the key word. The city of Biysk near my grandparents’ village tore all of the old pavement up on the main streets in anticipation of repaving. Before that could happen all of the money in the budget that was set aside for that “vanished.” Coincidentally you could probably find some new fancy dachas being built by the mayor and his cronies…

          Under Soviet rule, nepotism and corruption still existed, but nothing like what it is in the post-Soviet era. The saddest thing for me is to see how dilapidated and crippled the agricultural sector is. It is shameful to import so many foodstuffs when there are so many acres of arable land around. Production of grain/cattle/dairy has never reached what it was before the 1917 revolution. As a native Siberian, it makes me mad to see how in the 90s foreign companies raped and pillaged the abundant local resources, since the 2000s its more so Russia’s own corporations and oligarchs in Moscow. As you see more and more high end luxury cars being bought in that smelly capital, more and more small rural communities die out in Siberia as the young people leave in search of better paying jobs.

          I should add that since the mid 90s, things have improved A LOT. I don’t even recognize a lot of things these days. So many shiny new imported cars, many more well paved roads. Old folks get decent pensions. The corruption is still there and it is still massive, but quality of life has improved to the point where that corruption can conveniently ignored. Despite all of the issues I am very much at home when I visit there, even though I grew up in the US. The people feel more like family, the land feels like my own.

          • 0 avatar
            Big Al from Oz

            @gtemnykh
            I have found the people of the countries I’ve visited are generally accommodating and good people.

            I have even been offered to have dinner at some of the homes of people who really don’t have a pot to pi$$ in.

            Most people in the world want the same, a stable and secure life for their families and futures.

    • 0 avatar
      RobertRyan

      @OldandSlow,
      Will be a problem for Ford. Cannot think of any of Ford’s current lineup the Russians will want.

  • avatar
    stanczyk

    Nobody says that Russia is wonderfull country(in moto-terms : you’ve got tasteless,but expensive nouveau-riche SUVs vs old crapy Ladas and Ziguli ;) , but ..

    ‘The first three initials in BRIC are experiencing economic stagnation this year, probably because of the slow down of economic growth in China. ‘ – how about forex-market manipulations by speculators from WallStr and London city .. weakening ‘developing countries’ national currency..

    ‘Petro-dollar system’ will fall, and than we’ll see ‘what’s what’..

  • avatar
    stanczyk

    I like Vlad .. Vlad is taking a lot about western-fraudsters .. (You know what happend to others who talked this way: Kadafi, Saddam H.(he wanted to sell gas/oil in other currencies than dollar) or Hugo Chavez..Iran also is enemy nr1 (they also want to sell gas/oil in other currencies than dollar).. ) ..

    .. and Crimea was always a part of Russia .. for a long time(with a few decades break after the IIWorld-War..)


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