By on June 22, 2012

As part of a very Russian “incentive program”, GM is more than doubling the output of its wholly owned manufacturing facility in St. Petersburg, Russia. Annual production will increase to 230,000 vehicles by 2015, up from 98,000 units currently.

When the expansion is complete, 1,500 additional workers will have found jobs in the then 4,000 people factory. They will manufacture Chevrolet and Opel models for the Russian market, amongst them the new Opel Astra sedan, which will be shown at the  Moscow Motor Show in August.

GM and other carmakers, such as Volkswagen, Ford, Renault and Nissan rushed to Russia in response to Vladimir Putin’s “invest here, or else” policy, otherwise known as Decree 166. That decree goes like this:

Either be locked out of the Russian market (by way of obscenely high import duties).

Or (as per just-auto):

  • Produce at least 300,000 units at a new plant within four years of the agreement being signed, or build more than 350,000 units for an existing plant within three years of the agreement being signed
  • Achieve 60% local content within six years (more rapid timetable for existing plants)
  • Carry out stampings within four years
  • Equip at least 30% of vehicles with locally-sourced engines and/or transmissions within four years
  • Establish an R&D center in Russia

Then you may:

Import components on preferential terms for eight years (but no later than 2020) and carry-out SKD (semi-knock down kit assembly) for 36 months following the signing of the new agreement, with kits not exceeding more than 5% of total production.

 

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20 Comments on “Under Putin’s Gun, GM Creates 1,500 New Jobs In Russia...”


  • avatar
    28-cars-later

    Ah the old obligatory “In Russia, car drives you!” approach.

  • avatar
    Landcrusher

    Which is why you never let your CXO’s invest in these sorts of countries. Board members that allow this crap should be shot. Every exec who supports these boondoggles needs to be investigated for what money, sex, or drugs they have been getting or promised for the eventual loss of the company’s money.

    • 0 avatar
      28-cars-later

      Poland would have been a smarter bet, same second world nation with reasonably educated citizens (compared to Russia), same Baltic Sea access, same access to raw materials. I believe Toyota has set up shop there and I thought I read Opel is moving production there as well. You also get the bonus of a NATO/EU member country as opposed to being in the Soviet empire.

  • avatar
    Educator(of teachers)Dan

    With world overcapacity in car production this makes sense how? Oh right, just trying to please King Putin.

  • avatar
    gslippy

    I wonder how the soon-to-be displaced Oshawa workers feel about this.

    Great photo choice, by the way.

  • avatar
    challenger2012

    Russia has plenty of land for its people as well as natural resources, i.e. Oil and Gas that the world needs. They speak one language, mostly one religion or not and are not divided by ethnicity like we are. I was at a Gas Pumping Station in Russia on the Black Sea in 2007. The masses know what good cars are vs crap like the old Ladas. If I were a car maker, I wouldn’t have gone full in on Russia years ago. Unlike China that will have plenty of cars and no gasoline to fuel them, the Russians will. Russians will also have a good life style, too. It will take 10 years , but Russia will be the place to live. If I were 20 something, I seriously consider Russia for the rest of my life. Also, stunning beauty of females there as well.

    • 0 avatar
      CJinSD

      Institutions are more important than natural resources or even demographics in the prosperity of a country. Just look at Mexico. China is doing a good job with Obama’s help in locking down all the resources they’ll need on the world markets anyway.

    • 0 avatar
      carbiz

      That must be why they are all living here, in the Greater Toronto Area. I have met many, many Russian, Polish, Ukranian and Romanian ‘engineers’ in my line of work: They are intensely proud of the Motherland but they are all well aware of why they emigrated.
      The West has been in a huge rush to invest in the BRIC countries and transfer 100 years of technology in a heartbeat. The only one of the BRIC countries I would count on is Brazil.
      Despite the cozy pics of Putin and the Chinese Premier a few weeks back, those two countries hate each other. One side has 20% of the world’s population and the other side is leaking citizenry like the Titanic. One side is rich in resources; the other side is depleting theirs like crazy.
      It’s too bad the West didn’t sit this one out, but it’s too late now.

    • 0 avatar
      skor

      Spoken like a true American who probably couldn’t even find Russia on a map.

      Only 80% of the Russian population is ethnic Slavic. There are 160 ethnic minorities residing in Russia proper. There 15-20 million Muslims living in Russia.

      As for Putin’s demands on foreign businesses, good for him. At least he has the good sense not to fall for the the Ayn Rand “free market” idiocy that afflicts most Americans.

  • avatar
    forraymond

    +100 on “free market” boondoggle

    typical TTAC photo grafting – making the pic fit the point of view

  • avatar
    el scotto

    I can’t wait for Chevy to reverse engineer a Trabant. It could happen, GM’s done dumber things

  • avatar
    stanczyk

    @28-cars-later – don’t be so enthusiastic about Poland !?! …

    Poland has people in government that are as stupid (as Forest Gump), incompetent (as Obama) and greedy (as WallStreet bankster –> still probably not as greedy like the ones in Russia :) and they allow “big-money” to do what the “big-money” want … (and You know what is happening when you let “big-capital” to establish rulezzz ?!? ) …

    “Some says” that Putin and his administration being quite wise not letting “western money” to penetrate Russia (and Yes! russian a$$ is very atractive: a lot of oil, natural resources…and cheap work-force) .
    So during Boris Jeltzyn administration (“system-transformation”) “They” decided they will give “national property” to their own oligarchs not to “western businessman” … ).
    On the other hand , In Poland government sell everything to “werstern bussiness” and right now naive Poland became a colony for other countries (no national property and relatively cheap work-force –> social structure is similar to the one in US or Russia : few people have a lot , and there’s a lot of poor people (“small and weak” middle-class) …).

    I don’t know which model is worst, but in long-term thinking (Poland is not very good at it) I belive Russia as a country (not common people:) will win on this attitude … (China is doing the same –> if You want to produce car in China You need to cooporate with Chinese company)

    And Yes in Poland there is Toyota engine factory, Opel procuce Astra model , Fiat in Tychy (award-winning factory) produce Lancia Y and Fiat 500 (BTW: Italians decided to move production of Panda back to Italy -> political reasons).
    So if the wages in Poland “would like to increase” the “big-capital” will not feel any sentiments … they will move on … (not so stupid man Vladimir Vladimirowitz Putin won’t let them “exploit and go” so fast … :)

  • avatar
    stanczyk

    A little bit outside the main subject … :)

    @challenger2012
    “It will take 10 years , but Russia will be the place to live. If I were 20 something, I seriously consider Russia for the rest of my life. Also, stunning beauty of females there as well.”

    –> are you joking ?!? :) … to live in russian-chaos is suiside (Now I’m not joking: It’s an Animal Planet ! –> “money-driven everything” , using force to get what You want, bribery , cheating … etc …)
    In system like that poeple became crazy (Russians themself are born there so some of them only “mild-crazy”:) …
    And You would became an alcoholic immediately … I guarantee You that!:)

    … and about females: … yes they are “not bad looking” (in Polnad ass well:) but they are greedy, stupid [and , except nice body:) they are not females anymore(no female character…)! :) …

    I’m really sorry for being so harsh and sarcastic/ironic/cynical , but that’s the true … that’s the reality !

  • avatar
    doctor olds

    Russia is the second largest car market in Europe, after Germany. It is fast growing, and GM, the best selling carmaker in the world, is positioning itself well to take advantage of that growth.

    • 0 avatar
      Landcrusher

      Let me fix that for you:

      Russia is the second largest car market in Europe, after Germany. It is fast growing, and GM, the best selling carmaker in the world, is positioning itself to be taken advantage of.

      ;)

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