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Shuvalov Vows No AvtoVAZ Layoffs

AvtoVAZ will create two new subsidiaries that will employ up to 15,000 people, providing jobs to the thousands of workers whom the struggling car giant plans to lay off, First Deputy Prime Minister Igor Shuvalov said Monday.

“Nobody will be fired. We are creating new jobs and offering people new job opportunities,” Shuvalov said during a meeting with plant workers in Tolyatti.

He identified the new subsidiaries as AvtoVAZ Perspektiva and Reforming Center but provided no information about how they would operate and what they would produce.

AvtoVAZ officials also could not give details about the companies immediately.

Shuvalov said additional companies, including an aircraft-building plant, could be set up in Tolyatti to employ more laid-off workers if needed and the government was considering the establishment of a special economic zone there.

“If there is a way to use qualified workers who were previously at AvtoVAZ to create new companies, including ones associated with airplane production … there are opportunities for this,” Shuvalov said, Interfax reported.

The specter of thousands of people being fired from the nearly bankrupt AvtoVAZ by year-end has rattled workers as well as the government, which is eager to avoid potential unrest amid the economic crisis. The carmaker and the government have offered conflicting figures on how many workers might be let go. Vedomosti reported Oct. 28 that the latest government-backed plan calls for the dismissal of 21,000 of the company’s 92,000 workers.

A government commission formed by Shuvalov a month ago is expected to unveil a plan for AvtoVAZ at a meeting Tuesday. The plan is expected to shed light on a financial rescue package for AvtoVAZ and details of the imminent layoffs, as well as address a future strategy for AvtoVAZ and the extent of the involvement of France’s Renault, which owns a 25 percent stake in the carmaker.

Prime Minister Vladimir Putin said last week that the government was prepared to give the plant another 55 billion rubles ($1.9 billion), of which 38 billion rubles would be used to pay off bank debt.

Putin is not expected to take part in the meeting Tuesday, said Putin’s spokesman Dmitry Peskov. In addition to AvtoVAZ, other more general car industry issues will be discussed, he said.

Shuvalov visited the Tolyatti plant Monday together with Russian Technologies chief Sergei Chemezov, Chemezov’s deputy Igor Zavyalov, Vneshekonombank head Vladimir Dmitriyev, Samara Governor Vladimir Artyakov and presidential envoy Grigory Rapota.

Earlier Monday, Shuvalov visited KamAZ’s plant in Naberezhniye Chelny, praising it for taking advantage of the crisis to restructure production.

KamAZ president Sergei Kogogin is expected to join the board of directors at AvtoVAZ, taking a seat vacated by former AvtoVAZ president Boris Alyoshin when the board is elected later this month.

Meanwhile, the Prosecutor General Yury Chaika is opening an office at the AvtoVAZ plant “to protect people’s rights and freedoms, as well as to receive information about the socio-economic situation at AvtoVAZ,” according to a statement on the web site of the Prosecutor General’s Office.

The new office will be open to visitors every day from Tuesday through Feb. 10, 2010, the statement said.

Prosecutors have been investigating AvtoVAZ for several months and found thousands of cars and parts that had been reported lost, suggesting management problems. Last month, AvtoVAZ said 7,500 cars lost on their way to dealers this year had cost the company 1.7 billion rubles.

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