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United Russia to Save AvtoVAZ

Workers sitting in Avtovaz's Tolyatti factory in April 2009. Prime Minister Vladimir Putin said during his address last week to United Russia's party congress that the government's program to reform single-industry towns would begin with Tolyatti. Denis Grishkin

The government has approved a plan to send managers from United Russia to work at troubled carmaker AvtoVAZ, but the party is promising that they won't force out the company's current executives.

United Russia "has formed a group of managers from people on the party's 'personnel reserve' who are ready to go work at AvtoVAZ," a high-ranking party official and a member of the personnel reserve told Vedomosti.

The United Russia leader said the 10 candidates proposed by the party were discussed with the government and approved by First Deputy Prime Minister Igor Shuvalov, who is managing anti-crisis measures for the plant. The only remaining question is when they would start, the source said.

A spokesperson for Shuvalov declined comment.

A different government official said the party members would most likely work on development strategy for the company and creating effective production at the plant. The high-ranking United Russia official said the managers could also be tasked with overseeing how bailout funds from the budget are spent.

The government is working on a development strategy for AvtoVAZ, the United Russia official said, but it is too early to say which of several options will be proposed or what the managers' role would be.

Yury Kotler, who oversees the party's personnel reserve, said proposing new management for AvtoVAZ was among their priority projects. He stressed that the current management would not have to leave but said new people were needed.

A source in the Samara regional government said the presidium of United Russia's general committee was planning to hold a meeting soon in Tolyatti, where the plant is located, to unveil the party's program "Tolyatti — A City to Live In." A member of the presidium said they were discussing a possible trip but neither the date nor the agenda had been decided.

A source in the company's management said United Russia member and State Duma Deputy Yury Isayev could become the vice president overseeing AvtoVAZ subsidiaries created to hire laid-off workers. The idea was discussed during Shuvalov's last trip to AvtoVAZ, company spokesman Igor Burenkov said.

A source close to the Duma's leadership said a decision had not been made on whether Isayev would leave the post.

Prime Minister Vladimir Putin said during his address to United Russia's party congress that the government's program to reform single-industry towns would begin with Tolyatti.

He suggested that United Russia make efforts to revitalize such towns one of its top priorities. In mid-June, the party's presidium created a working group on single-industry towns.

The anti-crisis managers sent to Tolyatti will be the first step in the party's "Renewal" program, which was started in May. Under the plan, managers selected by the party would be sent to socially significant factories, create anti-crisis programs and introduce concrete mechanisms for their implementation.

In essence, members of the personnel reserve will be anti-crisis consultants, Kotler said. The working group on AvtoVAZ was led by Lada-Servis vice president Leonid Kachalov, and it also included VTB Capital vice president Igor Mankov and ValueTech Advisers managing partner Alexei Gostomelsky.

Several of them could be among those sent to Tolyatti. Russian Technologies and Sberbank have expressed interest in the project, as have the Industry and Trade and Regional Development ministries, Kotler said.

Deputy Industry and Trade Minister Stanislav Naumov said the ministry had begun looking into the party's reserve list. The ministry wants to have the managers help modernize state-controlled industrial enterprises and other companies, he said.

There's no particular reason to assume that United Russia has a lot of plans or proposals for AvtoVAZ yet, said Igor Nikolayev, an analyst at FBK. He said he thought that all of the company's shareholders — not just the state and the party — should decide on whether to take in managers from United Russia.

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