A major collaboration between Volkswagen and the GAZ group is being terminated, but for the time being, the German automaker’s complete withdrawal from Russia is still awaited. The Volkswagen group will pay its employees in the factory in the Russian city of Nizhny Novgorod who voluntarily resign a severance payment. The measure is a consequence of the sanctions for the war in Ukraine.
Volkswagen assembled models of the Volkswagen base brand as well as models from its subsidiary Skoda at the plant in Nizhny Novgorod. However, the factory is owned by the GAZ group, of which Oleg Deripaska is co-owner. And Deripaska is on the Western sanctions list.
Initially, Volkswagen received a temporary exception that allowed the factory to remain active. But that exception was not extended, the German carmaker said in a press release on Thursday. The collaboration with GAZ is now ending, says a Volkswagen spokesperson. About two hundred workers have been affected.
The Russian newspaper Kommersant, which falls under the Russian censorship rules, reports that employees who terminate their contracts before June 17 will receive another six months’ wages. If you do that before June 29, you will get five months.
Volkswagen did not build full cars at the factory located about 430 kilometers east of Moscow. However, the CKD production process (‘completely knocked down’) was applied. Separate parts and systems were supplied that only had to be put together.
The Volkswagen group has its own factory in Kaluga, 150 kilometers southwest of Moscow. Production has been halted since March 3 due to supply problems, the result of the sanctions. So far, Volkswagen has said nothing about a possible complete exit from the Russian market.
Free unlimited access to Showbytes? Which can!
Log in or create an account and never miss a thing from the stars.