The head of the GAZ Group has criticised the measures of government support for enterprises

The head of the GAZ Group has criticised the measures of government support for enterprises


RBK.- GAZ Group chairman Vadim Sorokin has described the measures taken by the government on the compensation of downtime for car manufacturers and suppliers as ineffective.

The measures proposed by the Russian Ministry of Industry and Commerce will not be able to solve the problem of loading at Gorky Automobile Plant in the current conditions of a total drop in demand, which may lead to critical consequences for the entire enterprise. The relevant statement has been made to a correspondent of by the Chairman of GAZ Group Vadim Sorokin.

“The Ministry of Industry and Commerce is not proposing measures that can ensure the capacity optimisation of the largest Russian manufacturer of commercial vehicles, in the face of a total drop in demand. Out of an ambulance order worth 5.2 billion rubles, we have only been allocated a volume, equivalent to less than one and a half days of conveyor time” – Sorokin emphasised.

Sorokin has added that so far in April the company is loaded at a level equivalent to a third of last year’s figure and practically there are no orders for May and June. All of these factors may lead to dire consequences for the GAZ Group itself with its 35,000 employees, as well as approximately 3500 suppliers cooperating with the company and a total number of 400,000 people related to them.

Most of the small and medium-size businesses, which are the main clients of the light trucks and minibuses manufactured by the company, have suspended operations at the moment, as told by Sorokin. According to the chairman, the companies that continue operations have currently prioritised the salary payments and maintenance of existing infrastructures and the investments have been frozen for at least a few months.

The head of GAZ Group approaches the government’s compensation option for downtime for factories and suppliers sceptically, on the other hand. “State orders placed on automobiles and buses needed in social and municipal services, urban transport and agriculture would be a lot more effective. Such a move would provide not only the manufacturers, but also the entire chain of suppliers with continuous production, creating conditions to overcome the crisis” – Sorokin explained.

President Vladimir Putin has promised measures on the support of the automotive industry of the country against the COVID-19 epidemic during a government meeting on Wednesday, the 15th of April. According to TASS, a new meeting has been scheduled for 22 April, which will bring Putin, the Ministry of Industry and Commerce and representatives of the automotive industry together.