Putin Urges Renault to Help AvtoVAZ

AvtoVAZ sees its business in a desperate situation, with the economic chaos forcing the management board take a shocking decision: a job cut affecting more than 27,000 workers. But Russian Prime Minister Vladimir Putin is asking French automaker Renault SA, which holds a stake in AvtoVAZ, to step in and support the ailing carmaker or reduce the stake in the company.

"Either they (Renault) participate in funding the enterprise or we will have to agree with them on dividing up our stakes," Putin told government officials according to Reuters.

Russia has already pledged to support AvtoVAZ but First Deputy Prime Minister Igor Shuvalov said he'll need two more weeks to determine how much money the company would need to stay alive. Finance Minister Alexei Kudrin showed his support for the company but said this would be the last time the government would help AvtoVAZ.

"I don't think AvtoVAZ will die," Kudrin was quoted as saying.

Vladimir Putin emphasized that Renault's help is mandatory is current economic situation and urged the French manufacturer to join negotiations and determine the best way to support the Russian carmaker.

"As far as modernization is concerned, we need to talk to foreign partners, Renault and Nissan. We have already given AvtoVAZ the first tranche of 25 billion rubles and have avoided diluting their (Renault) stake," Putin said.

AvtoVAZ announced in September that it plans to lay off 27,600 people out of the over 100,000 workers currently employed. "The enterprise is working on one shift and at 65 percent of capacity. Lowering personnel numbers is essential in such a situation," AvtoVAZ said in a statement.