Prime Minister Vladimir Putin held a conference at Avtodizel
Vladimir Putin's opening remarks:
Good afternoon,
Let's continue discussing the socio-economic development of the Yaroslavl Region, and the situation in its key enterprises.
A number of concrete proposals on government support for Research and Production Association Saturn will be drafted as a follow-up to the meeting we just held in Rybinsk. We have already decided on this, and I am hopeful that adequate measures will be adopted in the social sphere and that the massive personnel layoffs that were initially mentioned can be avoided. I would like the region's governor to follow up on that. I understand that optimisation may be required during reconstruction, but there should be no job reduction at this enterprise. This would be simply incomprehensible.
I would like the governor to say a few words about the enterprise we are at now.
Sergei Vakhrukhov: Thank you. Indeed, after all the very important instructions given during the conference at Saturn, we have no right to allow personnel layoffs. We will concentrate on this. The additional contracts that Saturn is expected to receive will help us preserve the current personnel. We might even be able to attract specialists who will help us to fully implement all instructions on the Saturn development programme.
We are currently at one of the Yaroslavl Region's largest machine-building enterprises, Avtodizel, which is part of the GAZ Group. It is the biggest producer of diesel engines in the Russian Federation. Today, it has powerful capacities to produce many of the engines recently purchased by Russian and Belarussian car-makers.
It is also important to emphasise the enormous social significance of this enterprise, since it is actually the biggest taxpayer and one of the major employers in the Yaroslavl Region today. Being the local economy mainstay, it pays for much of the social sphere, providing heat and other utilities.
In the last few years, Avtodizel was developing rather well and increased its output. In the first ten months of this year, it produced almost the same number of diesel engines as during all of last year, more than 18 billion roubles worth of products in value terms.
However, the demand for its products has sharply dropped in the last few months, and not because of poor quality or any other controllable reason. The financial crisis reduced the demand for diesel engines. Needless to say, the scale of production went down, leading to a shortening of the working week, and may potentially result in personnel layoffs and even jeopardise its operation.
Avtodizel had to reduce its expenses, optimising the management system and lowering the break-even point. Nevertheless, the measures being taken have not produced impressive results, and there is still a serious risk of heavy personnel cuts. It will be very difficult to maintain the current manpower in the future.
Moreover, in the last few years, Avtodizel has been heavily investing in, developing, and introducing new products. For instance, it is completing construction of a new plant to produce 530 series engines and hopes to turn out the first engines next year.
As we said at our meeting, Avtodizel requires serious government support to complete the investment project, which would allow it to produce Euro-4 and later on Euro-5 engines, guarantee jobs, and resolve all social issues in the Yaroslavl Region. In the future, its operation will produce taxes for the budget.
We are closely cooperating with the GAZ Group. Its recent projects have been good for the regions, and we would very much like to continue them. However, I am confident that government support is much in demand, on the investment project in particular. Thank you.
Vladimir Putin: All right.
Let's discuss it in more detail. Avtodizel did indeed find itself in a difficult situation today because car makers have reduced their orders. Among these were MAZ and UralAZ, and practically all other potential customers.
I have information that in the last three months, the scale of production has gone down by more than five times. The debts have increased. Avtodizel has switched to a three-day work week. Needless to say, this may lead, and is certainly already leading, to a reduction of wages and potential personnel layoffs.
I agree with the governor that efforts should be made to prevent the enterprise from facing negative irreversible consequences. We cannot ignore that its products are important. Avtodizel was actively engaged in technical re-equipment. We should give its owners and management their due - it is evident from what we have seen today that money was invested in new products and technologies.
The overall cost of the project discussed here, the YaMZ-530, is 13.4 billion roubles. In effect, this amounts to the construction of a new modern plant that will produce next-generation engines. The project's implementation will create 1,200 jobs in the Yaroslavl Region.
Avtodizel has already invested 2.7 billion roubles, or about 20% of the project's cost. It used loans and its own funds for this, which is normal practice and a good example, especially in today's conditions.
It goes without saying that the government development institutions should help the plant and replace the sources of funding that have been made inaccessible by the global economic crisis.
I know that Russkiye Mashiny, of which Avtodizel is part, has asked Vnesheconombank for a loan. We will deal with this question before the end of the meeting. I would like Mr Dmitriyev (the bank's president) to be ready to speak on this subject.
It goes without saying that the planned modernisation should increase labour productivity. This is all what it is about. Likewise, it should contribute to noticeable progress in engine production and car making.
Needless to say, any modernisation is bound to release manpower; nonetheless, the employment problem should be resolved in parallel. This is why Avtodizel's project to build a new plant is so important. Personnel should be re-trained at the same time. This is a social responsibility of both business and regional authorities.
It goes without saying that we hope that your enterprise will be able to make effective use of the granted funds, and develop the manufacturing of competitive and in-demand products. I would like to hear more about Avtodizel and the implementation of the new projects, and would also like to know what measures have been suggested to preserve specialists and workers.
Is Mr Khristenko here? I would like him to explain the position of his ministry on Avtodizel's projects, and to tell us how it can be helped to diversify the marketing of its products outside the GAZ Group, for the needs of the Defence Ministry, car makers, and agricultural machine building, for instance.
Is Ms Skrynnik (general director of Rosagroleasing, the largest state owned agro-industrial leasing company) here? Would you be so kind to express your opinion on the production of engines for agricultural machine building?
Needless to say, this also applies to the Defence Ministry, which has always been one of the main contractors. Perhaps we should start with you? What do you think about the prospects of cooperation with Avtodizel?
