It hasn’t taken long for new AvtoVAZ CEO, Bo Andersson, to stamp his mark on the Russian automaker.
Fresh from announcing a US$192m loss for last year, Andersson has already unveiled a raft of reduncancies to accompany those imposed last year.
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The latest cull will see 2,500 white collar managers go – what AvtoVAZ terms ‘specialists,’ although it doesn’t reveal who these are as well as “managers and clerks.”
Those jobs will disappear along with the 8,000 blue collar job losses announced last year, bringing the reduction – so far – to around 10,500 out of a workforce of around 65,000.
Andersson’s got form here. In turning around GAZ Group – Russia’s largest manufacturer of commercial vehicles with 13 plants – he wasn’t afraid to step on toes and rationalised the company in the fomerly closed city of Nizhny Novgorod.
For a community based on historical Soviet expectations of jobs for life, that must have come as a considerable jolt and although starting gently, it looks as if Andersson is implementing his own brand of shock therapy to AvtoVAZ.
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By GlobalDataI have interviewed Andersson before in Nizhny – where his early morning briefings had all his department heads in a standing meeting that lasted all of a rapid fire ten minutes – the Swede does not do prevarication.
However, attempts to reach him in Russia this afternoon (20 February) were met with some incredulity by his spokesman and as I know he is used to walking 5km a day around his site, maybe he is well, pretty busy at the moment, but I’ll perservere.
AvtoVAZ may well have hired him – and you can imagine how his appointment went down in Nizhny – for his rather impressive contacts book as well.
He has friends in high places and regularly cited Russian President, Vladimir Putin, as backing what he did at GAZ. This is what he said during his tenure at the GAZ helm. “We have had the benefit of having Putin here four or five times – I feel he is very supportive of what we have been doing,” he said.
“His people are somewhat irritated with me because I look at productivity per employee and sales per employee – every time Putin is saying ‘that is great’ and people are saying ‘don’t show him these charts.’
“Putin looked at me with his blue eyes and said ‘fix that’ [productivity] – I fixed it. I am impressed with his [Putin’s] work ethic – he works a lot. His interest is very high and his expectations are very high.”
Part of Andersson’s previous success was also his treatment of unions and it may be his paternalistic Swedish background but he genuinely seems keen to have the labour organisations on his side – it remains to be seen whether or not the Togliatti bodies see the redundancies in such glowing terms.
The new chief has set in motion a whirlwind 220 “actions,” which at the moment remain rather opaque, but which appear to boil down to “adjustment of output targets, control and regulation of stocks, management of current assets, dealership management, client management, efforts to bring down purchasing prices and labour costs.”
The forensic eye for detail of the Swede can be gauged by a brief phrase included in a statement AvtoVAZ sent me today that “all operative processes are being reviewed,” followed up by perhaps a warning shot across union bows:
“The first and foremost target is to ensure a sustainable profitability of the company in spite of the current situation in the Russian market.”
Under Andersson’s tutelage, GAZ Group developed successful relationships with overseas OEMs such as General Motors and it may be he looks to nuture more of the same with his new company.
There’s not much detail to work with at the moment – Bo was pretty communicative at GAZ and it can only be hoped he’s as chatty this time around.
With the eyes of the world currently on the Olympic Games in Sochi, Russia is very much at the forefront of global attention.
Can the Swede turn the Russian company with its instantly recogniseable Ladas into profit once again?
He won’t be afraid to take the hard road to do it. The last line of AvtoVAZ’s statement to me this afternoon was: “Over 100 blue-collar workers have left the company…over the past week alone.”
It’s not clear which week that refers to, but it’s surely Andersson’s’ new broom that is sweeping the automaker.
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