General Motors Corp could decide next week whether to approve a project, repeatedly
postponed, to make cars in Russia with AO AvtoVAZ and European Bank for Reconstruction
and Development (EBRD), sources told just-auto.com today.
GM’s highest-ranking body of executives, a 20-member automotive strategy board,
recently recommended the company’s board of directors (BOD) should vote for
the plan at its meeting on 5-6 February 2001, insiders said.
Go deeper with GlobalData
The BOD is expected to authorise the deal, though verdicts anticipated on 3
October 2000 and 5 December 2000 were postponed, and the venture has faced opposition
from key officials, apparently including GM Europe president Michael Burns.
A report yesterday suggested a majority of the board may not be behind the project
yet: at least five of 14 BOD members support it, AvtoVAZ chair Vladimir Kadannikov
told daily newspaper Izvestia of Moscow, according to a dispatch there from
Dow Jones News. (Editor’s Note: the BOD has 16 members, 13 not GM employees.)
Importantly, however, the plan is led by David J Herman, a GM vice president
and former chair and managing director of the US automaker’s biggest foreign
subsidiary Adam Opel AG of Germany. Influential and respected, he is understood
to enjoy backing from GM leaders on the BOD: G Richard Wagoner Jr (chief executive
and president), John F Smith Jr (chair) and Harry J Pearce Jr (vice chair).
In December 2000, Wagoner wrote a letter to Kadannikov underscoring his commitment.
In the past six months, parameters of the project have changed repeatedly and
significantly. The investment target was $500m-$600m in August 2000, roughly
$400m in October 2000 and $170m in December 2000. According to informed parties,
the sum remains unfixed, but the provisional total now is $332m: $101m from
AvtoVAZ, $99m from GM and $132m from EBRD (partly in loans).
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
