Ford to shut down its three plants in Russia
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NEW YORK: Ford is pulling the plug on its car business in Russia and closing three of the four plants it operates there, CNN reported.
The company said Wednesday that a joint venture in Russia will now concentrate on making commercial vehicles, such as the Transit commercial van. Ford had operated that venture with Russian company Sollers PJSC. Sollers will take control of the joint venture from Ford, assuming a 51% stake.
The closures include assembly lines in Naberezhnye Chelny and St. Petersburg, and an engine plant in Elabuga. The remaining factory in Elabuga will now make only commercial vehicles.
The company did not say how many employees would lose their jobs as a result of the plant closings. It has 3,700 employees spread among the four plants, and working in some offices.
Ford (F) announced last year that it would restructure its global operations and exit businesses that were not profitable or growing in order to free up resources for a new generation of products, such as electric and self-driving vehicles.
Overall the company estimates that the restructuring will cost it $11 billion over the next three to five years.
The moves announced Wednesday in Russia will cost the company between $450 million and $500 million, with about $200 million of that going to severance and termination payments to suppliers.
Earlier this year Ford announced plans to close a transmission plant in France, and said it has started negotiations with unions about halting production at a factory in Germany.
Ford said it expects most plant closings and cutbacks to happen outside of North America. North American sales accounted for virtually all of its profits last year. It said earlier this month that it has plans to invest $900 million in Michigan and plans to add 900 jobs in the state in the coming years to build electric and self-driving vehicles.
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