The No.2 US automaker has announced it has decided to cut around 950 jobs on its Russian joint-venture that operates two factories due to currency issues and the country’s falling demand.
The local Russian currency, the ruble has lost 13% of its value in report to the dollar over the course of the last 12 months and car deliveries in January further fell by 4% after overall in 2013 they dipped 5.5% to 2.78 million vehicles.
John Gardiner, a spokesman for Ford’s European operations, announced that the automaker’s plant near St. Petersburg that is operated in partnership with OAO Sollers will cut around 700 jobs – dropping a shift in June; while at the Ford-Sollers site in the Tatarstan region will also let off 250 temporary personnel.
“Ford Sollers remains absolutely committed to the Russian market and is confident it has the right product plan, people and assets to deliver long-term profitable growth,” the carmaker said in a statement. The cuts were caused by “the rapid and significant depreciation of the ruble, falling industry sales and a consumer shift away” from compact models to SUVs.
Also, the biggest crisis between NATO and Russia since the Cold War ended certainly doesn’t help the automakers, as the country’s actions now draw international economic sanctions.