Ford's Russia Joint-Venture Hires 700 New Workers
September 14 2017 - 2:36PM
Dow Jones News
By Christina Rogers
Ford Motor Co. is hiring about 700 new workers at its van and
sport-utility factory in Russia, a sign that the country's
long-suffering car market is starting to see signs of growth.
Together with joint-venture partner and Russian car maker
Sollers JSC, Ford will be adding a second shift to the factory in
Elabuga by year-end, marking the first time it has expanded the
plant's workforce since 2013.
Demand for new cars and trucks is starting to perk up again
after years of economic and political turmoil depressed new-vehicle
sales in the country, once seen as a promising emerging market for
car makers. Russian auto sales were up nearly 10% through August
this year to nearly 1 million vehicles, according to the
Association of European Businesses.
Despite the country's recent troubles, Ford has doubled-down on
Russia, taking a controlling stake in the joint-venture two years
ago and pouring new investment into it at time when rival General
Motors Co. has largely retrenched from the European market,
including closing a plant in Russia and halting sales of most
products there.
In 2011, Ford acquired its joint-venture stake in Sollers for
$364 million.
Ford executives are banking on the auto market's recovery in
Russia to help give its once-troubled European operations a boost,
helping to move them closer to a long-term goal of posting 6% to 8%
margins in the region. Ford earned $1.2 billion in pretax profit in
Europe last year and delivered an operating margin for the region
of 4.2%.
Bob Shanks, Ford's chief financial officer, said during an
earnings call in July that he sees Russia eventually becoming
Europe's largest individual market and delivering to Ford "very
good returns."
Ford has in recent years expanded its lineup in Russia, rolling
out new models such as the Focus and Fiesta. It has also taken
advantage of GM's pullout, offering "trade-in" bonuses to customers
owning brands leaving Russia.
Ford builds the Kuga and Explorer sport-utility vehicles at the
Elabuga plant, as well as the popular Transit van.
Write to Christina Rogers at christina.rogers@wsj.com
(END) Dow Jones Newswires
September 14, 2017 14:21 ET (18:21 GMT)
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