Ford Russia has announced that it has ended production at two of its three Russian manufacturing plants and is looking for buyers for the facilities after paying off a loan. Ford Russia hasn’t been forthcoming with exactly how much the loan was that it and its partner, Sollers, paid off to the state-owned VEB bank. We do know that VEB had loaned the Ford-Sollers joint venture $629 million in 2011.
Ford Europe chairman Stephen Armstrong recently said that Ford was in talks with several global automakers who were interested in one or both of its factories, but he didn’t specify what automakers Ford was in talks with. The two factories that Ford Russia has shutdown include one in Naberezhnye Chelny that is about 400 miles east of Moscow and one in Vsevolozhsk which is a suburb of St. Petersburg.
Estimates are that the Ford Russia factory at Naberezhnye Chelny is worth about $75 million. Reports indicate that Ford Russia had been in talks with a major Russian truck maker called KAMAZ on that factory, but the negotiations were unsuccessful. The Vsevolozhsk factory is thought to be more attractive to any potential buyers due to its proximity to St. Petersburg, which is the largest seaport in Russia. Reports indicate that VW and Hyundai may be interested in that factory, but neither automaker would comment.
A third Ford Russia factory in Elabuga won’t be sold. Fold and Sollers have established a new joint venture there that will assemble Ford Transit vans. Sollers will have the controlling stake in the joint venture and is receiving tax incentives under a special investment contract signed on June 7th with the Russian Ministry of Industry and Trade. Automakers have had a hard time selling factories in Russia, Ford rival GM has been trying to sell a factory in the St. Petersburg area for nearly four years. It’s unclear what deal, if any, was reached with the workers who were let go form these plants.