AutosVolkswagen's Kaluga factories in limbo: New owner struggles to find partner

Volkswagen's Kaluga factories in limbo: New owner struggles to find partner

There was a Volkswagen factory in Kaluga.
There was a Volkswagen factory in Kaluga.
Images source: © Wikimedia | CC BY-SA 4.0
10:56 AM EST, December 1, 2023

Since the conglomerate's exit from Russia, its factories in Kaluga have been owned by a local company intended to resume operations with a new partner. However, the company has yet to find any interested parties, resulting in daily financial losses.

The former Volkswagen factories in Kaluga boast a production capacity of approximately 225,000 units per year. Still, they won't be producing a single car until at least March 2024.

The problem lies mainly with Art-Finance, the new factory owner, who took over after Volkswagen exited Russia due to the outbreak of war in Ukraine. It appears that the Russians struggle to secure a business partner willing to utilize the factory.

There are on-going discussions with the Chinese conglomerate, Chery, but no concrete decisions have been made yet. Every inactive day results in severe financial losses related to maintaining the factory and part of the workforce. As a result, factory management is turning to more comprehensive measures like offering voluntary departure bonuses.

Some employees currently on temporary leave have been offered severance pay packages in exchange for voluntary resignation. However, few have taken this offer, which is hardly surprising.

While on temporary leave, the employees receive two thirds of their salary. Those who choose to leave are offered a severance payment equivalent to three months' salary. As of now, the Kaluga factories are in a stalemate, with no signs of an imminent change.

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