New coach: the shareholders of AVTOVAZ picked up a replacement Bo Andersson

One of the main tasks of the new head of AVTOVAZ will decrease the currency share in the procurement of components, the expert believes

Tuesday, March 15, the Board of Directors of AVTOVAZ will make a decision on termination of the contract with the incumbent President of the plant Bo Andersson and choose a new leader. Resignation Andersson said earlier the General Director of “Rostec” Sergey Chemezov, the change of management was confirmed by the press service of “Renault Russia”. The Renault-Nissan Alliance is the controlling shareholder of AVTOVAZ. And 74.51% of shares of factory belongs to the company Alliance Rostec Auto, Renault-Nissan 67.13% of shares, and “Rosteh” — 32,87%.

The initiator of a change of leader was “rostec”. Chemezov publicly rebuked Andersson for mass layoffs, the increase in the share of foreign components in vehicles and the financial condition of the concern. Andersson wrote the application about dismissal at own will in February and will leave the factory on April 7, reported the portal “Parts-Car”.

Several employees of AVTOVAZ and people close to the “Rostech” and Renault-Nissan, tell RBC that the Board of Directors will discuss three candidates for the position of President of AVTOVAZ. This Nissan Vice President and head of brand Datsun, Vincent Kobe, Director General of the Romanian automaker Dacia, Nicolas Maure, CEO of United automotive group (OAS, the “daughter” of AVTOVAZ, the plant operates “IzhAvto”) Mikhail Ryabov. At AVTOVAZ, “Rostech” and Renault-Nissan declined to comment. Ryabov refused to comment, his friend argues that the suggestion to head of the plant did not receive.

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The interlocutors RBC considered the favorite Nicolas Mora. That Moore may head AVTOVAZ, and heard the officer of the government, however, according to him, this decision of the government was not consistent. Prime Minister’s press Secretary Dmitry Medvedev Natalia Timakova declined to comment.

56-year-old Frenchman Nicolas Moore has worked in senior positions in the Romanian Dacia since 2006, and in 2014 led the company. Since the late 1990s, Dacia is owned by French group Renault, being one of the largest companies in Romania. When Sea Dacia became the fifth plant in Europe by number of vehicles produced. In 2015 the Romanian site has collected about 340 thousand cars at capacity of the local market 81 thousand cars (data of Association of European car manufacturers), 90% of cars exported. The total production of cars under the brand Dacia (since 2012 also gather at the Renault plant in Morocco) last year amounted to 551 thousand cars. This is 3% higher than a year earlier. The company does not disclose financial figures, but in an interview with the Romanian media Moore said she was profitable.

The second candidate, Vincent Kobe, according to a source close to AVTOVAZ, accepted an offer to head the Russian carmaker without enthusiasm. Kobe knows firsthand about the problems of AVTOVAZ since 2010 he serves on the Board of Directors of the company. Kobe has three degrees, including he graduated from Harvard business school. In Nissan he works since 2002, and in 2005 became Vice President, purchasing, Nissan Europe. Since 2010 — Vice-President of Nissan Motor Co. In the company of Kobe is responsible for the brand Datsun, which Nissan was closed in 1986, but in 2012 decided to revive the brand as a budget car for emerging markets.

How do you evaluate the work of Bo Andersson AVTOVAZ

Sergei Chemezov, head of Rostec

“We and I in particular, many claims Andersson. He did a lot for the company came to the deplorable situation in which it is today.”

“Here [at the company] according to the method of circumcision, the people kicked to the street. This practice, probably European, we believe that this can not be done, you should behave more flexible”.

“His big mistake was that he did not actively work with Russian suppliers. He went the easiest path — signed contracts with suppliers of Renault and Nissan. Andersson believes that the Russian suppliers of poor quality, but I always told him that they need to work and make work of them.”

Carlos Ghosn, head of Renault-Nissan

“Bo Andersson headed AVTOVAZ for more than two years — not an easy job, which is to restructure the company, its modernization. <…> Much of this has been — and in appalling conditions, as long as he does that, the market crashed”.

“In the conditions of falling of 50% of the market maintaining all employees means bankruptcy. That’s the way this business. We are not in a situation where you need to try to save people, how good they were.”

“I don’t think that today in Russia there is at least one automaker that operates without loss. The automaker that can make money when market down 50%, I would have given one to someone special award”.

Ryabov with 2014 headed by the OAS, which includes “IzhAvto”. Assembles Lada Vesta. Ryabov is the only top Manager who not only retained his post with the arrival of Bo Andersson AVTOVAZ in 2014, but also reinforcedpeel’s position. In the 1990s Ryabov worked at AVTOVAZ mechanic mechanical Assembly work. First management position was received in 2010, when he was appointed Director of the project cars on the platform In-0 (Renault). In 2012-2014 he was Vice-President of AVTOVAZ by products and programs.

The new President of AVTOVAZ, the company will have to be withdrawn from the pre-bankrupt state. By the end of 2015, the factory received a record loss of 74 billion roubles under IFRS — three times more than the year before. Loss from operations increased more than eight times, to 66.8 billion rubles In prison for reporting for 2015 Ernst & Young have expressed “significant doubt in the ability of JSC “AVTOVAZ” and its subsidiary organizations to continue their activities continuously”. The market share of AVTOVAZ in 2015, according to the Association of European businesses, increased by 18.6%. Before Andersson shareholders set the task to bring it to 20%.

Who is better suited to the role of the head of AVTOVAZ, is dependent on the tasks put before the new head, says the analyst of “VTB Capital” Vladimir Bespalov. “Whoever is appointed, it will be difficult for AVTOVAZ, because enterprises have many unsolved problems and their solutions depends on the market situation”, — says the analyst. If Renault-Nissan will help AVTOVAZ to increase exports, the new head of the company will be easier but will need to continue to optimize costs through the sale of non-core assets and greater collaboration with suppliers, Bespalov is sure. New reductions of the personnel, the expert does not wait.

On their own

On 10 March at the meeting with the staff of AVTOVAZ Bo Andersson said that he wrote a letter of resignation, without waiting for the Board of Directors on 15 March, “Vedomosti”. Andersson will work at the factory until April 7 and will pass the case on to his successor. After that he left Russia and will work in a large private company. We are not talking about the Renault-Nissan Alliance. Care arrangements Andersson not disclosed. However, as Andersson himself wrote the statement, it is unlikely that he will be compensated. If he has not complied with the KPI, then legally no matter on whose initiative terminated the contract, but from the point of view of reputational risk that makes sense.

Executive Director of the analytical Agency “AUTOSTAT” Sergey Udalov considers that one of the tasks of the new head of the plant will decrease foreign currency component in the structure of imports of components for vehicles of AVTOVAZ and with this better cope Ryabov. Two other candidates, according to Udalova, will be able to increase exports, as better knowledge of the European market.

Sources told RBC earlier that rostec wants to strengthen its influence at AVTOVAZ and aspires to the post of Chairman of the Board of Directors of factory has taken a person proposed by the Corporation. Now the Board of Directors of AVTOVAZ headed by the President of Renault-Nissan Carlos Ghosn. A source close to AVTOVAZ, knows that the President can be personally Chemezov, but to confirm that RBC failed. In the “Rosteh” this question does not comment.