Renault Promises To Help Russia's AvtoVAZ

A top executive said Prime Minister Putin can count on Renault to assist its partner, struggling Russian carmaker AvtoVAZ, Russian news agencies reported.

MOSCOW (AP) -- A top Renault executive told Vladimir Putin on Monday the Russian prime minister can count on the French auto giant to assist its partner, struggling Russian carmaker AvtoVAZ, Russian news agencies reported.

Putin warned last week that Renault is risking its 25 percent stake in by doing too little to help finance Russia's largest carmaker as it sinks in the global downturn.

Christian Esteve, a Renault senior vice president, assured Putin on Monday that he "can rely on Renault" because the company "feels socially responsible" for AvtoVAZ's plight, in comments carried by Russian news agencies ITAR-Tass and Interfax.

Putin said at the meeting that Renault wouldn't bear the full burden, with the other AvtoVAZ shareholders expected to pitch in to help prevent the company's collapse.

"We cannot let this happen," Putin said, RIA Novosti reported.

AvtoVAZ has announced layoffs of a quarter of its 102,000 work force as demand flags for its Lada sedan.

Putin said earlier the Russian government has protected Renault's interests by providing hundreds of millions of dollars in loans this year.

Renault paid $1 billion for its stake in early 2008. Russian Technologies, a sprawling state-controlled conglomerate, retains another 25 percent. Investment bank Troika Dialog also has 25 percent, and the remaining quarter is floated on the market.

AvtoVAZ President Igor Komarov said Monday that most of the 27,600 layoffs will affect those who qualify for a pension.

Those being dismissed are be entitled "to the full corporate pension and to decent existence," he said in comments carried by the state-run ITAR-Tass news agency.

Putin announced in March that AvtoVAZ would get an interest-free long-term loan of 25 billion rubles (then $735 million) from Russian Technologies. He said Friday that these funds had been disbursed.

AvtoVAZ has said it plans to rehire 6,000 workers by 2012 for a new production line that it is developing with Renault.

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