MAZ, MTZ, BelAZ, Gomselmash to face mass cuts

Experts forecast “staff optimisation” just after the “elections”.

The only anti-crisis strategy of Belarus' big automotive plants is the reduction in production to the level of sales and significant staff cuts. But the Belarusian authorities decided to provide financial aid to Minsk Automobile Plant (MAZ), BelAZ, Gomselmash and Minsk Tractor Plant (MTZ) to give them an opportunity to work without personnel cuts until the “elections”, Zavtra Tvoey Strany writes.

A decline in production of vehicles and equipment was 29.2% in the last 5 months. The decline rate is growing monthly.

As of May 1, total losses of sector plants exceeded 900 billion rubles, and the number of loss-making companies was 40% of the total number. Among the plants hit are core enterprises BelAZ, Minsk Tractor Plant and Gomselmash. MAZ was the most loss-making open joint stock company in Belarus in 2014.

Experts say the reason is export problems. They estimate production capacities of the country's automotive giants as excessive for the domestic market.

“MAZ's export more than 60% depends on Russia's demand, which reduced by half due to sanctions in comparison to the same period of 2014,” a survey by Belarus in Focus reports. “Sales of MTZ and Gomselmash depend on the amount of government subsidies for the Russian agricultural sector. Russian agricultural companies don't receive enough financial resources from the state this year due to the budget deficit.”

According to experts, the best way out of the critical situation would be a decrease in production to the level of current sales. BelAZ already reduced production of dump trucks by half, MAZ cut production of trucks 2.2-fold and Gomselmash decreased production of grain combine harvesters by almost 6 times.

“Such a significant decrease in production requires respective cuts of workforce,” experts note.

Taking into account the negative social and economic situation in the country, the Belarusian authorities are not ready to allow considerable staff cuts. Experts forecast that excessive jobs will be kept at the cost of the further growth of losses that the state will partially compensate by means of issuing loans and granting subsidies from the state budget

The staff “optimisation” will be continued after the “elections”, because sales in the automotive industry are unlikely to resume in the the short and mid-term future.

Many plants introduce short working weeks or make workers take unpaid leave. Charter97.org received complaints from such enterprises as Gomselmash, the Automobile Units Plant in Asipovichy, the Concrete Products Plant in Svetlahorsk, the Tractor Parts and Units Plant in Babruisk, Mogilevtransmash, the Minsk Tractor Plant, Gomeldrev, the Minsk Bearing Plant, Belarusian Railway, Vitebsk Products company and others.