Russia: Ford joint venture cuts 700 jobs on falling sales and weaker rouble

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A joint venture between US carmaker Ford and Russian firm Sollers is cutting 700 staff at its plant near St Petersburg; that is 12 percent of the workforce.

The cutbacks come as sales have faltered in Russia with a slowdown in economic growth.

Sales fell five percent last year and industry groups are forecasting another weak year because of the fragile economy.

The weaker rouble is another factor Ford said.

It is down seven percent against the dollar this year as investors fear the effects of US and EU sanctions following Moscow’s annexation of Crimea.

The falling rouble reduces Russian consumers’ purchasing power and makes it more expensive for car manufacturers to buy parts from abroad.

Ford Sollers employs around 5,500 people around St Petersburg and in Tatarstan.

They make the Ford Kuga, Ford Explorer, Ford S-MAX, Ford Galaxy, Ford Transit and Tourneo Custom, as well as the Focus and Mondeo models in Russia.