Russia's Deripaska says US sanctions could shutter auto maker GAZ

Russia's Deripaska says US sanctions could shutter auto maker GAZ

A general view of Russian tycoon Oleg Deripaska's carmaker GAZ plant in Nizhny Novgorod, with
A general view of Russian tycoon Oleg Deripaska's carmaker GAZ plant in Nizhny Novgorod, with which Deripaska says "a lot of partners have stopped working" AFP/Kirill KUDRYAVTSEV

NIZHNY NOVGOROD, Russia: Russian oligarch Oleg Deripaska is adamant that unless the United States lifts sanctions against both him and his company GAZ, the carmaker could be forced to close by the summer.

"Jul 4 is literally the last day this factory could work," Deripaska told journalists during an organised visit on Tuesday to the auto giant's sprawling plant in the industrial city of Nizhny Novgorod on the Volga river.

If the factory is not "able to return to normal business after Jul 4, then there is no chance it can survive", he said.

That is the date when the sanctions come fully into effect as a number of licences for extensions issued by Washington expire.

The 51-year-old billionaire is one of a number of oligarchs close to the Kremlin that have been hit with sanctions over allegations of Russian interference in the 2016 US election.

Deripaska's companies have also been targeted.

The US Treasury lifted sanctions against EN+ group, Rusal aluminium giant and EuroSibEnergo power company when Deripaska ceded control, but the businessman has yet to do so in GAZ, Russia's leading maker of trucks and commercial vehicles with 40,000 employees at 13 different sites.

Deripaska said he had signalled his willingness to cede control of GAZ, but the US authorities had not responded.

They had not given "any sign of what they want... There is no negotiation, that's the problem," he complained.

Russian tycoon Oleg Deripaska speaks to the media outside his carmaker GAZ plant in Nizhny Novgorod
Russian tycoon Oleg Deripaska speaks to the media outside his carmaker GAZ plant in Nizhny Novgorod about how he may be forced to shutter the factory due to US sanctions AFP/Kirill KUDRYAVTSEV

GAZ's vast factory dating back to the Soviet era is where President Vladimir Putin in 2017 announced his bid for a fourth Kremlin term.

The sanctions were already hitting the automaker - which already turned in heavy losses last year - hard, Deripaska said.

GAZ was able to weather a difficult period after the 2008 economic crisis thanks to tough efficiency measures brought in under the leadership of a former General Motors executive.

The sanctions were also hurting GAZ's cooperation with western companies, he said.

The group uses 30 to 40 per cent foreign-made parts and has licence agreements with German makers such as Volkswagen, Mercedes and Daimler.

"A lot of partners have stopped working with GAZ - like Daimler," Deripaska said.

In March, Deripaska filed a lawsuit against the US Treasury, accusing it of illegally targeting him with sanctions and causing his net worth to drop by US$7.5 billion, or more than 80 per cent.

Deripaska pointed out that the report by US special counsel Robert Mueller into allegations of Russian meddling in the 2016 presidential election - had found no evidence of collusion between Trump's campaign and the Russian government.

And he suggested that Putin would not be cowed by sanctions.

Source: AFP

Bookmark