Russia Signs Auto Plant Accord With GM

From Associated Press

Prime Minister Viktor Chernomyrdin took a test drive Thursday in a Chevrolet Blazer and then signed a joint venture agreement with General Motors Corp. to produce 50,000 of the vehicles a year in Russia.

“Good car,” Chernomyrdin said after a short spin near the main entrance to the Russian White House, or main government headquarters, where a few Blazers were presented.

The undertaking is the first joint venture in Russia with a Western auto company since the collapse of the Soviet Union.


“We are the largest company in the world, so it’s certainly appropriate that we invest in the largest country in the world,” Louis Hughes, head of GM’s international operations, said when the deal was signed.

General Motors said production could begin by the end of 1997 at a still-unfinished car manufacturing plant near the town of Yelabuga, about 900 miles east of Moscow in the Russian republic of Tatarstan.

The Blazers are expected to sell for about $24,000.

GM said the total investment for the project would be about $250 million. The American company has a 25% stake in the venture, with the government and regionally funded Yelabuga Automobile Works holding the remaining 75%.

The joint venture will create about 8,000 jobs around Russia, including at about 100 plants that will produce parts for the Blazer.

Initially, the venture will assemble Blazers from imported parts at Yelabuga. Ultimately, however, Russian companies that formerly served the defense sector will produce parts, allowing the venture to make compact cars as well, Russian officials said.