Gaz
GAZ is an open joint-stock company specializing in manufacturing cars and trucks, chassis, and parts and assemblies for motor vehicles. In 1994 it employed about 110000 persons and accounted for 15% of the output of cars and 27% of the output of diesel trucks in the Russian Federation. The company consists of the parent enterprise GAZ (in Nizhni Novgorod), 13 automobile plants previously included in the GAZ association, 2 investment and financial institutions (GAZ Invest and AvtoGAZbank), 2 marketing enterprises (GAZavtosbyt and GAZ ATO), 3 construction trusts, and a number of non-production facilities (trade center, sports complex, etc.) Tax revenue from GAZ makes up 20% of the Nizhni Novgorod regional budget.
The major shareholders of GAZ (as of November 1995) are workers (25% of shares), managers (20% of shares) and investment companies and funds (41% of shares). GAZ holds a 51% stake in each of its 13 automobile plants.
GAZ management plans to increase its 20% stake by buying additional shares from the company's workers. GAZ has also been buying shares in enterprises considered to be most essential for its production interests. GAZ has a rigidly centralized management system and a system of suppliers for whom GAZ is the only customer and over whom GAZ exerts close control. GAZ management considers these aspects of the company to be one of its key strengths.
GAZ has sought to change its production mix in response to consumer demand. While truck output as a whole has fallen, the production of light trucks (Gazelle) and cars (Volga) has risen. GAZ has also set up ventures with foreign partners to produce new diesel engines and improved paintwork.
Apart from restructuring production, GAZ is actively trying to improve its financial position through financial market operations. It invests only in short-term government debt and Treasury notes. It plans to raise additional working capital by selling automobile and housing bonds and by selling non-production facilities such as its trade center and sports complex. GAZ's financial operations have been highly successful. In 1995 10% of GAZ's net profit came from operations with securities.
Company-Government Relations
Under a Presidential Resolution issued on January 4, 1994, GAZ was given $325 million for the purchase of equipment and accessories. A project to establish a Nizhni Novgorod automobile financial and industrial group has been submitted for state approval. This group seeks tax privileges for its members.
Enterprise Restructuring in the FSU