Former GM Purchasing Chief Cleaning Up GAZ

Bo Andersson is tearing things up as chairman of Russian commercial-vehicle builder OAO GAZ Group, as he attempts to reform the company in order to face new competitive realities and weather the severe market downturn.

Demand for cars and light-commercial vehicles had been growing steadily in Russia before hitting the brakes in 2009, when volume was sliced in half to 1.5 million units from 3 million in 2008.

The outlook isn't encouraging. Anders-son predicts 2010 should hover around 1.7 million units. “Some forecasts say the market eventually will hit 4 million, but more realistic is a return to 3 million-3.5 million around 2012-2013,” he says at the Automotive News World Congress.

Andersson, a purchasing chief for General Motors Corp. prior to its bankruptcy last year, is cryptic about what might be next for GAZ in relation to GM and its Adam Opel GmbH operations. GAZ was a partner with Magna International Inc. in a proposal to take a controlling stake in Germany-based Opel, a deal that disintegrated in November.

GM's decision to keep Opel pulled the rug out on GAZ's efforts to make a quick move into the car business, and Russian officials remain angry with the U.S. auto maker, Andersson says. But he says GAZ continues to talk to Opel “every day” in hopes of some sort of deal.

“We would welcome Opel back,” he tells journalists. Andersson doesn't elaborate, but in his presentation he says GAZ's main manufacturing operation in Nizhyny Novgorod offers a skilled workforce and wages that are one-third that paid in St. Petersburg and lower than in Mexico and China.