The Moscow government is again saving the legendary ZIL. Together with Sberbank they plan to establish the assembly of Korean and Italian cars. The plant had more interesting rescue plans

The legendary automobile manufacturing plant named after Likhachev (ZIL), which had been dying virtually since the collapse of the USSR, began to be saved again . The Moscow government, as the main shareholder of the plant, agreed with Sberbank to create a joint venture to assemble Fiat and Hyundai cars at ZIL facilities.

What will come of this? Over the past decade, a huge number of different ways have been invented to breathe life into a dying plant, or at least into the territory that belongs to it. Forbes recalled the most interesting ZiL revival projects and their results.

*Itar-TASS*
New ZIL: small and cost-effective

In 2005, ZiL made an attempt to once again become a successful automobile plant solely on its own - simply through good and competent management. And also due to its rather large territory. An official declaration of intent was adopted: it was planned to reduce the production area several times, selling part of the land and renting out part of the premises. This was supposed to help pay off debts, which at that time amounted to 6 billion rubles. ZIL was going to raise car production volumes from a measly 15,000 cars a year to at least 50,000 (in Soviet times, 250,000 were assembled here). By 2007, management promised to make the plant profitable, and by 2010, net profit was expected to be about $80 million a year.

The premises were indeed rented regularly, the land was sold no less regularly, but this did not affect production results in any way. It was only possible to adjust the ebb of the bells and barriers. After the resignation of Yuri Luzhkov, ZiL General Director Konstantin Laptev soon lost his post. The new head of the capital, Sergei Sobyanin, said the following about him: “ZiL has shown billions of losses in recent years, people have not been paid salaries for months. At the same time, the director of the enterprise himself received an annual salary of 250 million rubles.”

*Itar-TASS*
Limousines for the political elite

In the spring of 2010, the head of the Russian Presidential Administration, Vladimir Kozhin, said that the country's top leadership wants to switch from foreign cars to domestically produced cars. Especially, he emphasized, the establishment would be interested in cooperation with ZiL. After some time, the cult Italian studio Pininfarina became interested in the idea, ready to develop a unique design for the limousines of Vladimir Putin and Dmitry Medvedev.

The Italians, however, were thrown out of the equation quite quickly: representatives of the head of state’s administration soon announced that the plant would cope “on its own.” In the fall of the same year, ZiL was given the technical specifications, and the company’s engineers began to study it. “They delved into this in great detail, well done,” Kozhin praised the Zilov team. Then the enthusiasm began to wane. By the beginning of 2012, there was still no response from ZIL. “We have not yet received any clear proposals,” those responsible for the presidential garage complained last January.

*Itar-TASS*
Factory for yo-mobiles

At the end of May 2011, a few weeks after the start of Mikhail Prokhorov’s political career as the leader of the Right Cause, the Yo-Auto company confirmed its readiness to repurpose ZIL conveyors from producing trucks to Yo-mobiles.

Skeptics saw election rhetoric in the billionaire’s promises; Prokhorov’s representatives assured of the seriousness of Yo-auto’s intentions to develop the problematic territory. Along with the Moscow one, the company considered production sites in the regions and even abroad - in Kazakhstan, Belarus, Ukraine, the Czech Republic, Denmark.

Now, at the end of March 2012, no new plants have appeared in one of the most controversial projects of the Russian automobile industry, apart from the one being built near St. Petersburg. But Prokhorov himself went from a failed party leader to the third most popular politician in the country.

*REUTERS · 2012*
Chinese Foton in Nagatinskaya floodplain

In the fire-prone summer of 2010, in the city hall building on Tverskaya, ZiL General Director Konstantin Laptev signed a cooperation agreement with the management of the Chinese Foton Motor. Guests from the People's Republic of China presented the Russian capital with two hybrid buses and announced ambitious plans to build their own European division on the basis of the Moscow plant. The Chinese were ready to assemble up to 100,000 trucks a year at ZIL and expand from the Nagatinskaya floodplain to the markets of Western Europe. These intentions, as is regularly the case with Chinese companies, remained unrealized.

Foton reminded me of myself at the end of January 2012. The mayor of the city of Dzerzhinsk, Viktor Sopin, announced that the Chinese company is “considering the possibility” of creating its own production in the Nizhny Novgorod region. The project, he said, involves the production of heavy trucks and light commercial vehicles, as well as employment of 12,000 local residents.

*Itar-TASS*
Bodies for Renault made in Moscow

Relations between the Moscow government and the French company Renault began 15 years ago. In 1997, the Avtoframos joint venture was created, which was supposed to help Renault begin to conquer the Russian market. Avtoframos was engaged in the production of Megane passenger cars and did this in the Moskvich factory premises.

In 1999, ZIL joined Moscow-French relations. At the plant, Renault wanted to produce the Renault Kerax all-wheel drive construction truck and the Renault Premium tractor. They wanted to increase production to 20,000 cars per year.

The project with trucks did not take place for various reasons, but in 2005, within the framework of the same Avtoframos, Renault began to place the production of body parts at ZIL. It was assumed that the production volume of these parts would exceed 700,000 pieces per year, but this time everything stalled. In 2007, ZiL's revenue from cooperation with the French barely exceeded 10 million rubles - cooperation did not reach the planned scale.

*RIA Novosti*
Park of Culture and Leisure "ZiL"

The whole world has long figured out what can be done with the territory of abandoned city factories. They create complexes with restaurants, contemporary art galleries and spacious lofts in which it is fashionable to set up offices. In recent years, this trend has reached Moscow.

At the end of last February, the head of the capital’s Department of Culture, Sergei Kapkov, proposed using the ZiL territory to create a cultural center. “We see a theater and concert venue there, we see some exhibition spaces, we see creative laboratories there. We simply expressed our wishes for the technical specifications for architects. “Everything can fit there: campuses, and the scientific things that the Moscow Department of Science does,” was bursting with the popular metropolitan official ideas. The Moscow government, however, did not like the idea.

*RIA Novosti*
campus

In October 2011, the Higher School of Economics announced its desire to occupy the ZiL territory. HSE wanted to build dormitories there, erect educational buildings and sports grounds, that is, turn the plant into a classic university campus. Mikhail Prokhorov and Viktor Vekselberg were expected to be investors in the project. The idea did not find understanding in political circles.

“The real economy is being replaced by the training of economists who will make money out of thin air, which in the United States and throughout the world led to the famous crisis of 2008. We certainly need student campuses, but not on the site of industrial enterprises. It is necessary to develop education, but not at the expense of the complete destruction of industry,” Oleg Smolin, deputy chairman of the State Duma Committee on Education, summed up the initiative.

*Artem Holoshchapov for Forbes*
Vekselberg's Innograd for $3 billion

In June 2011, Viktor Vekselberg’s Renova became interested in the ZiL territory. The President of the Skolkovo Foundation proposed using 275 hectares in the Nagatinskaya floodplain for the construction of a miniature copy of an innovation city near Moscow. Vekselberg’s company was ready to invest up to $3 billion in the construction of a “research and implementation center for high technologies and housing for its employees.” The condition for the implementation of the project was the development of the entire territory at once.

The head of the development division of Renova, Veniamin Golubitsky, and the Deputy Mayor of Moscow, Andrei Sharonov, confirmed the fact of negotiations, but no specifics followed their statements.

New ZIL: small and cost-effective

Limousines for the political elite

Factory for yo-mobiles

Chinese Foton in Nagatinskaya floodplain

Bodies for Renault made in Moscow

Park of Culture and Leisure "ZiL"

campus

Vekselberg's Innograd for $3 billion

8 old and one new way to save ZIL