Volkswagen is offering compensation to employees who voluntarily quit their jobs at a plant in Russia, the German automaker has said as sanctions related to the war in Ukraine take hold.
The factory in Nizhny Novgorod belongs to the GAZ Group, whose co-owner, Oleg Deripaska, has been placed under sanctions by Western countries.
A temporary exemption initially allowed for continued operations at the factory, but it was not extended, according to a company statement.
Volkswagen said on June 9 payoffs were being offered to around 200 people working at the plant and its partnership with GAZ had now come to an end.
The offer to employees includes financial compensation and medical insurance lasting through the end of 2022.
The world's second-largest car manufacturer announced in March that production at the Nizhny Novgorod plant and another in Kaluga would be suspended until further notice because of Western sanctions. Vehicle exports to Russia were suspended immediately.
While Volkswagen owns its Kaluga plant, employing around 4,200 workers there, it does not own the Nizhny Novgorod plant but had a contractual agreement with GAZ Group to assemble several of its models there, according to the Volkswagen Group's website.
Russian President Vladimir Putin said on June 9 that foreign companies that had left Russia will regret their decision.
"In today's conditions, when someone jumped off somewhere, left, chose to stop some activity here, they will regret it," he said at a meeting with young entrepreneurs in Moscow.
"They will regret it, not because we threaten anyone," Putin continued. "They will regret it because Russia is a country with great potential, really."