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“Bailout” has become an all-too-familiar word as of late, but a brings an interesting (though not entirely positive) twist to the dreaded word. The goal of this particular bailout is aimed more at social stability than in creating a leaner and more competitive for the future. The bailout will focused ensuring employment of autoworkers by avoiding layoffs - in spite of plummeting demand.
Bailouts in the are conditional on eliminating massive amounts of debt, and wrangling major concessions from autoworkers. The no-strings-attached Russian package will undoubtedly bring stability in the short-term, but will the domestic industry be able to compete against foreign competitors in the long-term? It seems unlikely, but a recent wave of protectionist measures, combined with domestic consumers’ preference for affordable Russian cars might just mean that the nation will be able to maintain the status quo.
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