What companies have pulled back from Russia?
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8 min read . Updated: 06 Mar 2022, 06:53 PM IST - Western businesses such as Apple, Boeing and Volkswagen are re-evaluating operations in Russia after its invasion of Ukraine
Russia’s invasion of Ukraine has prompted many Western companies across industries to re-evaluate their businesses in Russia. Some have decided to suspend operations in the country, while others have decided to pull out entirely.
Companies have flagged concerns about the conflict, worries about the safety of staff and the complications of doing business in the country as Western sanctions increase. While the relatively small size of the Russian economy—and the perceived difficulty of doing business there—means most multinationals have limited exposure to the country, several have built up businesses there.
Here’s what some have said so far.
Autos
Ford Motor Co. suspended its joint venture with Russia’s Sollers OJSC and halted sales to the country, citing concerns over the invasion. “While we don’t have significant operations in Ukraine, we do have a strong contingent of Ukrainian nationals working for Ford around the world," the company said. The U.S. auto maker had diminished its presence in Russia before the conflict, now only focusing on commercial-van manufacturing and sales through its joint venture with Sollers, in which it holds a minority stake.
Volkswagen AG has suspended production of all vehicles at its factories in Russia, adding that it was already seeing “extensive interruption of business activities" in the country. In addition to idling its two Russian plants, VW said it would also halt exports of vehicles to Russia. The decision affects the company’s VW, Skoda, Audi, Porsche and Bentley brands. Last year, VW brands delivered 216,000 vehicles to customers in Russia, about 2.4% of the company’s world-wide sales, a spokesman said.
Toyota Motor Corp. has said it would suspend production in Russia until further notice, citing difficulty getting the parts it needs. Toyota builds the Camry sedan and RAV4 models in its St. Petersburg plant and manufactures as many as 80,000 vehicles a year. Most of the vehicles are sold in Russia. Toyota said it would also halt sales of imported vehicles in Russia.
Aviation
Boeing Co. has suspended parts and maintenance support for Russian airlines and halted its activities in Moscow. The plane maker has also temporarily closed its office in Kyiv and paused operations at its Moscow Training Campus. The company told customers they may face potential delays in aircraft repair and maintenance requests to its design centers in Russia and Ukraine.
Airbus SE said it has stopped providing support services to its customers in Russia in response to international sanctions levied by the European Union. The plane maker has also halted the supply of spare parts for its aircraft to Russian airlines in line with the new restrictions. Airbus operators in Russia include three of the country’s biggest: national flag carrier Aeroflot-Russian Airlines, S7 Airlines and Rossiya Airlines.
Airlines world-wide are altering routes and canceling flights to avoid Russian airspace, changes that will lengthen journey times and raise costs for carriers that were starting to bounce back from their pandemic misery. U.S. passenger carriers don’t operate nonstop flights to Russia, but United Airlines Holdings Inc. said it would stop flying over Russia on its route to India. American Airlines Group Inc. and Delta Air Lines Inc. also said they are steering clear of Russian airspace.
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Consulting
Accenture PLC said it was discontinuing its entire 2,300-people business in Russia. Rival consulting firms McKinsey & Co. and Boston Consulting Group each said they are suspending operations in Russia.
Consumer goods
Smirnoff vodka and Guinness maker Diageo PLC has suspended exports to Ukraine and Russia, saying the move was in the best interest of its staff.
Energy
British energy giant BP PLC said it would exit its nearly 20% stake in Russian government-controlled oil producer Rosneft, a move that came after it was pressured to unload the holding by U.K. officials. The company, which relies on Rosneft for roughly one-third of its oil-and-gas production, faces a potential loss of as much as $25 billion on the move. It isn’t yet clear how BP will exit its stake.
Exxon Mobil Corp. said it is halting operations at a multibillion-dollar oil-and-gas project in Russia and would make no further investments in the country following the attack on Ukraine. The U.S. oil giant said it was preparing to shut down production from the massive Sakhalin Island development in Russia’s Far East. Exxon owns a 30% stake in the project, alongside Rosneft, Japan’s Sodeco and India’s ONGC Videsh. The company said it is taking steps to exit the consortium.
Shell PLC said it would exit its joint ventures with Russian energy giant Gazprom PJSC and end its involvement with the Nord Stream 2 natural-gas pipeline project, which it helped finance.
Media
Some of Hollywood’s biggest movie studios, including Walt Disney Co. and Warner Bros., are delaying the release of highly anticipated films in Russia in response to the invasion of Ukraine.
Netflix Inc. said it has no plans to add any Russian channels to its service in the country, despite a regulation that would require the streaming giant to carry several Russian state-run broadcasters. The company, which launched in Russia just over a year ago, was informed in December it would have to comply with a new rule to distribute as many as 20 local news, sports and entertainment channels, according to a person familiar with the matter.
World Wrestling Entertainment Inc. said it is ending its partnership with Russian broadcaster Match and shutting down the WWE Network in Russia.
Retail
IKEA is closing all of its stores in Russia, stopping production in the country and halting all exports and imports to and from Russia and Belarus. IKEA brand owner Inter IKEA Group and store owner/operator Ingka Holding BV said in a joint statement that the war in Ukraine had already had a huge human impact, and was also resulting in serious disruptions to supply-chain and trading conditions.
Nike Inc. said it would temporarily close the stores it owns and operates in Russia, citing increasing challenges of managing its business. The sneaker giant said it would support its employees by continuing to pay salaries. There are about 116 Nike stores in Russia, according to the company’s website.
H&M owner H&M Hennes & Mauritz AB said it is temporarily pausing all sales in Russia. The Swedish fashion retailer has around 4,800 stores globally, of which around 170 are in Russia. The country is H&M’s sixth-largest market and contributed 3.6% of group sales in the most recent quarter.
The parent company of retailer T.J. Maxx said it plans to shed its Russian off-price retail chain Familia. TJX Cos., which paid $225 million for a 25% stake in Familia in 2019, said it may post a loss on the move.
Shipping and logistics
FedEx Corp. and United Parcel Service Inc. have suspended shipments into Russia amid the country’s invasion of Ukraine. The U.S.-based shipping giants had earlier cut off shipments to and from Ukraine and were preparing contingency plans for their Russian operations. Now, both have temporarily stopped delivering shipments bound for Russia.
UPS said that packages en route to Russia and Ukraine will be returned free of charge to the sender, if possible. “Our focus is on the safety of our people, providing continued service and minimizing disruption to our customers," UPS said in a service alert on its website. “UPS continues to closely monitor the situation and will re-establish service as soon as it is practical and safe to do so."
FedEx issued a similar service alert on its website. “We are closely monitoring the situation and have contingency plans in place," FedEx said.
The world’s biggest containership operators—A.P. Moller-Maersk A/S and Mediterranean Shipping Co.—said they would temporarily suspend services to Russian ports, including those far from the conflict in Ukraine. Maersk said it was halting bookings in light of the sanctions imposed on Russia. Maersk and MSC said they would continue to move foodstuffs to and from Russia.
Technology
Apple Inc. has stopped selling iPhones and other products in Russia, pausing all sales in the country and halting all exports into its Russian sales channels. The tech giant said it was supporting humanitarian efforts, providing aid for refugees and supporting its teams in the region.
Russia’s RT News and Sputnik News apps are no longer available for download through Apple’s App Store outside of Russia. The tech giant’s Apple Pay has been limited in Russia and it also disabled traffic and live incidents from its Maps in Ukraine.
Google has suspended all advertising in Russia, a move that came shortly after the country’s communications censor accused the company’s YouTube video service of spreading misinformation and stoking protests. The mandate covers YouTube, search and display marketing in Russia.
Google has also blocked access to Russian state-owned media outlets RT and Sputnik across Europe in compliance with an EU sanctions order.
“In light of the extraordinary circumstances, we’re pausing Google ads in Russia. The situation is evolving quickly, and we will continue to share updates when appropriate," the company said. Google has also started blocking ads related to the conflict that seek to take advantage of the situation and paused monetization of Russian state-funded media across its platforms.
Facebook owner Meta Platforms Inc. on March 4 said it was putting at least a temporary stop to running ads targeting users in Russia and wouldn’t run ads anywhere from advertisers within Russia. The move came after the Russian government announced that it had blocked access to Facebook within the country in response to restrictions it said the social-media giant placed on Russian media outlets.
Samsung Electronics Co. said it would suspend shipments of all its products to Russia. The South Korean tech company is the top seller of smartphones in the country, with a market share of roughly 30%, according to Counterpoint Research, which tracks handset shipments. Samsung also sells semiconductors and a range of consumer electronics in Russia.
This story has been published from a wire agency feed without modifications to the text
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