German companies : “business as usual” in Russia?

Status: 04/22/2022 08:16 a.m

Many Western corporations have stopped their activities in Russia. But in some companies, business continues as if nothing had happened. Among them are prominent German names.

By Angela Göpfert, tagesschau.de

Western companies that have stopped doing business in Russia have been dominating the headlines recently. However, more than 200,000 employees in Russia are still on the payroll of Western corporationsas the Financial Times reported. Many of them are on leave.

But some of them continue to go about their work “quite normally”, like before the outbreak of the Ukraine war. And there are quite a few Western companies that continue to do “business as usual” in Russia, as the long list by economics professor Jeffrey Sonnenfeld shows. In an overview that is updated daily, the expert from the US elite university Yale shows which companies have stopped their activities in Russia and which continue to do so.

The “pillory” of Yale University

Category F is the worst category. All those companies are branded here that “simply continue to do ‘business as usual’ in Russia.” It is a pillory list that also includes well-known German names. They include the MDAX group GEA, the SDAX-listed wholesaler Metro, the crane manufacturer Liebherr, the retail company Globus and the toy manufacturer Simba-Dickie Group.

The companies that end up on the F list must fear serious damage to their image. This is also shown by research by tagesschau.deafter which at least two German companies actively sought to be removed from the F-list.

Simba-Dickie Group wants off the F-list

One of these companies is the Simba Dickie Group. The company, based in Fürth, Franconia, produces and sells toys worldwide and stands for well-known brands such as Eichhorn, BIG (Bobby Car), Schuco and Märklin.

At the request of tagesschau.de The press spokeswoman for the Simba Dickie Group explained: “We have not been active in Russia since October 1, 2018. We do have a sales partner in Russia. But we have not been supplying them since the beginning of the war.” They are already in contact with Yale University so that the entry on the F-list will be deleted.

Thyssenkrupp gets a better grade

The example of Thyssenkrupp also shows that the division into the various categories at Yale is sometimes quite simple. The German steel group was also on the F-list for a long time, although it said it had stopped new business and all investments in Russia.

Yesterday, Thyssenkrupp suddenly moved up two notches (Yale does not give an E grade) in category C. Here you can find companies that are cutting back at least part of their business in Russia.

Globus fears forced nationalization

Meanwhile, retailer Globus continues to operate its grocery stores in Russia without restrictions despite the war in Ukraine. “As a grocer, we are responsible for providing people with a basic supply of food,” said Globus spokeswoman Isabel del Alcazar tagesschau.de.

But you also have a responsibility towards your employees: “We employ around 10,000 people in Russia, mostly salespeople and cashiers, i.e. completely normal people who do not belong to the country’s elite. (…) If we were to close, there would be many people suddenly unemployed and got into a personal emergency situation.” In addition, there is a risk of forced nationalization, according to del Alcazar. “Substantial assets would accrue to the Russian state.”

Continental feared “criminal consequences”

Meanwhile, Globus is not alone in fearing expropriation. The Kremlin recently threatened all Western companies that suspended their business in Russia because of the Ukraine war with “heavy consequences”. To the Wall Street Journal According to reports, Coca-Cola, McDonald’s, Procter & Gamble and IBM, among others, have been warned against the confiscation of assets and the arrest of those responsible.

Meanwhile, the DAX-listed company Continental restarted production at the tire plant in Kaluga, southwest of Moscow, citing “harsh criminal consequences” that threatened local employees and managers.

Liebherr feels an obligation to Russian customers

The reason given by the construction machinery manufacturer Liebherr for not stopping its business in Russia sounds far less dramatic. On request from tagesschau.de Liebherr explained: “We have given our Russian customers a performance promise and we also have an obligation to our employees in the country.” We continue to feel committed to both stakeholder groups and are therefore continuing business activities in Russia within the scope of the sanctions until further notice.

Liebherr is one of the largest German industrial companies in family hands. With 50,000 employees, the Swabian company manufactures construction machinery, aircraft parts and household appliances. In Russia, where Liebherr has been active since 1965, the company says it has 2,300 employees.

In Russia, Liebherr has two production plants in the Nizhny Novgorod region, a sales and service company headquartered in Moscow and nationwide branches.

Image: picture alliance/dpa

GEA and Metro do not want to stop Russian activities

Two other companies that find themselves in the F category on the Yale list wanted to join tagesschau.de did not comment and only referred to their earlier statements. GEA is “convinced that stopping its business activities would not affect those responsible for the war.” The company manufactures and services machines in Russia for the local production of basic foodstuffs, dairy products and pharmaceutical applications.

The Management Board of Metro AG also intends to continue operations at the Russian subsidiary. The wholesaler sees itself as responsible for the 10,000 employees in Russia.

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