These companies continue to do business in Russia

The list of companies that continue to operate in Russia shrinks per minutebut dozens of companies, including multinational manufacturers and hotel chains, continue to operate in the country despite strong public pressure to withdraw due to its invasion Ukraine.

McDonald’s was among the big companies announced this week temporarily closes its 850 restaurants in Russia. Cola-Cola and PepsiCo fast followed their exampleas well as the restaurant chains Burger King, Papa John’s, Little Caesars and others.

Caterpillar cited “supply chain disruption and sanctions” for its March 9 decision to suspend operations at its Russian production facilities. “We recognize that this is a time of incredible uncertainty for our esteemed employees and we will continue to look for ways to support them,” said construction and mining equipment manufacturer.

The Peoria, Illinois-based company opened its first office in Russia in 1973 and has a spare parts distribution unit in Moscow and a production plant in Tosno, near St. Petersburg. Russia accounts for 8% of Caterpillar’s annual revenue, or about $ 4 billion, according to Jeffrey Sonnenfeld, a professor of management at Yale University.

More than 30 major companies “remain in Russia with significant exposure,” according to a current report updated daily by Sonnenfeld and his team.

The purpose of the companies’ call is to force them to cooperate with the US government and its allies who have imposed financial sanctions on Russia, Sonnenfeld told CBS News. Government sanctions “rarely succeed on their own – they need a fairly universal support from the business community to truly paralyze an economy as it is intended,” he said.

For example, starting in the 1980s, a combination of financial sanctions and an extensive corporate withdrawal from South Africa, led by General Motors, helped undermine the country’s apartheid system of institutionalized racial segregation, Sonnenfeld said. He also said he heard from CEOs frustrated with the boards of directors who were trapped in a mental disorder of the 1990s where we thought, “Well, we have to find a middle ground here.”

“There is no middle ground here,” said the professor on Russia’s war in Ukraine.

Companies expressing “humanitarian concerns about general Russian citizenship” lose the meaning of sanctions, which only succeed when “the tyrant is no longer a successful totalitarian,” Sonnenfeld added.

Still here

The big companies that choose to maintain their presence in Russia include Illinois Abbott Labs. Among the companies condemning the war, Abbott said on March 4 that it would donate $ 2 million to humanitarian groups offering aid to Ukraine. The multinational medical device and healthcare company did not mention Russia or its activities in the country in its statement.

The direct sales giant Amway employs at least 500 people in Russia, bringing in about $ 200 million in revenue for the company, which follows a multilevel marketing business model. Michigan-based Amway said it “regrets the war and the devastation in Ukraine” in a March 4 statement.

There are 21 property and operating licensees Dunkin ‘Donuts in Russia, where the coffee and sweets brand is based in the Canton of Massachusetts returned in 2010 after 11 years of absence.

Also on Sonnenfeld’s list is a manufacturer of tires and rubber products based in Tokyo. Bridgestone rubber. It maintains production plants in Russia, but the extent of its activities in the country is unclear.

American agricultural trade giant Cargill It generates $ 1.1 billion in revenue from Russia, which has 2,500 employees. “The events unfolding in Ukraine are heartbreaking,” the private company wrote on Twitter on February 27. “It is difficult to understand the challenges facing employees, customers and their families in the area in the coming days and weeks. Our first priority is their safety and that is why we have closed some locations.”

Citigroup continues a pre-announced exit of consumer banking in Russia, the New York-based banking giant said on March 9. ”

This includes helping corporate clients in Russia, including many US and European multinationals, as they suspend or expand their operations, Citi said. “With the Russian economy in the process of disconnecting from the global financial system as a result of the invasion, we continue to evaluate our activities in the country.”

Citi has $ 9.8 billion in domestic and cross-border exposure in Russia, according to a regulatory filing on February 28. This is a much larger share of Wall Street rivals, such as Goldman Sachs and JPMorgan Chase, both of which announced their departure from Russia on March 10.

General Mills – the manufacturer of Cheerios and other packaged foods based in Minneapolis – has a joint venture with Nest called Cereal Partners Worldwide, or CPW, which operates in Russia. CPW had $ 118 million in sales for General Mills last year, less than 1% of the company’s total sales, which stood at $ 18.1 billion in 2021.

CPW has suspended capital investment in Russia and “we will continue to be in close contact with Nestle as the situation develops,” a General Mills spokesman emailed March 10.

Nestle announced on March 9 that it had suspended capital investment and advertising in Russia, but would continue to sell “basic” food products in that country. “As a food company and employer, we also have a responsibility to the people of Russia and to more than 7,000 of our employees – most of whom are locals,” the world’s largest food company said in a statement.

Multilevel marketing company Herbalife Nutrition receives 2.7% of its revenues from Russia and Ukraine.

Hotel chain Hyatt On March 9, it said it was suspending development and new investment in Russia and would “continue to evaluate hotel operations in Russia.” Hyatt said in a statement on March 4 that it was “devastated by the devastation” in Ukraine and had set up a relief fund for colleagues in the area who needed relief and relocation assistance. Hyatt still operates six locations in Russia, according to Sonnenfeld.

Echoing this attitude, the rival hotelier Marriott on March 8, she updated her statement expressing concern over the humanitarian crisis in Ukraine and neighboring countries, saying she was working with charities to help. The international chain has at least 10 locations in Russia.

Chicago-based global advertising company Leo Burnett has an office in Moscow and its Russian clients are the Russian digital service provider Rostelcom.

Fast food giant Subway said it would redirect any profits from its Russian activities to humanitarian efforts, noting that about 450 stores in Russia are owned and controlled independently by local franchisees.

However, being among the recorded extreme values ​​causes calls on social media metro boycott and more on that.

“The Russian invasion of Ukraine has highlighted the crossroads of risk, reputation and revenue,” said Paul Washington, executive director of the ESG Center at the Conference Board. “For many companies, the decision to sever ties can be relatively easy. Given the size of the Russian economy, there may be little revenue. be important. “

Crypto united front?

Some cryptocurrency companies also withstand the pressure to close Russian accounts, despite February 27 appeal by the Deputy Prime Minister of Ukraine “asking all major cryptocurrencies to block the addresses of Russian users”.

Kraken CEO Jesse Power responded by saying that “despite his deep respect for the Ukrainian people”, his company would not freeze the accounts of Russian customers unless required by law to do so.

The largest cryptocurrency exchange in the world, Binance, blocks the accounts of Russians in the western lists of financial sanctions, but not of Russians in general. “We are not going to unilaterally freeze millions of innocent user accounts,” CEO Changpeng Zhao wrote in a March 4 blog post.

Coinbase On March 4, CEO Brain Armstrong wrote on Twitter that “ordinary Russians use encryption as a lifeline.” However, the company will comply with any bans imposed by the US government, he added.

Coinbase’s attitude is in line with those of other cryptocurrencies, including Kraken, KuCoin and Coinberry.

In:
• Ukraine
• Russia