On Tuesday it was the Dax companies Henkel and SAP. Numerous other companies from Germany had previously announced their withdrawal from Russia in view of the Russian war of aggression in Ukraine. And yet it is far from the case that the entire German economy has turned its back on Putin’s empire.
Other German companies are also sticking to their Russian business. Some openly, others remorsefully, some also rather hidden.
Is that still possible these days? Is that morally justifiable? Or isn’t it perhaps also understandable not to throw one’s own engagement overboard in a hurry? Our writers disagree.
Russian troops are shelling train stations and trains carrying refugees in Ukraine – and yet Siemens continues to repair railroads in Russia as part of its joint venture with a Russian oligarch who is on the sanctions list.
Moscow’s army is deliberately destroying power and water plants in the Ukraine – but Siemens Energy’s Petersburg joint venture with an oligarch who is particularly closely linked to Vladimir Putin and is therefore sanctioned continues to maintain turbines and power plants in Russia.
Moral? Apparently it doesn’t matter! Anything that is not expressly forbidden, some German companies carry on as if there were no Russian presidential war of aggression against Ukraine.
While Russian planes can often no longer take off due to the lack of spare parts due to sanctions, the trains of the Russian state railway continue to drive tanks, grenade launchers and other deadly offensive weapons to the border – with indirect help from German industry.
The reference to “ongoing contracts” cited by some companies is just as reprehensible as the arguments of the Metro group, for example, that it will continue to supply the Russian population with food. While Metro stores in Ukraine are being fired at and looted by Russian occupiers, the company would like its profit interests in Russia to be reinterpreted as a humanitarian gesture. Seriously?
The example of Linde is not much better: The EU is discussing an oil and gas embargo against Russia, but the southern German gas company is still sticking to its contracts with the Kremlin-affiliated Gazprom group.
Is everything that is (still) legal also legitimate? If campaigns such as the slogan “Square. Practical. blood” against the chocolate manufacturer Ritter Sport, which is still active in Russia, let sales in Europe plummet before German managers start to withdraw from Russia?
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They shouldn’t wait that long and stop all engagements with Russia immediately. There can be no more arguing now with fears of broken supply chains, maintaining dialogue with parts of Russia, or workplace arguments. Instead, German companies are also obliged to prove that morality and business do not have to be two contradictory words.
Managers have to live up to their moral responsibilities – also so that all those who have already pitched camp in Russia are not left out in the rain. Or to put it another way: If Obi, SAP or Henkel can shut down their business in Russia – then there is no reason to assume that others cannot do the same. If they wanted.
Cons: blanket judgments don’t help
By Michael Schepe
Two other German companies have broken up. Henkel and SAP announced on Tuesday that they would discontinue their business in Russia. The Persil manufacturer in particular was criticized.
It was invested in Russia like no other Dax group and, with its 2,500 employees there, achieved annual sales of one billion euros in the eleven Russian plants. Henkel CEO Carsten Knobel gave a mantra of reasons why the commitment to Russia could not simply be ended. They worry about the local management; it is feared that the Russian subsidiary would be expropriated in the event of a withdrawal.
All of this is not mentioned at all in Henkel’s Tuesday withdrawal report. But have these problems now been overcome? no way!
The German public is currently insulting companies that are still active in Russia. And celebrates all those who end their commitment. But this black and white logic is too simplistic.
Because while public pressure on companies to end their Russian business is growing in this country, Russian politicians are discussing several draft laws that will make it more difficult for foreign companies to withdraw. They are often no longer as draconian as President Putin announced.
But the local management of foreign companies with withdrawal ambitions are still threatened with prison camps of up to ten years. And a nationalization of the businesses is still a danger for companies like Henkel, which manufacture goods of daily use. Added to this is the responsibility for the employees.
It was precisely with such consequences that the Lower Saxony tire manufacturer Continental justified resuming production at its Russian plant in Kaluga after an interruption.
Managers of German companies would be naïve if they ignored all of this. For most German companies, given the weak ruble and the sanctions, doing business in Russia has long since ceased to be a question of profit – even if that is what social media like to suggest.
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What is also forgotten there: The withdrawal from Russia is by no means done with the closure of the office. It’s a months-long, complicated process, with pitfalls in the details. Even SAP is by no means uncompromisingly out of Russia. Contracts with major customers are considered complex and have long terms. Russian companies will therefore be able to use SAP technology for years to come – whether SAP wants it or not.
Of course, it is not possible to continue like this. For ethical reasons alone, companies have to take action, even if it is economically burdensome. But the public shouldn’t be too quick to judge either. The withdrawal from Russia is complicated – and does not fail across the board because of management’s greed for profit.
More: Henkel closes business in Russia