Dusseldorf Lars Brzoska, head of the intralogistics specialist Jungheinrich, is calling for the toughest sanctions against Russia, which should not be dropped “until this war is over and the Russian regime has turned around”. The top manager said that in an interview with the Handelsblatt. “Peace and freedom are more important than economic interests. That’s why we have to stop energy imports from Russia now,” he said.
The family company from Hamburg, founded in 1953, employs a total of 18,000 people, 600 of them in Russia and 80 in the Ukraine. The group, which is listed in the MDax, had a turnover of 3.81 billion euros worldwide in 2020. Most recently, the company itself stopped all business with Russia and Belarus. According to Brzoska, too many companies are still legally able to maintain business relationships there.
The chairman of the board justifies his clear stance with the information he receives from his managing director in Ukraine. The manager tries to reach his team every day: the calls are about whether the employees are still alive. “I can tell you, if you have such conversations, then you don’t care about the business for the time being,” Brzoska explained. Accordingly, work in Ukraine has come to a standstill.
The CEO is annoyed that Jungheinrich has not yet felt the economic impact of the sanctions imposed on Russia. Not even the decoupling from the international payment system: “The Swift shutdown was hailed and praised as the sharpest sword. But because we don’t have business relationships with the few sanctioned Russian banks, it doesn’t affect us.”
He calls for a different approach from company leaders in the event of war than in a crisis situation, above all from an ethical point of view. The companies would have to make a contribution and “use their leverage”.
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Read the full interview here:
Mr. Brzoska, you have decided on a comprehensive ban on exports to Russia and Belarus. They shouldn’t be delivering anything there anyway, right?
That’s it, we are hardly affected by the sanctions. Our industry, intralogistics, can continue to deliver. And there are simply far too many companies and industries that, like us, are allowed to deliver or provide services with almost no restrictions. What we have experienced so far in terms of sanctions is far from sufficient.
If you are not affected by the sanctions yourself, isn’t it cheap to call for tougher sanctions now?
No, on the contrary. We have opted for a complete ban on exports, although there are no sanctions that oblige us to do so. We take responsibility and want to set an example. We hope that as many companies as possible will do the same.
Are you also unaffected by the Swift shutdown?
No. That’s something that really annoys me. The Swift shutdown was hailed as the sharpest sword. But because we don’t have business relationships with the few sanctioned Russian banks, it doesn’t affect us. From my point of view, that was far too short and inconsistent. After all, this is not a crisis, this is war.
And he demands a completely different approach from company bosses?
Yes. We need the toughest sanctions, which must not be dropped until this war is over and the Russian regime has turned around. The economy, i.e. we, have to make our contribution and use our leverage. However, the greatest lever of all is the import ban on Russian oil and gas. That’s where politics come in.
And you would accept high energy prices for that?
Russia must be cut off from the largest source of money funding this war. Even if it means high costs for us – for companies and for the public. Given what the people of Ukraine are going through right now, that’s a relatively small sacrifice.
Further background on the middle class in times of the Ukraine war:
What is Jungheinrich supplied with?
Of course, at Jungheinrich, like everyone else, we depend on oil and gas, and not just for heating. I would very much welcome alternatives to Russian oil and gas.
How badly are you affected by rising energy costs?
The majority of our products consists to a large extent of steel, the production of which is very energy-intensive. With the enormous increases in energy costs, of course, the manufacturing costs also increase.
Do you feel alone in your opinion on the sanctions?
No, many other companies have responded in the same way. Because what is the alternative? We must not allow Russia to be victorious in the end. This would be fatal for Ukraine and Europe and a fatal sign to the world.
In your opinion, did the federal government act too late or wrongly?
What I find shameful is the lack of courage, consistency and speed. I also elected this government. But she quarreled – first with the arms deliveries and then with the sanctions. Now I’m glad that the consequences are being drawn. In this country, we often discuss things for far too long and react too timidly. Stricter sanctions are made dependent on the further course of the war. But what’s going to get worse now? Germany and Europe must pull out all the stops to increase the pressure on Russia.
“The fear of economic damage and that many things could come to a standstill in Germany is still there.”
What do you ask of other companies?
The Russian President is speculating on the disagreement and fear. The West is now united, but the fear of economic damage and that many things could come to a standstill in Germany is still there. But fear is a bad advisor. Peace and freedom are more important than economic interests. That’s why we have to stop energy imports from Russia now. The alternative is that we finance a totalitarian state’s war against a sovereign and democratic neighboring country.
You also have a sales and service unit in Ukraine with 80 colleagues, what do you know about them?
Our greatest concern is for the employees and their families in Ukraine. We are in daily contact with the Ukrainian managing director. He tries to reach his team every day, but business has now come to a standstill. The calls are about whether they are still alive or not. Can you imagine that?
What is your mindset in these situations?
I can tell you that when you have these kinds of conversations, you don’t care about the business at first. Unfortunately, as a company, we can’t do much more than continue to pay our colleagues and organize help. Our branches in neighboring Eastern European countries are very active here. At group level, we have provided emergency financial aid and have now started a fundraising campaign. Every euro donated by our employees is matched by the company. We are currently in the process of organizing accommodation for relatives of Ukrainian employees.
The medium-sized company has stopped all business with Russia and Belarus. The Western sanctions don’t go far enough for the CEO – or they aren’t efficient enough.
(Photo: dpa)
If you no longer deliver to Russia, what will happen to your 600 Russian employees who work in sales and service?
Here, too, we have daily contact and promised support for our Russian team.
Will you then have to lay off the employees?
We try to support our Russian workforce. But the cuts that we are rightly making are having a noticeable impact on this unity. Without question, it suffers significant economic damage. We are working on different scenarios depending on how the war unfolds.
What role do the owner families play in your decision?
As always, we made our decision in close consultation with the Supervisory Board and also have the full support of the shareholder families.
Many entrepreneurs are now also looking to China.
We are currently still dependent on China. For example, because the country is one of the largest suppliers of lithium-ion battery cells. We are also looking in other directions and have to place procurement on a broader basis. It is clear that Europe has not yet been positioned well enough.
Mr. Brzoska, thank you very much for the interview.
More: These German companies want to hold onto business in Russia