This is what happens to German companies in Ukraine

“The situation is an enormous burden for the companies and employees on site,” says Alexander Markus, head of the German-Ukrainian Chamber of Industry and Commerce. Around 2,000 companies with German participation are active in the country, employing around 50,000 people. The local companies fear for their lives, combined with concern for their business premises.

At the Persil manufacturer Henkel, which employs 600 people at four locations in Ukraine, one employee died as a result of the war. The building of the air conditioning specialist Viessmann in Kyiv was “completely destroyed by the bombs of Putin’s armed forces,” explains company boss Max Viessmann. Other German companies have not yet reported any fatalities or damage or do not want to comment.

The vast majority of Ukrainian employees remain in the country. Chamber chief Markus knows from conversations with companies: “Many employees don’t want to leave Ukraine at all, they want to be there for their country.” The companies have tried to accommodate their employees in the west of the country, where the risk is lower. According to warnings from the Foreign Office, German employees had already taken the company out of the country before the outbreak of war.

The chemical group BASF, which employs 220 people in two offices in the country, says that “some employees and their family members” have crossed the borders. And the port group HHLA, which operated a container terminal in Odessa on the Black Sea until the outbreak of war, helped 120 relatives of Ukrainian employees flee to their headquarters in Hamburg.

However, the companies cannot evacuate all employees. Male Ukrainians between the ages of 18 and 60 are not allowed to leave the country because they can be drafted into military service. A few of them also include local employees of German corporations.

metro keeps markets open

While many German companies are keeping their locations closed, Metro opened 17 of its 26 stores in Ukraine on Wednesday. The local management decides which shops to open on a daily basis based on the security situation. Trucks bring staple foods, water and hygiene items to the stores. “We are trying to keep this up for as long as possible,” it says.

Düsseldorf employees and relatives have evacuated from some cities, such as the embattled Mariupol. The contact of the crisis management to the remaining employees in the city is currently “not reliably guaranteed”. The wholesaler employs a total of 3,400 people in Ukraine.

Due to the war, companies like Metro work under very difficult conditions. Telephony and the Internet are becoming increasingly unreliable in the East, reports Chamber Chief Markus. There are also problems in logistics: Because deliveries fail, the necessary work materials are often missing.

In any case, suppliers from the EU would only deliver goods against prepayment. The problem: “Since the foreign currency exchange in Ukraine is closed to prevent the outflow of foreign currency, local companies cannot make payments in euros,” says Markus. So there is no delivery at all.

The family company OBO Bettermann acts as well as possible under these conditions. The sales team there has moved from Kyiv to more rural regions and is working from a laptop, reports Managing Director Ulrich Bettermann. The manufacturer of fastening material from Menden, Sauerland, welcomed the first relatives of Ukrainian employees to its headquarters. The training center was converted into temporary accommodation.

In any case, German companies are very willing to help. Most companies, such as the intralogistics specialist Jungheinrich, continue to pay their employees’ salaries. Knauf immediately transferred three monthly salaries. Henkel provides all refugee employees with accommodation at the company’s expense, and the Heraeus technology group has matched donations from its German employees, Metro workers from Ukraine’s neighboring countries have taken in refugees privately and are organizing aid transports.

Many German companies are involved in both Ukraine and Russia – often to a much larger extent in Russia. Support is also needed for their employees there. Because deliveries have stopped, they can no longer work at full capacity. If the war in Ukraine and the associated sanctions last longer, Russian workers will lose their jobs and companies will be expropriated if they withdraw from the country.

Ukraine might not be so attractive for investments anymore

The war fundamentally called Ukraine into question. According to the Chamber of Commerce, before the Russian invasion, it had received more serious investment inquiries from German companies than it had in a long time. “Ukraine has significantly lower purchasing power than neighboring countries,” says Markus, head of the chamber. Companies in the country were able to produce at significantly lower costs. Markus expects many of them to remain committed should Ukraine win the war.

Not everyone is so optimistic: According to industry circles, the auto parts supplier Leoni, which has expanded its capacities in recent years, is considering relocating production to countries such as Romania, Bulgaria, Serbia and Turkey in the meantime. Leoni has investments in two locations in Ukraine. Henkel does not want to “make any statements about the long-term presence at the moment”.

BASF, on the other hand, is “not questioning its commitment”, and HHLA also wants to resume operations at the terminal in Odessa “as soon as possible”. And Knauf wants to start up operations “as soon as this is possible without risk”. The family business wants to contribute to the reconstruction of the country.
Cooperation: Florian Kolf, Axel Höpner

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