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The Corporate Exodus Is Simply Overwhelming (Russia)

Posted by Craig Reaser on March 08, 2022 - 7:33am


The number of western companies suspending operations in Russia continues to increase. Last week, Swedish furniture giant Ikea closed all its stores in Russia, as well as in its ally Belarus. It has also stopped sourcing from these countries. Sweden's other global mega-retailer, H&M has also closed its stores in Russia. Not only will furniture soon be harder to find in Russia...so will cars. German automaker Volkswagen, BMW and Mercedes-Benz stopped exports to Russia, and perhaps even more damaging, have stopped local manufacturing in Russia. Closed plants obviously equals Russians out of a job and without income because of a war they didn't ask for. Japanese automakers Honda Motor and Nissan have also stopped exporting to Russia. Honda cited the obvious problem that is really hard to get paid for any product the company sends in. American automaker Ford Motor has also suspended its JV  that makes commercial vans in Russia.    Meanwhile Spotify has closed its Russian office and removed content from RT and Sputnik from its service, following a lead of tech giant Alphabet (GOOGL) and Apple (AAPL), who has already punted these services from their App stores. Streaming provider Roku (ROKY) has also pulled RT off its service.    Oil giant ExxonMobil (XOM) has followed Shell (SHEL) and British Petrolium (BP) in exiting its Russian JV, as anticipated.  Last night, 3/7/2022, two major U.S. accounting firms-KPMG and PricewaterhouseCoopers-both announced they would be exiting their Russian operations...And this morning, their rivals Deloitte and Ernst & Young followed suit.  Also yesterdy, American Express (AXP) joined rival credit card processors Visa (V) and Mastercard (MA) in suspending Russian operations.  Boing (BA) announced that it has suspended operations in Moscow, which includes maintenance, parts, and technical support. Rival Airbus has done the same. Given most airlines-and I presume Russian ones are no exception-only carry a few weeks' worth of spare parts on hand, these actions will be crippling to the Russian air travel industry. Of course, with airspace closed to Russian-owned airlines, international flights were already facing major cancelations. But now it will soon be impossible for much internal, domestic travel to take place.    Everyday Russians will have trouble not only getting their hands on dollars, but replacing TV's, cars, phones, and furniture that breaks, and even visiting friends and families in other cities. Not surprisingly, reports abound on Twitter of Russians rushing to the border trying to get out. 

M H Thank you, Craig, in our news already referred for several of these businesses leaving Russia.
March 8, 2022 at 12:30pm
Simon Keighley Worrying times ahead, Craig - there seems to be a domino affect of western companies suspending operations in Russia - it will be interesting to see how this plays out. Thanks for sharing.
March 8, 2022 at 9:10am