The Washington Post
Koch Industries to stay in Russia, says exiting does ‘more harm than good’
Andrew Jeong and Adela Suliman – March 17, 2022
Koch Industries, the American manufacturing giant that employs 122,000 people across the world, said Wednesday it would not exit its operations in Russia because doing so would put its “employees there at greater risk and do more harm than good.”
The multinational conglomerate’s presence in Russia is relatively small, its president and chief operating officer, Dave Robertson, said in a statement Wednesday. It has about 600 workers at its Guardian Industries subsidiary operating two glass-manufacturing facilities in Russia and an additional 15 people working outside Guardian but in the country, he said. “We have no other physical assets in Russia,” Robertson added.
Guardian Industries and its family of companies employ over 14,000 people in 26 countries and have bases in Rostov and Ryazan in Russia, according to its website.
Koch’s decision was disclosed after more than 400 global companies publicly announced plans to withdraw, suspend and scale back their operations in Russia because of its invasion of neighboring Ukraine. Consumer and social media campaigns to boycott such things as Russian vodka, classical music concerts and soccer have also added to public pressure on companies.
However, according to a list compiled by Yale management professor Jeffrey Sonnenfeld and his research team, Koch Industries is one of about 30 companies described as “digging in” and “defying demands” for an exit or reduction of activities in Russia. Others on the list include Reebok, Cargill, Halliburton, LG Electronics and food brands such as Cinnabon and Subway.
Oil companies including Shell, BP and ExxonMobil were among the first to cut ties with Russia, along with some banking firms and tech companies such as Apple and Google. Others, including McDonald’s and Coca-Cola, followed.
“The horrific and abhorrent aggression against Ukraine is an affront to humanity,” said Robertson, the Koch executive. “Principles always matter, and they matter most when they are under pressure.”
Robertson said Koch “will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them.” He added: “Doing so would only put our employees there at greater risk and do more harm than good.”
The company is complying with sanctions, he said, and will continue to provide financial assistance to employees and their families from Ukraine along with “humanitarian aid to those affected in neighboring countries.”
In an address to Congress on Wednesday, Ukrainian President Volodymyr Zelensky said: “Peace is more important than income.”
“All American companies must leave Russia . . . leave their market immediately, because it is flooded with our blood.” He urged American lawmakers to “take the lead” and “make sure that the Russians do not receive a single penny that they use to destroy our people in Ukraine.”
The war is posing a corporate quandary and testing the mettle of some of the world’s most powerful brands, as well as the long-held theory of international relations that countries that trade together don’t wage wars against each other.
Koch is among corporations such as Cargill, LG Electronics and Subway that have decided to stay in Russia. Many of those companies have issued statements expressing concern over the conflict, but Koch is one of the few that have opted both to stay and openly condemn the Russian government.
Koch Industries, based in Wichita, is the second-largest privately held company in the United States and has broad operations, including in energy, chemicals and electronic technologies. It is run and partly owned by Charles Koch, known for the millions he donated to conservative causes with his brother David Koch, who died in 2019.