Russia’s Economic Isolation Deepens As More Companies Retreat
US Companies Exiting Russia
A number of major US corporations in the consumer products sector have announced plans to divest from Russian business interests or pull products from shelves. Apple (AAPL) cited its deep concern surrounding the invasion of Ukraine when saying it stopped selling iPhones in Russia. Ford (F) and US oil giant ExxonMobil (XOM) reported they were ending joint ventures in the country.
All of this is happening while economic sanctions are also making an impact on Russia’s economy. This has affected businesses’ ability to buy and sell products, secure financing, and complete deliveries. Meanwhile, Ukraine is a major exporter of auto parts, and that sector could be at risk of disruptions.
Volkswagen and Other European Companies
Automaker Volkswagen (VWAPY) reports it may need to close down its flagship factory in Germany later this month due to its inability to secure parts deliveries from Ukraine. This comes after production had been halted at a separate plant that focused on electric vehicles. Reports indicate wiring harness kits that help connect car components aren’t being delivered.
Other European companies have announced steps in response to Russia’s invasion. BMW (BMWYY) says it will no longer export cars to Russia. Oil giants Shell (SHEL) and BP (BP) have also announced plans to divest from interests there, potentially at a great cost.
Flow of Information, Shipping, and Food
It could soon be difficult to move products of almost any scope in or out of Russia. Maersk (AMKBY) and Mediterranean Shipping Company, the world’s largest shipping firms, are suspending services to Russian ports. Each company has said foodstuffs will continue to be imported.
Even the flow of information could be affected within Russia’s borders. Swedish telecom-equipment maker Ericsson (ERIC) and US computer company Dell (DELL) are halting shipments and sales within Russia. While the broader market is experiencing widespread volatility and uncertainty, many large businesses are issuing a clear and definitive response to Russia’s actions.
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