July 24, 2024

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Koch Industries planning ‘exit strategy’ for business in Russia

Koch Industries is working on an “exit strategy” for its business in Russia, after previously saying that employees at its glass factories in the country faced personal risks if it pulled out.

The company, headed by political mega-donor Charles Koch, would join hundreds of other multinationals, many that halted operations in Russia early on during its war on Ukraine.

President and Chief Operating Officer Dave Robertson sent a company-wide memo on Thursday telling employees it is developing an “exit plan” for Guardian Industries after an attempt to completely shut down its factories led to threats against its employees from the government.

Koch Industries has one company in Russia, Guardian Industries, which operates two glass factories with 600 employees. The company also employs an additional 15 individuals outside of Guardian.

Robertson previously sent out multiple statements condemning Russia’s actions in Ukraine, but adding Koch Industries would not pull out of the country because it could harm the safety of its employees and cause the factories to fall into government hands.

The company said employees have been threatened by the government with jail time if Guardian Industries ceased business, and the Russian government would take over the facilities and reap the financial benefits.

However, the company is now leaving the country due to new sanctions and actions from Moscow, according to Robertson.

“Sanctions announced in early April, combined with the Russian government’s response and other actions, have made conditions untenable for Guardian to continue operations in Russia,” he wrote, without specifying which sanctions and actions he was referring to.

A spokesperson for Koch Industries told The Hill the specific actions that drove their decision were banking sanctions from the Biden administration that made it difficult to pay workers and purchase supplies in Russia, and proposed legislation in Russia that would make it illegal for companies to comply with sanctions from other countries.

When the company signaled its intent to close down operations, the government began threatening employees with jail time again, Robertson said in the memo.

Now, the company “is working with its local management team to find an exit strategy that maintains our commitment to employees’ safety and does not result in the Russian government taking over the plants and financially benefiting from them.”

Guardian has halted new capital investments in Russia while all other Koch Industries’ companies have shut down or are currently ending business activities in Russia.

Koch Industries says it has given $1.85 million to groups assisting Ukrainian refugees and employees who have been financially affected by the war.

Updated: 3:35 p.m.

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