By Toyosi Olajide
As hostilities in Ukraine continues into the seventh day, following Russia’s invasion into Ukraine since last week, precisely on the 24th of February, 2022, some renowned global brands have exited Russia, in addition to the growing number of sanctions countries are imposing on the nation.
From Apple to Google, to Boeing Airplane companies and petroleum Mobil Corporation Exxon, to Ford Motor Co. Among others, these brands have deferred operations in Russia in an unprecedented wave of action in solidarity with Ukraine.
Apple premium has said it has stopped sales of iPhone and other products to Russia and has joined a growing chorus of Western companies openly condemning Russia’s actions by making changes in its Map app to protect civilians in Ukraine.
US oil major Exxon said it would not invest in new developments in Russia and was taking steps to exit the Sakhalin-1 oil and gas venture, after similar moves to dump assets by Britain’s BP, Russia’s biggest foreign investor, and Shell Plc.
Ford joined other automakers suspending operations in the country. It said in its condemnation that the situation has compelled them to review their tasks in Russia. Daimler Truck has frozen its activities in Russia, while Mercedes-Benz Group is looking into legal options to divest its 15% stake in Kamaz as quickly as possible. General Motors said it would suspend all vehicle exports to Russia until further notice, and BMW also stopped shipments, adding it would halt production on the ground there.
Google, owned by Alphabet Inc. said it had blocked mobile apps connected to Russian state-funded publisher RT from its news-related features and barred RT and other Russian channels from receiving money for ads, reflecting a move made by Facebook.
RT’s mobile apps would be removed from its Windows App store and a ban ad on Russian state-sponsored media says Microsoft.
Aviation brands are not left out as Lufthansa’s Technik unit and AerCap Holdings, the world’s biggest aircraft leasing company, have stopped their services for Russian customers.
The sporting world has also been affected, with German sportswear company Adidas suspending its partnership with the Russian Football Union.
On the sourcing side of the market, carmakers such as Volkswagen, BMW and Porsche are struggling to obtain crucial wire harnesses as suppliers in western Ukraine have been closed by the Russian invasion, forcing them to curtail production.
Russian firms meanwhile have felt increasingly squeezed. Sberbank, Russia’s largest lender, said on Wednesday it was leaving the European market because its subsidiaries faced large cash outflows, adding that the safety of its employees and property was endangered.
Following this global boycott of the Russian market by brands, some observers of the unfolding situation and industry analysts argue that many of these brands are calling it quits because doing business in Russia is becoming increasingly difficult. This is as it has also been impossible for many companies to do business in Russia as measures have sent the Ruble plunging and forced the central bank to jack up interest rates.
Whatever the case this may be, Russia’s deepening economic isolation risks putting some progress made by these brands in this market into reverse, and cutting off an important market for international companies.