‘Do more harm than good’: Is Koch Industries right to stay in Russia?
- Koch Industries is one of America’s largest manufacturers with over 300 sites in the US and approximately 100 globally; the company processes fuels, electronic components, glass, foods, clothing, shelter, and many other basic life necessities.
- On March 16, 2022, Koch announced they would continue to run two glass manufacturing facilities in Russia. President Dav Robertson said Koch “doesn’t want to hand over the plants to the Russian government” for fears it would “do more harm than good.”
- Verizon, YouTube, JPMorgan Chase, Disney, and many others companies have recently cut ties with Russia amid the invasion of Ukraine.
- The United States, EU, and UK governments imposed sanctions on Russia limiting the ability to access $630 billion in international reserves, dual-use goods (chemicals and lasers), the Nord Stream 2 pipeline, and travel across countries.
- Russia invaded Ukraine on February 24, 2022, “unleashing airstrikes on cities and military bases and sending in troops and tanks” with condemnation coming from the US, Europe, South Korea, Australia, and other countries.
More than 400 businesses have already stopped their business dealings with Russia due to its unprovoked invasion of Ukraine. Still, Koch Industries has suggested this may not be the right approach. Firstly, Koch Industries are not sympathetic to Putin and have even condemned the Russian invasion, stating there is no justification for this war. The company was one of the first to provide financial assistance to employees and humanitarian aid to their families from Ukraine.
Additionally, the Kansas-based Koch firm only operates two industrial glass factories, which do not make any tools or equipment for the Russian military. Keeping the factory open seems like an obvious and viable solution. Likewise, Koch Industries still have 15 employees in Russia, and there is a great fear that closing the factory may lead to their false imprisonment under Putin. Already, a female American basketball player is being held on trumped-up charges, and the same could happen to Koch employees. Koch Industries also fear that pulling out of Russia may lead Putin to nationalize the business, which means everything the company has established and developed could now belong to the Russians for free. Russia has already threatened to expropriate the assets of foreign companies that have fled its market since the invasion of Ukraine. Just recently, Putin signed a law that now permits Russian airlines to take control of hundreds of the Western-built planes leased from international firms.
It is important to understand that Koch Industries have a very small business and overall impact in Russia, and departing may lead to more harm than good. Not all companies can afford to lose their assets by leaving Russia, but many innocent Russians stand to lose their jobs.
Koch Industry's statement that leaving Russia would do more harm than good is disingenuous. The corporation runs two small glass factories and employs about 600 people in Russia. This is a small operation that such a large company could easily move overseas or suspend for a short time.
Koch Industries has justified its decision to defy international consensus and continue operations in Russia by saying that leaving would harm its employees. While it is commendable the enormous conglomerate would care about the lives of its factory workers, pressuring Russia to end the conflict is ultimately more important. Pulling out of Russia and removing its jobs for average Russians would help put pressure on the Russian government. These former employees might ask themselves why all foreign employers are leaving the country when the messages they are receiving from their government are that the Russian army is peacefully liberating Ukrainians. Also, such a large company could find ways to furlough or support their employees during a suspension of work over a crisis of this magnitude.
It is not surprising that Koch Industries has decided to defy calls from governments to leave Russia as it has a long history of ignoring government regulations and instead choosing to pay fines if and when it has been caught. In fact, Charles Koch has made a long career of opposing any sort of government interference, in line with his extreme libertarian views. As one of the largest multinational corporations, Koch Industries is uniquely positioned to lead with vision. Unfortunately, Koch Industries is only interested in profit and takes no interest in sacrificing a small portion of its business to help the people of Ukraine, a morally reprehensible position.