Western companies still operating in Russia are facing harsh criticism and calls for boycotts as that country’s invasion of Ukraine enters its fourth week.
But Koch Industries, owned by the influential right-wing billionaire Charles Koch, is staying, even though its interests there are relatively small compared to other Koch-owned businesses, and dwarfed by the size of other US companies that have left.
Koch’s CEO explained his decision in an open letter
Koch had not attempted to justify why it has not quit Russia until March 16, when Dave Robinson, president and CEO of Koch Industries, explained his firm’s position in a public statement on the company’s website.
“The horrific and abhorrent aggression against Ukraine is an affront to humanity,” his open letter begins. He notes that Koch “has provided financial assistance to employees and their families from Ukraine and humanitarian aid to those affected in neighboring countries.”
The statement also underscores how tiny Koch Industries’ interests are in Russia. Among the business ties it has there, Guardian Industries, a Michigan company that has two factories in Russia that make industrial glass and employ a combined 600 people, is the biggest. “We have no other physical assets in Russia, and outside of Guardian, employ 15 individuals in the country,” the letter states.
That might make one believe that it would be relatively easy to join the scores of businesses that have left. But Robinson writes:
While Guardian’s business in Russia is a very small part of Koch, we 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 (which is what The Wall Street Journal has reported they would do). Doing so would only put our employees there at greater risk and do more harm than good.
Koch’s statement raises questions
Critics of Charles Koch, who has spent enormous sums to support right wing causes, aren’t buying Robinson’s arguments. Other companies, including McDonald’s, have left Russia while still paying employees there. Firms with more to lose than Koch have decided that cutting economic ties to Russia is an effective strategy, knowing that Putin has threatened to nationalize foreign assets.
On the other hand, as the journalist Judd Legum notes in his Popular Information newsletter, Koch has signaled his willingness to support Russian businesses in the past without regard to human rights abuses in the country.