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Western companies' pullout from Russia expected to accelerate
Banks, airlines, auto makers and film producers have joined the fray to punish Russia.
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A pedestrian looks at the fog covered skyscrapers of Moscow's International Business Centre in Moscow, Russia, on Nov. 2, 2021.
(AFP/Dimitar Dilkoff )
M
ore Western companies are expected to pull out of Russia on Tuesday, as corporations and investors across industries follow the lead of energy firms BP and Shell that abandoned multi-billion-dollar positions after the invasion of Ukraine.
Leading banks, airlines, auto makers and more have cut shipments, ended partnerships and called Russia's actions unacceptable. Many more said they were considering action.
Late on Monday, Warner Bros. said it pulled this week's release of 'The Batman' from Russian screens, following an announcement from Walt Disney Co saying it would pause the release of theatrical films in Russia.
Meanwhile Mastercard said it had blocked multiple financial institutions from its payment network as a result of sanctions on Russia.
The West has moved to punish Russia with a raft of measures, including closing airspace to Russian aircraft, shutting out some Russian banks from the SWIFT global financial network, and restricting Moscow's ability to use its US$630 billion in foreign reserves.
"I would expect to see a slew of similar announcements over the next few days," Sonia Kowal, president of Zevin Asset Management in Boston, said on Monday, adding that divestment by Norway's big sovereign wealth fund would support the move.
Some United States (US) state-linked investors have been vocal in setting expectations for corporations.
"We need to send a very clear and unequivocal response that California will not stand for Russia's aggression," California Treasurer Fiona Ma said on Monday in statement declaring support for divesting Russian assets from the state's pension funds, some of the largest in the US.
Shell, BP and Norway's Equinor all said they would exit positions in energy-rich Russia, putting pressure on other Western companies with stakes in Russian oil and gas projects, such as ExxonMobil and TotalEnergies.
Many companies are still considering options, such as shipper Maersk, which on Monday said it was monitoring sanctions against Russia and preparing to comply with them. One scenario included suspending cargo bookings.
Major auto and truck makers have cut off exports to Russia, including Volvo and GM, although together the two companies only sell about 12,000 vehicles a year in Russia. Ford Motor, which has a 50 percent stake in three Russian plants, has not commented substantively on its plans beyond saying it is aiming to manage impact on its operations and keep workers safe.
Companies and asset managers eager to liquidate stakes face barriers because many exchanges have halted trade.
Some Western companies with major exposure to Russia already have seen shares drop. Finnair, based in Russia neighbor Finland, lost a fifth of its value after withdrawing its 2022 outlook amid airspace closures.
Airlines are bracing for lengthy blockages of east-west flight corridors after the European Union and Moscow issued airspace bans.
The White House has not made a decision on barring Russian flights, though White House press secretary Jen Psaki, speaking to reporters on Monday, noted, "There are a lot of flights that US airlines fly over Russia to go to Asia and other parts of the world and we factor in a range of factors."
Senator Dick Durbin, the second-highest ranking Democrat in the US Senate, voiced his support for a ban.
"Other countries have done it in Europe and turning the lights out at the airport on those guys isn't a bad idea," he told reporters.
Big tech companies are juggling calls to shut services in Russia with what they see as a mission to give voice to dissent and protest.
Meta Platforms Inc, the parent company of Facebook, will restrict access to Russian state media outlets RT and Sputnik on its platforms across the EU, the company's head of global affairs said on Monday, in line with similar moves by major US tech companies.
