Auto Industry Assets Could Be Seized by Russian Nationalization
The war in Ukraine continues to have ripple effects.
A new report from industry bible Automotive News suggests Vladimir Putin is considering seizing the assets of automakers who left Russia in the wake of its invasion of Ukraine.
Ford, Mercedes-Benz, Renault, Stellantis, and Volkswagen are among the companies that left Russia behind in the wake of the fighting. Putin is apparently proposing nationalizing these and other companies, using the euphemism “external management.” Isn’t it grand how corporations and governments can use neutral-sounding buzzwords to soften the blow of misdeeds?
This is all in response to sanctions that are causing Russia pain.
“If foreign owners close the company unreasonably, then in such cases the government proposes to introduce external administration,” Russian Prime Minister Mikhail Mishustin reportedly said this month, according to CNN. “Depending on the decision of the owner, it will determine the future fate of the enterprise.”
At least one analyst thinks there’s a risk Putin and company will make good on their threats.
“I think it’s a high risk,” Joe McCabe, CEO of AutoForecast Solutions, told Automotive News. “Putin’s not shy about walking away from an industry that supports employment in his country, that builds product for local consumers. There are high odds that companies that have left, or ones that are leaving, are nationalized for the sake of his country’s economy.”
There’s a lot of money at stake — Mercedes-Benz, for example, has about $2.2 billion dollars of assets at risk of seizure, including a plant that opened near Moscow in 2019.
Analysts point out that even if Russia seizes plants, it won’t be a simple matter to restart assembly lines. That’s because Russia is cut off from global trade and wouldn’t be able to source components.
Unless, of course, it got help from a friendly nation like China. But analysts also point out the Chinese might not help the Russians, since aiding a country with inferior technology that’s waging an unpopular war might not be in China’s best interest.
The report says automakers always knew nationalization was a possibility, which is why they’ve limited their production investments in Russia. Automakers also won’t be likely to feel too much of a financial pinch.
That said, a couple of OEMs might take it on the chin more than others. Russia accounts for 2.1 percent of global car sales, but it’s 5.7 percent for Hyundai and 7.8 for the Renault/Mitsubishi/Nissan alliance. There’s also this: Analysts say that even if the plants do restart production, it will be at a lower volume than normal because of — say it with me — Russia’s economic troubles.
[Image: Ford. Note: The plant shown is in Kansas, not Russia, and the photo is for illustrative purposes.]
Join the conversation
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- Jpolicke Twenty-three grand for a basket case? And it has '66 wheel covers and gas cap so who knows what else isn't original?
- Scott Can't be a real 1965 Stang as all of those are nothing but a pile of rust that MIGHT be car shaped by now.
- 56m65711446 So, the engineers/designers that brought us the Pinto are still working at Ford!
- Spookiness I dig it. The colors are already available on the CX-50. The terracotta is like a nice saddle brown. The non-turbo Carbon Edition has a bluish gray and a burgundy leather interior. A nice break from the typical relentless black and 50 shade of gray palette. Early CX-30's had some dark navy blue (armest, console, and parts of the door) but I guess that was just too weird and radical so they switched to all-black.I'd be fine with cloth in colors, leather is over-rated, but I'll never have an all-black interior in a car ever again.
- Haze3 Interesting vehicle but, really, it's not hard to be great at anything if cost is not a serious constraint. This is A LOT of cost.Second, it's no great trick to use a large battery to get large range. If the internet is to be believed, the long-range R1S runs a 135KWh pack vs. the I6 at 77KWh. That's going to add up to a big difference in running mass and charging times.
Top Gear (the real one) Season 12, Episode 6. https://www.motortrendondemand.com/detail/the-ultimate-ford-fiesta-review-featuring-the-royal-marines/9978/556 (Skip ahead to the 20 minute mark if you must)
If you have read down this far and are who I think you are, you might be interested in this: https://youtu.be/KJkmcNjh_bg https://youtu.be/Lem3enNkbV0 (There's more but you will find it on your own [if you can avoid distractions, as you have already demonstrated])