By on March 24, 2022

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.]

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50 Comments on “Auto Industry Assets Could Be Seized by Russian Nationalization...”


  • avatar
    SCE to AUX

    “The report says automakers always knew nationalization was a possibility”

    Russia is probably a lost cause for at least a year (or 5, 10?), but I’ll bet the mfrs are now worrying about that regarding China/Taiwan.

    Real, actual communists wouldn’t hesitate to nationalize foreign assets.

    • 0 avatar
      Astigmatism

      I don’t think there are any real, actual communists left outside of North Korea. I also think it’s going to be decades before the business world is dumb enough to think of Russia as a worthwhile investment again.

      • 0 avatar
        Veeg

        And that is a shame considering how much capitalism is failing as a fair and equitable system for most.

        • 0 avatar
          Astigmatism

          Capitalism is rotten in many ways, but kleptocratic capitalism is worse.

        • 0 avatar
          jeanbaptiste

          Go back to jalopnik. Don’t come here and spread your hate and lies.

          • 0 avatar
            dal20402

            This argument is pointless because you all mean different things by “capitalism.”

            Does it just mean a privately controlled, non-centralized system of business? Then ScarecrowRepair’s first clause is right.

            Does it mean the specific version of that system we have in the US, which has been largely captured by large business interests at the expense of small ones and workers? Then Veeg is right.

            Does it mean an ethic of every man for himself, where it’s OK to deceive people and use market power to exploit them because “it’s a free market, man?” Then Astigmatism’s second clause is right.

            A well-regulated free enterprise system is the best system in the world. A poorly regulated one can be no better or worse than a centrally planned one—the difference is just whether plutocrats or cadres are the winners at everyone else’s expense.

          • 0 avatar
            SoCalMikester

            go back to quebec and eat your pootin

        • 0 avatar
          ScarecrowRepair

          Capitalism lifted billions out of poverty while socialism was murdering 100 million civilians outside of wars.

          Meanwhile, millions of people in poor countries try to emigrate to capitalist countries, not communist ones.

          • 0 avatar
            Veeg

            You got a source on those numbers or is it just a dumb thing people say when they have no argument?

            ps capitalism is literally killing earth.

          • 0 avatar
            Art Vandelay

            Yeah Veeg…source 1…the Southern US Border you fncking twit

          • 0 avatar
            ScarecrowRepair

            @Veeeg — you want a source?

            A. Industrial revolution

            B. Mao murdered 60 million, Stalin 40 million, Hitler 15 million.

            C. The Berlin Wall, the Warsaw Pact mines and fences to keep people in, all the Arab refugees throughout Europe, and the Central Americans trying to get into the US.

            All these are incredibly easy to verify. Now let’s see yours.

          • 0 avatar
            Mike Beranek

            “Capitalism lifted billions out of poverty while socialism was murdering 100 million civilians outside of wars.”

            You’ve failed to acknowledge the millions of “outside of wars” deaths that capitalism caused. Coal mining all by itself accounted for a majority of those.
            How about something in the middle? Maybe we should temper our rabid capitalism with a small dose of empathetic socialism. There is no reason why a balanced system cannot produce extreme wealth whilst also preventing anyone at the bottom from falling through the cracks.

          • 0 avatar
            ScarecrowRepair

            @Mike Beranek — You’ve failed to acknowledge that socialism dirtied the planet far more. Check out the enlightened ex-Warsaw Pact countries when they dumped Communism. Compare East Germany with West Germany when the Berlin Wall fell. Compare Russia’s pollution when the USSR fell with any western country. Compare China now with any western country. Compare Venezuela and Cuba with any other country. Compare North Korea with any other country.

            Socialism has a miserable track record. No matter how bad capitalism was and is, it’s better than any socialist country ever.

          • 0 avatar
            Mike Beranek

            Replying to your reply below.
            Your history seems to be pretty recent. You might want to know that capitalism has killed many millions more than communism, simply because it’s been around a lot longer. Some examples-
            Coal miners ground into dust
            Slaves on sugar plantations in the Caribbean
            Slaves on cotton plantations in the American south
            Chinese immigrants out west building the railroads
            Not to mention what went on in the Belgian Congo, Henry Ford’s South American rubber factory, or the Triangle Shirtwaist fire.
            All of the above are deaths caused by capitalism. And it’s still going on today, as people are dying while mining the rare-earth metals Elon Musk needs for his vanity project.
            And never forget that NAZI Germany was a system whereby the government was controlled by those who own the means of production, which is the definition of Fascism.
            It is true that capitalism has created a whole lot of comfort for a whole lot of people. But it also has created more death and misery than communism over it’s very long history.
            So as I said, a capitalist system WITH A DOLOP OF SOCIALISM, like for example in Sweden or Norway, is the right choice.

          • 0 avatar
            FreedMike

            This while “socialist versus capitalist” argument misses the point, I’d say.

            A) “Socialism”, as seen in the USSR or Maoist China, is nothing more than dictatorship with a fancy name. Ditto for North Korea. The only time we’ve seen actual communism is on TV – namely, “Star Trek.” And the only reason communism works on “Star Trek” is that technology eliminated scarcity of everything – food, housing, medicine, transportation, you name it. In a world where stuff is scarce, communism inevitably fails – it causes the class divisions that communism itself seeks to eliminate.

            B) Nazism allowed and encouraged private enterprise and wealth accumulation, so it can’t be confused with a system like the USSR, which most definitely did NOT allow private ownership of assets.

            C) There are plenty of highly socialist countries that do not behave like the USSR. Have you seen Sweden or Finland invade their neighbors, start famines for the heck of it, or build concentration camps? No.

            In the end, the Big Three Murderous Regimes – Nazi Germany, the USSR, and Maoist China – were all dictatorships. Nazi Germany was pro-capitalist, and the USSR and China were anti-capitalist. Today, Russia and China are both capitalist, and they’re both still autocracies with zero freedom who like to threaten their neighbors.

            I’d argue that problem, therefore, isn’t “capitalism” or “socialism” – it’s authoritarianism, which can be capitalist (as is the case in Russia and China today), or anti-capitalist (North Korea).

          • 0 avatar
            Jeff S

            Russia never really had Socialism or Communism in the purist sense it was always a dictatorship that was Communist in name only. Putin would like to return to the good old days of the USSR just don’t call it Communism.

      • 0 avatar
        dal20402

        You spelled “Twitter” funny.

        • 0 avatar
          Arthur Dailey

          @ArtV: Mexico is a capitalist nation. So your comment actually undercuts your belief.

          And while I may disagree with some of your comments, I generally enjoy them. Except recently you have posted a couple of quite insulting/below the standards of this site personal insults.

          • 0 avatar
            Art Vandelay

            Don’t you have some more rejoicing to do over unvaccinated people dying Arthur Daily?

            You slide your little insults in. I’m just putting them out there for all. Feel free to read em’, not read em’ or go fnck yourself.

            Now I am off to try to score some real estate deals from stupid people that couldn’t pay and got evicted.

  • avatar
    Jeff S

    Lada, the Volga, the Zil, the Uaz, the Gaz and the Mosckvich Soviet made cars at their best. There will definitely be waiting lists for these quality vehicles.

  • avatar
    Lou_BC

    Oh, how the chickens are coming home to roost!

    The western “democratic” world chose to ignore the perils of dealing with totalitarian regimes. Too much money to be made along with kleptocratic billionaires hiding their wealth in western countries and tax havens.

    I do not feel sorry for any corporation enmeshed with Russia. China will be next and is a much bigger mess to contend with.

    • 0 avatar
      Jeff S

      GM might want to eventually import these Russian made cars especially since GM is into outsourcing. Slap a Chevy emblem on that Volga for the latest Chevy crossover and put some ventiports on the side with a tri shield and you have the latest model from Buick.

    • 0 avatar
      EBFlex

      “The western “democratic” world chose to ignore the perils of dealing with totalitarian regimes.”

      I am surprised you are not defending Russia and encouraging working with them.

  • avatar
    Bill Summers

    “aiding a country with inferior technology that’s waging an unpopular war”
    HAHAHAHAHAH
    Sure, the vast majority of the Chinese people, a country of more than 1.4 billion people, support the peacekeeping operation in Ukraine.

    But some anchors on MSNBC and a few moronic Americans don’t like it. So it must be ‘unpopular’!

    • 0 avatar
      MrIcky

      Your argument is that the war IS popular then, both in America (except for those who watch MSNBC) and in China?

      Please, go on…

      • 0 avatar
        Bill Summers

        The vast majority of actual humans, worldwide, support the Russian peacekeeping operation. Obviously, that doesn’t include most Americans, because patriotic ammurricans are lower forms of life than cockroaches.

  • avatar

    I heard on youtube that Western companies “temporarily” stop/pause/close doors in Russia. What that means I do not know but they claim (bloggers) that e.g. Ikea or Toyota have no plans leaving Russia for good. It is PC to declare closing Russian operations.

  • avatar
    Varezhka

    Well, Renault is screwed, given Russia made up for 18 percent of their total sales last year. Not that I have much pity for the firm given they increased investment in Russia even after the Crimean invasion.

    What’s up with the French automakers and totalitarian governments? (looking at Iran)

  • avatar
    Kendahl

    Putin would do it out of spite if nothing else. Whether it would do Russia any good is a another question. Remember that, when Germany was building the MB 300 SEL 6.3, Russia was building junk. I doubt that products from a nationalized factory would be up to European quality.

  • avatar
    MitchConner

    If China doesn’t back off with its support of Putin, I have no problem if a couple dozen container ships full of rubber dog crap from there accidentally sink in international waters daily until they do.

    As for Russia, they can all go back to driving Trabants for all I care. Spoke with the guy who ran Ford’s Russian operations a few years ago. He’s CEO of their Pro business unit now. Sounded about as fun as sticking your head in a steamship’s paddlewheel as it heads up the Mississippi.

  • avatar
    pmirp1

    Imagine how bad it gets when China attacks Taiwan and we are forced to make decisions not to do business with China. At that point, this country won’t have much left to buy at Home Depot, iphones, or so many other household and electric goods. Entire companies like Hobby Lobby and Walmart go out of business.

    We did this to ourselves. First government made it possible to trade with China giving them most favored state status, then all our corporations move business and outsourced overseas, as corporations do for cheapest cost (peril of free enterprise).

    Fact is, Covid was just a wake-up call, when we ran out of masks and health care supplies. The Russia thing is nothing compared to what will happen with China when trade with them comes to a halt. GM will go bankrupt. Will Europe then support America like America is supporting Europe in this little skirmish with Ukraine?

    Frankly speaking, Ukraine is being destroyed. West trying to sanction Russia to stop them from doing this. And the rest is just side effect of west sanctions, like Russia taking over leased air planes, or automobile factories and assets. It is a sad state of affairs and west is just as guilty as madman Putin at where we have arrived.

    • 0 avatar
      Jeff S

      Agree we have done this to ourselves and if we boycott China we won’t have any consumer goods to buy and components and replacement parts for our vehicles. Thrift shops and salvage yards would do a thriving business. We have done this to ourselves.

    • 0 avatar
      Lou_BC

      @pmirp1 – trading with totalitarian regimes is never good. It will eventually bite you. The USA and every other free and democratic country went there due to profits. There are those that argue that markets should be “free and unregulated”. That’s bullsh!t. If one lives in a relatively free and just society, we should only trade with those that have similar views about freedom and justice. The worship of “profits above all else” and “everyman for himself” has gotten us to this point.

      • 0 avatar
        Arthur Dailey

        And Karl Marx accurately predicted all of this. Capitalism has no morals and no loyalties except to profit. If a corporation can increase its profit by sourcing from a nation that is a dictatorship with no employment, safety or pollution controls, then so be it. We increase our profits and our bonuses.

        The other aspect that many forget about capitalism is that it is anti-competition. As a corporation increases in size it strives to reduce its competitors by buying them out, merging or engaging in practices such as industrial espionage, penalizing any suppliers who do business with their competition or like Rockefeller engaging in predatory pricing until their competition leaves the market.

        That is why government intervention/controls are necessary. Tariffs, regulations, safety testing/requirements, consumer protection laws and competition/anti-price fixing/monopoly regulations.

        Unfortunately since circa 1980 with the Reagan/Thatcher/Mulroney triumvirate and the the fall of the Iron Curtain the ‘free marketers’ have largely held sway and removed/destroyed much of the above controls/protections. And now the pigeons are coming home to roost.

        • 0 avatar
          Jeff S

          @Arthur–True but I would also add that Capitalism and Free Enterprise are not the same thing. As you stated in Capitalism a business puts their competition out of business or buys them out and once a business has a majority of the market you raise prices (i.e. John D. Rockefeller and Standard Oil and Andrew Carnegie). For a while Capitalism can benefit consumers with lower prices but once a company gets the majority share of the market then there is no incentive to maintain lower prices. Free Enterprise in the truest sense would encourage competition for the benefit of the consumer and maintain competitive prices. True Capitalism eliminates competition and is not for the overall benefit of the consumer. The USA has some Capitalism and some Socialism but neither in the purist form. Government programs such as Social Security and Medicare have benefits for many but they are socialistic by their very nature. Big Energy, Big Food Processing Companies, and Big Lumber Milling Operations control most of their markets and set pricing which is a form of Capitalism. I am not espousing Socialism or Capitalism just stating what they are.

  • avatar

    Perhaps someone else has said this, but if Russia seizes assets – so what? No components available for specific models – no vehicles can be assembled. Couldn’t each manufacturer just ‘black list’ any product coming out of Russia by not fulfilling any warranty work and/or refusing to service product produced in the country? Consequently the only place the vehicles could be sold would be inside Russia and that would only be with whatever support could be derived internally. I’m probably naive on this, but it sounds doable.

    • 0 avatar
      Astigmatism

      The biggest worry _would be_ IP theft, but unlike China, Russia doesn’t have a history of successfully stealing other countries’ IP and building anything with it, outside of its nuclear program. Somehow I don’t think Mercedes is all that worried about having to compete against a Russian-made C-сорт.

  • avatar
    FreedMike

    Oh, those Russians….

  • avatar
    swester

    Sort of sad to watch yet another paranoid Russian dictator wreak havoc on his own people in the death throes of his regime. History rhymes yet again.

  • avatar
    Imagefont

    So a country run by a ruthless, murderous dictator might steal stuff when it’s in his best interest. I’m shocked! Shocked I tell you!

  • avatar
    vent-L-8

    Author Ayn Rand predicted this way back…

  • avatar
    SoCalMikester

    good. you wanna do bizness with the baddies? expect your stuff to get jacked. coulda opened shop ANYWHERE else, but their employees dont ask for much

  • avatar
    gregtwelve

    Capitalism vs Socialism:

    “A businessman cannot force you to buy his product; if he makes a mistake, he suffers the consequences; if he fails, he takes the loss. If bureaucrat makes a mistake, you suffer the consequences; if he fails, he passes the loss on to you.”

    Ayn Rand

    • 0 avatar
      Lou_BC

      I prefer a more simple version.

      In capitalism, man exploits man. In socialism it’s the other way around.

    • 0 avatar
      Astigmatism

      “A businessman cannot force you to buy his product; if he makes a mistake, he suffers the consequences; if he fails, he takes the loss.”

      Ayn Rand, of course, was not around in 2008 to see millions of people lose their houses and their jobs because of mistakes made by businessmen who had long since cashed out and observed the whole thing with an air of detached bemusement from their beach houses.

  • avatar
    ToolGuy

    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)

  • avatar
    ToolGuy

    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])

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