This March 24 update builds on Dave’s March 16 email to employees.
Over the last week, you likely have seen media coverage about Guardian’s glass business in Russia. I’m writing to share the details that much of the media have left out but are important for you to know. To be clear, Koch condemns the heinous actions of the Russian government in Ukraine, and shortly after learning of the invasion, Guardian suspended all new capital investments in Russia.
It is important to clarify why Guardian continues to operate these glass facilities. The health, safety and well-being of all Koch company employees is our top priority. As I wrote last week, abandoning the Guardian plants in Russia would put our employees there at greater risk and do more harm than good. This is true for multiple reasons.
Russian officials have threatened to punish local employees of manufacturing facilities that shut down. Specifically, the General Prosecutor’s Office in Moscow has warned foreign companies that shutting down their operations may lead to criminal prosecution of local employees, including up to seven years’ imprisonment. Russian First Deputy Prime Minister Andrey Belousov publicly issued the same threat to foreign companies considering exiting the country. We take these threats – and our commitment to our employees – very seriously.
The Russian government has also stated that it would seize and continue to operate manufacturing facilities that are abandoned or closed. It’s important to note that glass plants cannot simply be shut off, as they are furnaces that typically run continuously for more than 20 years before being torn down and rebuilt. They do not turn on and off like a light switch.
If Guardian were to walk away from these glass facilities, it would give full control of the assets to the Russian government, who we believe would keep them running and capture 100% of the financial benefit.
Finally, and contrary to false assertions, Guardian's operations do not aid the Russian war effort. None of the glass produced at the facilities in Russia is for military use. Eighty percent of the glass produced at these facilities is for residential, while the remainder is for office and commercial buildings.
This is an extremely volatile and uncertain situation in which we will continue to make decisions that we believe will avoid causing harm to our employees or Ukraine. This includes complying with all applicable sanctions, laws and regulations. We will closely monitor the situation and modify our decisions as circumstances warrant. We certainly understand that others will make decisions that are appropriate for their particular situations.
Dave Robertson is the president and COO of Koch Industries.
See Dave's other communications on the crisis in Ukraine to Koch employees on March 1, March 10 and March 16.