Conti resumes production in Russia to protect local workers

HANOVER, Germany—Continental A.G. has restarted production temporarily at its passenger tire plant in Kulaga, Russia, in an effort to keep local workers safe.

According to German newspaper Frankfurter Allgemeine Zeitung and Reuters, the tire maker said its "employees and managers in Russia face severe criminal consequences should we refrain from serving local demand."

According to another recent Reuters report, companies halting production or pulling out of Russia could face the country’s bankruptcy law, which could be used to seize assets or even lead to criminal penalties.

Conti said the move did not impact sanctions imposed on Russia for its invasion of Ukraine.

The company said tires were made for civilians "as a matter of principle" and was not done to drive profits.

Conti said "the basis for this step is the duty of care for our employees in Russia."

See our full and ongoing coverage of impacts from the war in Ukraine.

On March 9, Continental said it had suspended production of tires temporarily at its Russian, and halted imports and exports of products to and from Russia company wide.

The tire maker said at the time it was able to meet supply obligations "at the moment" but that supply for raw materials might evaporate "in light of the sanctions imposed and the further worsening of logistics bottlenecks."

Conti's move to resume production follows Nokian P.L.C.'s decision to continue operating its passenger car tire production plant in Vsevolozhsk, Russia, while "actively looking for additional capacity" elsewhere.

Nokian said it was maintaining control of its factory amid President Vladimir Putin's threats of nationalization.

In late February, Nokia, Finland-based company said they were moving main production lines from Russia to Finland and the U.S., a process already in place prior to the war.

Nokian said it has accelerated those efforts. All tires sold in the Nordic countries in the future will be produced in Nokia, and all tires sold in North America will be produced in Dayton, Tenn., as well as in Nokia, the company said, saying it aims to become "geographically more diversified in its manufacturing operations."

Meanwhile Pirelli throttled back its activities in Russia, amid the ongoing war in Ukraine and continued supply-chain disruptions in the region, and has set up a "crisis committee" to monitor ongoing developments there.

In a statement linked to the release of its fiscal 2021 financial results, Pirelli said, "Activities of the factories in Russia will be progressively limited to those needed to guarantee the financing of salaries and social services for employees in Russia."

Pirelli operates two plants in Russia: one in Kirov, in the western part of the country, and another in Veronezh, in southwestern Russia.

Pirelli announced it has donated $550,000 to help Ukrainian refugees stricken by the war.

Michelin announced in mid-March that it was suspending its industrial activity in Russia—including suspending production of passenger tires and truck retreads at its factory in Davydovo, where it employs 750—as well as halting exports to the country.

"In this very difficult and uncertain context, Michelin's priority is to support all of its employees who are impacted by this crisis, including its Michelin Russia employees," the company said.

Michelin said it "remains fully mobilized and will continue to adapt its decisions as the situation evolves."