German car parts supplier Continental AG (CONG.DE) has temporarily resumed tyre production for passenger cars at its Russian plant in Kaluga, it said on Tuesday, to protect local workers who could otherwise face criminal charges.
Continental said the move was aimed at meeting local demand and in line with sanctions imposed on Moscow for its invasion of Ukraine, which Russia calls a “special military operation”.
“Our employees and managers in Russia face severe criminal consequences should we refrain from serving local demand,” said Continental, adding that its products were made for civilian use as a matter of principle.
Continental, which on March 8 said that production at the plant had been suspended, did not elaborate on the potential charges staff might face.
“In order to protect our employees in Russia from prosecution, we are temporarily resuming the production of passenger tyres for the local market at our tyre plant in Kaluga if necessary,” it said.
Continental said resumption in production was not a profit-driven decision.
Finland’s Nokian Tyres (TYRES.HE) warned this month that EU sanctions will make it hard to sell tyres in Russia, although in March it said its decision to hold onto its factories gave it control over where the tyres are sold.
Around half of the raw material used to produce its tyres in Russia came from outside the country, it said.
Italy’s Pirelli (PIRC.MI) has halted investment in Russia and curtailed its plants there. Pirelli makes around 10 per cent of its global tyre output in two Russian factories.
President Vladimir Putin said in March that Russia could seize assets of companies that abandon their operations there.
Russian prosecutors have also warned some Western companies that their employees could face arrest if they shut production of essential goods, a person familiar with the matter said.
REUTERS