Ford is suspending its joint venture operations in Russia following the Ukraine invasion.
(Photo : PAUL ELLIS/AFP via Getty Images)
On Tuesday, March 1, Ford announced that it has decided to suspend its joint venture operations in Russia following President Vladimir Putin's invasion of Ukraine. The U.S. auto giant has already informed its joint venture partner Sollers of the decision to halt operations in Russia until further notice.
Ford issued a statement, saying it is deeply concerned about Russia's invasion of Ukraine and the resultant threats to peace and stability. Ford added that the ongoing situation in Ukraine had compelled them to reassess their operations in Russia, which now focus exclusively on sales in the country through a minority stake in the Sollers Ford joint venture and commercial van manufacturing.
The company also announced that it would be donating $100,000 to Global Giving Ukraine Relief Fund through its Ford Fund. That donation will be used as humanitarian aid to help assist Ukrainian families and citizens who have been displaced in the ongoing war. Global Giving is a non-profit organization based in the United States that helps provide a global crowdfunding platform for grassroots charitable projects.
Ford's Russian operations take another huge hit
Ford has a storied past in Russia. The Dearborn company was the first international automaker to launch vehicle assembly in the country, opening a plant in St. Petersburg back in 2002. Ford then bolstered its operations in Russia in 2011, setting up a joint venture with Sollers that year.
It was not all smooth sailing for Ford in Russia, though, as it suffered huge economic losses during that decade. Ford sent shockwaves across the auto industry when it announced in March 2019 that it would close three Russian factories as part of its corporate restructuring plan.
That decision by Ford to pull out of passenger vehicle manufacturing in Russia caused heavy job losses in the country. Ford opted to shut down its vehicle assembly plants in Naberezhnye Chelny and St. Petersburg and its engine plant in the town of Yelabuga.
Ford Sollers employed around 3,700 people at that time, but the company did not specify how many job cuts were made. As part of the restructuring, Sollers assumed majority control of the partnership with Ford, with the Russian company grabbing a 51 percent stake.
Ford's Transit manufacturing in Russia on hold for now
As per Detroit Free Press, Ford continued to have a presence in Russia, with the company shifting its focus to the more lucrative commercial Transit vans. Ford hailed the Transit during a 2019 announcement as the top-selling, non-domestic commercial vehicle nameplate with a segment market share of 15 percent in Russia.
Ford Sollers CEO Adil Shirinov said at the time that the company's Transit lineup was the leader among foreign commercial vehicle brands in Russia. Shirinov added that the Ford Transit has tremendous potential for further profitable growth in Russia in the years ahead. Those plans are on hold now with Ford's decision to suspend its operations in the country.
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