WASHINGTON – Companies with investments in Russia – such as General Electric and Boeing – are growing concerned as the United States prepares to impose tougher sanctions over the crisis in Crimea that may spur retribution against corporate interests.
American companies are the largest source of foreign investment in Russia, primarily in technology and financial services, according to a 2013 report by Ernst & Young. Business interests in the country have been growing after the nation joined the World Trade Organization in 2012, the analysts said in their report.
General Electric Co., whose GE Capital Aviation Services unit is the world’s largest aircraft leasing company, has 54 airplanes in Russia and is tracking developments closely.
Hopefully the industry can weather it out, avoid heavy sanctions, said Norm Liu, chief executive officer of GECAS, General Electric Co.’s aircraft leasing unit, in an interview last week at an International Society of Transport Aircraft Trading conference in San Diego. This is a unique situation for all Western businesses.
If the conflict between President Vladimir Putin and the West is confined to diplomatic circles, he said he’s less concerned.
For corporations, additional restrictions present two risks: They could inadvertently punish U.S. interests, and the Russians could push back against American companies.
They are worried about retaliation, said William Reinsch, president of the National Foreign Trade Council, a Washington-based group that advocates on behalf of companies operating globally. The Russians have been pretty clear that if we do something to them, they will hit back.