Deere Monitoring the Conflict in Ukraine
Deere & Co. has restricted travel to Russia and Ukraine for its employees as conflict in the region threatens two large markets for the Moline-based company.
Deere has two factories and an operations office in Russia and has a marketing office in Kiev, the Ukrainian capital.
The region accounts for less than 5 percent of Deere's annual equipment sales, according to Deere spokesman Ken Golden, but is an area ripe for growth.
There was hope Thursday that an agreement between the U.S., Russia, Ukraine, and the European Union would defuse the conflict, which has seen Russia seize control of the Ukrainian territory in Crimea.
However, University of Iowa associate professor of finance Art Durnev, who is Russian, said the conflict had produced "tremendous uncertainty" for Western companies such as Deere operating in the region.
Mr. Durnev said the unpredictability meant Deere and other Western companies are likely to put any plans for new investment in the region on ice.
Sanctions imposed by the U.S. and Europe against Russia have focused on wealthy individuals and the banking sector so far.
But Mr. Durnev said if sanctions were extended to other sectors, Russia could retaliate in ways that would hurt Western companies such as Deere.
Deere employees and dealers travel frequently between Russia, Ukraine, and the U.S., Mr. Durnev said.
The company's foundation also sponsors an agricultural-development training program in schools in Russia and Ukraine.
"We have taken steps to ensure the safety of our employees, including restrictions of travel in the region as well as other measures," Mr. Golden said.
He said Deere was monitoring the situation in Ukraine and Russia closely but added there had been no impact on the company's operations in the region from the conflict so far.
"We support solutions that can be achieved without violence and in accord with international agreements," Mr. Golden said.
Ukraine traditionally was known as the "breadbasket" of Russia and remains a major producer of wheat and corn, while the agricultural sector in Russia has been "booming" in recent years, Mr. Durnev noted.
Deere's Russian factories are located in Domodedovo, where agriculture, construction, and forestry equipment are manufactured, and Orenburg, where seeding equipment is developed, according to Mr. Golden.