“This is one of the great geopolitical events of my lifetime,” began Kogod professor Erran Carmel. “Unfortunately, this situation is unlikely to have a Cinderella story. The war will drag on for weeks, we will be faced with a humanitarian crisis with Russia occupying and destroying Ukraine, and then a month or two later, Russia will be isolated and angry.”
Professor Carmel’s statement set the backdrop for the webinar held on March 3 with the above statement. Five Kogod professors came together to discuss the impact of the current Russia-Ukraine War. Each Kogod faculty member began conversations that webinar participants could expand upon individually or by reaching out directly to the faculty.
Automobile and Manufacturing Industries
Professor Frank DuBois, the first panelist, spoke about supply chains in the automotive industry and how this invasion of Ukraine will affect manufacturers who have markets in Russia. “There are significant ramifications here,” began DuBois.
As the creator of the Made in America Auto Index, DuBois has ample experience examining the components of vehicles. “Vehicles are incredibly complex today. There are a lot more things in them that we never even thought we’d see—a backup camera, dashboard navigation—all of these things need microchips,” said DuBois. “So, with respect to Russia and Ukraine, there is something called neon gas. Seventy percent of the world’s neon comes from Ukraine, and without neon, you can’t manufacture microchips.”
Palladium is another critical chemical element necessary in manufacturing catalytic converters—a component found in all vehicles. “Forty percent of the world’s palladium comes from Russia,” said DuBois. Aluminum and nickel are critical elements in electronic vehicles. Russia is a significant producer of these elements, and current restrictions on Russian exports are causing manufacturers to scramble to find alternative sources that may not even exist.
“Secondarily, auto manufacturers with business in Russia and Ukraine—Toyota, Hyundai, Kia—are all shut down. Trade between Russia, South Korea, and Japan is primarily cars and car parts, and that is all going to dry up very quickly,” explained DuBois.