By Jan Schwartz and Christoph Steitz

FRANKFURT, (Reuters) – German parts supplier Continental AG (OTC) said Tuesday that it has resumed passenger car tyre manufacturing at the Russian Kaluga plant. This was to safeguard local workers from possible criminal prosecutions.

Continental claimed that the action was intended to meet local demand. It also complied with Moscow’s sanctions for invading Ukraine. Russia called it a “specially military operation”.

Continental said that Russia’s managers and employees are at risk of severe criminal sanctions if we don’t serve the local market.

Continental stated on March 8 that production had been stopped at its plant. However, it did not give any details on possible charges to employees.

According to it, “To protect our Russian workers from any prosecutions we temporarily resume the production at our Kaluga tyre plant of passenger tyres.”

Continental stated that resumption of production is not profit driven.

Nokian Tyres, Finland warned that EU sanctions would make Russian tyre sales difficult. However, it stated in March that it had decided to keep its factories and gave control over the location of Russian tyres.

It stated that around half the material it used in Russia to make its tyres came from abroad.

Italy’s Pirelli stopped investment in Russia, and has curtailed its operations there. Pirelli produces around 10% of its worldwide tyre production in Russian factories.

Russian President Vladimir Putin declared in March that Russia can seize assets from companies who abandon their activities there.

A source close to the situation said that Russian prosecutors warned Western companies that employees may be detained if they stop production of vital goods.