With Putin's Blessing, Boeing Boosts Russian Partnership

 - August 26, 2015, 5:09 PM
Boeing and VSMPO-Avisma officials celebrate the extension of their partnership at the MAKS show. Left to right: Sergei Kravchenko, Boeing president for Russia and CIS, Marty Bentrott, Boeing vice president, sales for the Middle East, Russia and Central Asia and Mikhail Voevodin, VSMPO-Avisma CEO. (Photo: Vladimir Karnozov)

Russian President Vladimir Putin used his visit to this week’s MAKS airshow in Moscow to urge Western aerospace firms to expand their partnerships with Russian companies despite continuing economic sanctions against Russia imposed by the European Union, the U.S. and Canada. Commenting after an event on August 25 when Boeing appointed Russian titanium supplier VSMPO-Avisma as a strategic partner for the 777X program, the Russian leader said that he hopes “mutually beneficial international programs with Russian aerospace industry’s participation do not get affected by politics.”

Under the terms of the latest agreement between Boeing and VSMPO-Avisma, the Russian company will supply various titanium components for the new 777X’s largely composite wing. First deliveries of the new twinjet are due to be made in 2020, with production starting in 2017.

VSMPO-Avisma CEO Mikhail Voevodin told reporters that the company’s partnership with Boeing is now in its third decade. Last year, the U.S. airframer extended its framework agreement to take Russian titanium through 2022.

Speaking at the MAKS event, Sergei Kravchenko, Boeing’s president for Russia and the CIS, commented: “I do not have doubts that our joint venture [with VSMPO-Avisma] will be expanding, regardless of the complicated political situation.” The Ural Boeing Manufacturing (UBM) joint venture was established in 2009 and is a 50-50 partnership between Boeing and Russia’s Rostec conglomerate and its subsidiary VSMPO-Avisma. The company already supplies highly machined titanium parts for the 787-8/9 widebody, using U.S.-supplied machinery. Titanium accounts for approximately 20 percent of the 787’s airframe weight and UBM supplies about half of this total. Boeing plans to increase 787 production rates from 10 per month this year to 12 per month next year.

"With the production of next generation commercial jetliners having a larger share of titanium in their airframes, our production volumes will be increasing steadily with an average annual rate of 10 percent," VSMPO-Avisma CEO Mikhail Voevodin told AIN. He explained that Boeing and Airbus take different approaches to sourcing parts from VSMPO-Avisma. While Boeing has invested in a joint venture, its European rival Airbus has chosen to give the company large supply contracts, which in turn provide money for its to expand its presence in the commercial aerospace market.

Despite Boeing's joint venture with VSMPO-Avisma, the company had to compete with other titanium suppliers for the 777X partnership. "We are OK with making investments on our own," said Voevodin. "But if our foreign partner chooses to make an investment in Russian plants, it creates a tighter connections to us and mutual dependency increases."

Boeing and Russian partners, including the Krunichev Space Center, also announced the extension of their cooperation on the International Space Station program through 2020. President Putin spoke with senior Boeing officials for a prolonged period during the MAKS show.