But Iran Sanctions May Pose Problem
It's no secret the costs of materials used to build airliners
are shooting up higher than FL430... so it stands to reason
manufacturers are looking at ways to reduce those costs where they
can. To that end, Boeing announced Friday it has signed an
agreement with Russia's VSMPO-Avisma aimed at cutting the cost of
making titanium parts for its upcoming 787 Dreamliner.
Under terms of the agreement, the companies will manufacture
those parts in Verkhnaya Salda, where VSMPO is based. Bloomberg
reports the agreement with the world's largest titanium supplier is
part of the $18 billion Boeing expects to spend on Russian titanium
over the next 30 years.
Both Boeing and rival Airbus are already big customers for VSMPO
-- with Airbus currently receiving about 60 percent of its titanium
from the Russian company, and Boeing getting about 40 percent
before the agreement.
"This agreement is
beneficial for both companies," said Kirill Chuiko, a metals
analyst at Moscow's UralSib Financial Corp. "They are key partners
and a deeper cooperation will give Boeing a longer-term contract
for cheaper titanium, while VSMPO will get technology."
The agreement isn't without potential complications, however...
as it comes one week after the US State Department imposed
sanctions on Rosoboronexport, which is in the process of buying out
VSMPO, for breaking a US regulation on trading with Iran.
When factored in with strained political ties between the two
countries -- as well as a similar US sanction on Russian jetmaker
Sukhoi over fighter jets -- some fear Boeing may not be able to
reap the benefits of the agreement with VSMPO right away.
Officials on both sides downplayed any negative fallout from the
deal, however. Boeing commercial chief Alan Mullaly met with
Vladimir Putin after the agreement was signed... and the Russian
president reaffirmed his support for Boeing's ventures in
Russia.
"We will, from our part, support the development of your
business in Russia," Putin told Mullaly, according to Interfax news
agency. "Your company has always demonstrated itself as being a
very reliable partner."
VSMPO Chairman Vyacheslav Bresht said the agreement with his
company marks the first time Boeing has entered into such an
in-depth agreement with a subcontractor outside the US... and that
the joint venture could save Boeing as much as 20 percent in the
cost of machining and processing titanium.