KOMMERSANT: Boeing to Grind Russias Titanium
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PAGE: http://putinfreakshow.blogspot.com/ MOST IMPORTANT ARTICLES AND DOCUMENTS: http://putinfreakshow.blogspot.com/2006/12/most-important-articles-and-documents.html Amongst other countless sore compromises made in line with his WTO endless concessions, Putin decided to allow Boeing to "grind" Russia's titanium, as Kommersant inspired entitled its article. US purchasing titanium from Russia: an issue discussed and over-discussed, with a tragic end. Below you can read the history of this topic in 4 full-length articles: Boeing to Grind Russias Titanium Russias VSMPO-Avisma and U.S. Boeing announced yesterday they are setting up a venture to produce in Russia the parts for Boeing. It looks like Boeing will have to cooperate with another owner of VSMPO-Avisma - the deal whereby the majority stake in this titanium corporation will be transferred to the state-run Rosoboronexport could be announced in the near time. Boeing and VSMPO-Avisma, a core titanium supplier to Boeing since mid.-1990s, have talked over the ventures creation for more than a year, said a source close to the deal. The official signing of agreement is slated for today, April 14, 2006, Moscow.The partners intend to arrange mechanical treatment of titanium parts at VSMPOs area in Verkhnaya Salda, the Sverdlov region. For Boeing, the parts will cost less because of the cheap labor, while VSMPO-Avisma will benefit as the margin derived by producing and selling the ready parts is 30 percent higher than from raw deliveries. The venture is set up at 50:50 with each parties contributing equipment worth $80 million overall. by www.kommersant.com All the Article in Russian as of Apr. 14, 2006 http://www.kommersant.com/page.asp?idr=529&id=666467 BOEING TO INVEST $3 BLN IN RUSSIA 13:48 28/ 04/ 2005 MOSCOW, April 28 (RIA Novosti) - Boeing has announced its intention to invest $3 billion in a number of Russian aviation and space projects through 2010. According to the company's Russian counterparts and industry experts, the promises are motivated by the aeronautical company's strong interest in raw materials, meaning direct investments should not be expected, Biznes reported. According to the Industry and Energy Ministry, Boeing invested $2.3 billion in Russia between 1991 and 2005, but businessmen and experts are skeptical. "They want to buy our titanium and are not going to invest in anything here," NRBank Vice President Andrei Derkach said. "It is not the investment of funds, but payment for purchases - Europe could have said just as well that it invested billions of dollars in Russia in exchange for gas." But the Industry and Energry Ministry reported after its Boeing talks that "the U.S. side is prepared to instruct [Russian] RRJ developers [in the Sukhoi Aviation Holding] and to share its latest aviation know-how. "Boeing is also prepared to make commitments to provide post-sale servicing of new Russian aircraft in exchange for a reduction of import duties and for guaranteed contracts with Russian airlines." Derkach says the American company is ready to work with RRJ developers in a consulting capacity, but is not ready to invest. "In return, we are to open our borders for their aircraft and forget about our own aviation industry for good," Derkach said. The prospect of investing in Russia's space industry also seems doubtful. Having invested about $1 billion in Sea Launch in the mid-1990s, Boeing has no plans in the works to develop the unprofitable project, a source said. "So, there will be no investments either," the source said. As for cooperation in the ISS project, it took Boeing a good deal of effort to recover its investment. "Boeing funded the completion of the development of two modules, but then we returned this money by providing additional time for using the international space station," the source said. http://en.rian.ru/business/20050428/39754724.html Boeing, Vsmpo-Avisma sign joint-venture memorandum 15:48 14/ 04/ 2006 MOSCOW, April 14 (RIA Novosti) - U.S. aviation giant Boeing and Russia's Vsmpo-Avisma, the world's largest titanium producer, signed a memorandum Friday to establish a joint venture. The enterprise, to be built in West Siberia, will produce forged titanium for the Boeing-787 Dreamliner, a mid-size passenger airplane scheduled to be ready for service in 2008. "The joint venture will employ new technologies for work not only with Boeing and its subcontractors, but also with domestic aircraft manufacturers that would be interested in cooperation," Vladislav Tetyukhin, the director general of Vsmpo-Avisma, said. Vsmpo-Avisma (RTS ticker: VSMO) was established in July 2005, when Avisma (an acronym for Special Aviation Materials that dates back to the Soviet era) merged with Vsmpo (Verkhnaya Salda Metallurgical Production Association). http://en.rian.ru/business/20060414/46391509.html Arms trader Rosoboronexport seeks to buy titanium company stake 16:11 17/ 03/ 2006 ST PETERSBURG, March 17 (RIA Novosti) - Russia's main arms exporter, Rosoboronexport, is holding talks to buy a stake in Vsmpo-Avisma, the world's largest producer of semi-finished products of titanium alloys, the Rosoboronexport CEO said Friday. "We want to buy the biggest stake possible - at least a blocking one - from the present shareholders," Sergei Chemezov told journalists. Rosoboronexport has been linked with a number of Russian companies in recent times, including leading carmaker AvtoVAZ and heavy-duty truck manufacturer Kamaz, though Chemezov ruled out a deal with the latter Friday. Vsmpo-Avisma was established in July 2005, when Avisma (an acronym for Special Aviation Materials that dates back to the Soviet era) merged with Vsmpo (Verkhnaya Salda Metallurgical Production Association). The corporation, which is based in the Perm Territory in the Urals and employs about 7,500 people, is an attractive asset, as it controls a third of the world's titanium market. Its main partners are U.S. and European aircraft giants Boeing and Airbus, who account for 30% of its earnings. Preliminary estimates show the corporation's earnings in 2005 in line with U.S. GAAP were $746 million, with a net profit totaling $228 million. Vyacheslav Bresht, Vsmpo-Avisma board chairman, and Vladislav Tetyukhin, the company's general-director, hold about 60% of the Vsmpo-Avisma stock. Investment funds own about 13% of shares after Moscow-based investment firm Renaissance Capital bought them in their interests in 2005. They had previously belonged to tycoon Viktor Vekselberg's Renova Group, a leading asset management company, which has contested the legality of the deal in various courts around the world. http://en.rian.ru/russia/20060317/44461979.html Major setback for Russia's aircraft industry 15:50 26/ 08/ 2005 MOSCOW. (RIA Novosti military commentator Viktor Litovkin.) The Federal Service for the Supervision of Transport (Rostransnadzor) has grounded all long-haul Il-96-300 airliners "because of numerous failures of their braking and hydraulic systems." The main Russian carrier Aeroflot will almost certainly suffer huge losses and passengers traveling to the Far East and Siberia and from these regions on to European Russia should anticipate serious disruption. However, Boris Alyoshin, head of the Federal Agency for Industry, and even Aeroflot general director Valery Okulov approved the decision on the grounds that passenger safety must come first. The IL-96s have not been grounded indefinitely. The airliners have simply been recalled to the Voronezh aircraft plant so that serious faults in their landing gear can be fixed. Product recall by major manufacturers is a fairly regular occurrence worldwide. Auto giants such as American General Motors and Japanese Toyota have on several occasions recalled thousands of their cars and other products in order to remedy production defects. And the problem with the Il-96s would not have attracted such attention if this were not the type of plane used by Russian President Vladimir Putin and if technical failures had not begun to occur with frightening regularity: once when Putin visited Portugal, and another time when he was returning to Moscow from Finland and even had to change aircraft. But it has emerged that it is not only the presidential plane that has suffered such faults. All 16 Il-96-300 jet liners manufactured in Voronezh, which are operated not only by Aeroflot, but also by Krasnoyarsk Airlines and Domodedovo Airlines, and two of which were made for the Cuban government, have often required urgent repairs. And therefore a production fault has developed into a major setback for the Russian aircraft industry. This is not journalistic exaggeration. Alyoshin explained the situation very clearly. He said that despite all the changes made in the Russian aircraft industry, it is still operated along Soviet-era lines. Designers produce designs, and then Russian manufacturers assemble the products, installing Russian microchips and components. In contrast, the world's aviation giants, such as Boeing and Airbus, have long been using a different principle. While they design and assemble their planes, specialized firms supply the best available avionics, Russian included. The Boeing 777, the best airliner to date, uses titanium produced at Verkhnaya Salda in Russia, while Russian engineers designed many wing elements for the A-380-800 Airbus, the star of this year's Paris air show. Unfortunately, the Russian aircraft industry is not yet able to switch to international cooperation and the international division of labor. The Balashikha foundry, which manufactured the ill-fated UT 151-7 unit for the Il-96-300s, has a monopoly over production of these components for Russian long-haul liners. The Voronezh plant has its hands tied. And its repeated appeals to Balashikha management have failed to remedy the situation. The negligence or incompetence of individual executives and managers very nearly ended in another tragedy. Alyoshin says that this situation will persist until the plant assembling the aircraft and its designers are able to shop around. Only the introduction of international cooperation and international division of labor can redress the situation. The Unified Aircraft Corporation currently being set up in Russia is based precisely on this principle. As Putin said at the opening of the MAKS-2005 air show in Zhukovsky, "We see the future of our aviation and space industries lying in cooperation with our foreign partners." Of course, even international cooperation would not guarantee that there would never again be a manufacturing fault. But if a company or a concern is reprimanded even just once for a production defect, or even just on one occasion suffers losses due to its omissions, it will ensure that the problem never occurs again. This is because it knows that the customer has a choice. In this case, as is evident from the practices of companies worldwide, such a systemic problem is not allowed to arise. http://en.rian.ru/analysis/20050826/41232940.html Complete archives at http://www.sitbot.net/ Please let us stay on topic and be civil. OM
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