Vladimir Putin, Russia’s president, is on Friday expected to announce the formation of a joint venture between the country’s largest titanium producer and Boeing, calming fears that recent sanctions imposed against Russia by the US would spur a backlash against the aerospace company.
The joint venture between Boeing and VSMPO-Avisma is to be unveiled just a week after the US State Department announced sanctions against two Russian companies, including one set to take over the titanium company.
Mr Putin, top executives at Boeing – including Alan Mulally, head of the commercial aircraft division, and Michael Cave, vice-president – and the former Russia ambassador Thomas Pickering are also expected to resume negotiations and could reach a deal to supply Aeroflot, Russia’s national airline, with more than 20 Boeing 787 Dreamliner aircraft.
A deal would represent a blow to Airbus, the European manufacturer that has been competing head-to-head with Boeing to sign up with Aeroflot.
The developments in Russia contrast with predictions by some analysts that the Kremlin would take a tough stand against US companies in the wake of the sanctions, which Russian officials said were unwarranted. However, questions remain whether other US groups, including oil and gas companies, could face retaliatory measures by the Russian government.
The US decided to impose the sanctions against the state-controlled weapons exporter Rosoboronexport and the aircraft manufacturer Sukhoi following the sale of an anti-aircraft system to Iran by Russia earlier this year, according to a person familiar with the situation.
Rosoboronexport, which is set to take over VSMPO, is chaired by Sergei Chemezov, an ex-KGB officer and friend of Mr Putin.
The 50-50 joint venture will process parts for Boeing 787s worth up to $4bn over the next 10 years.
A Boeing senior manager in Russia had earlier said the aircraft manufacturer was planning to spend up to $18bn by 2030 on acquiring Russian titanium products and $5bn on Russia’s engineering services.
A person close to the situation said the venture would be based in the Urals – once the heart of Russia’s military and industrial complex – and would add at least 30 per cent in value to titanium products.