While Boeing has suspended most of its business with Russia, it has yet to resolve the status of its relationship with a titanium supplier run by a government collaborator who once worked in the KGB under Vladimir Putin. The manufacturer made a bid decades ago to source Russian titanium. The metal, one of the most difficult to refine, is crucial to the manufacture of commercial and military aircraft, satellites, and the Starliner spacecraft.
Boeing has warned that geopolitical changes brought about by the invasion of Ukraine could create supply problems. The manufacturer said that, in addition to closing its engineering offices in Moscow and Kyiv and ceasing to ship spare parts to Russian airlines, it will stop buying titanium from the country. However, Boeing has not clarified what will happen to its titanium production joint venture with Rostec. Ural Boeing Manufacturing is located about 1,100 kilometers east of Moscow in a region of the Ural Mountains called the Titanium Valley.
The fall of the USSR boosted the business, and the invasion of Crimea destroyed it
Purchasing of titanium from Russia accelerated as a result of improved trade relations with the West after the collapse of the Soviet Union in 1991. As the WSJ reports, Boeing obtained about a third of its titanium from Russia, supplemented by the US, Japan, China, and Kazakhstan. After Russia invaded Crimea in 2014, the manufacturer began diversifying its sources. A company spokeswoman noted that “our inventory and diversity of sources provide sufficient supply for aircraft production”. She added that “in recent months we have been stockpiling material and trying to find new suppliers”.
Chemezov, CEO and chairman of Rostec – Boeing’s titanium supplier – was sanctioned by the US after the 2014 Russian invasion, sanctions that were extended last week. Chemezov and Putin are close and worked together in the Soviet intelligence service in East Germany, and even lived in the same apartment complex.
Boeing and other US companies can still import Russian titanium, despite the new wave of sanctions. However, the escalating war could result in Western companies losing access to the metal if the Kremlin decides to impose sanctions of its own.
