Airbus Still Does Business With Putin’s Russia But Also Wants U.S. Defense Contracts Mario H. Lopez
One thing made clear by Vladmir Putin’s war against Ukraine is how out of touch his calculations were regarding Ukraine’s ability to fight, the strength of his forces, and the willingness of the international community to push back against his unhinged brutality.
That last point might be the most surprising of all given the lack of a similar response to Putin’s illegal annexation of Crimea and other aggressions in recent times. Countries — including famously neutral Switzerland — and an impressive number of private companies joined in sanctions and/or took similar steps that have hurt Putin’s ability to impose more pain on the Ukrainian people.
French aerospace giant Airbus is one of the more notable exceptions to the laudable private-sector efforts.
Instead, Airbus is ignoring sanctions on Russia and has gone as far as to successfully pressure the European Union to exempt it from sanctions. Interestingly, their position comes at a time when they are simultaneously attempting to expand their contracting work with the U.S. Defense Department.
Airbus needs titanium to manufacture planes. Titanium and titanium alloys are widely used for aircraft. Titanium’s density is 60% that of steel, so it is lightweight but also strong and resists corrosion. Airbus gets about half of the titanium it uses from Russia.
After Russia invaded Crimea in 2014, Airbus continued dealing with Moscow, even going so far as to stockpile more Russian titanium while other plane makers balked at the same chance.
Now, Airbus is going much further than that. This Spring, Airbus’ chief executive officer said “We don’t think sanctions on imports will be appropriate. This will be a small impact on Russia, and would have large consequences on the rest of the countries and the industry. So we think the no-sanction policy actually is the most meaningful one.”
But sanctions against Russia have worked. Just a few weeks ago, Oleg Vyugin, an expert on the Russian economy, told Reuters that “Russia’s economy was on track to expand by 5-6% in 2022 had Western sanctions not derailed growth for years and ushered in a period of technological stagnation.” Vyugin pointed out that now Russia’s growth was negative and expected to be about negative 4% for the year.
The sanctions and voluntary moves to stop or severely limit dealings in Russia by American and other companies clearly has come at a temporary cost to those businesses. JPMorgan Chase reportedly estimated that they might lose $1 billion. PepsiCo stopped selling soda. Clothing retailer H&M paused sales in about 170 stores in Russia.
Airbus’ ongoing business in Russia, on the other hand, is helping to prop up the Russian government. Its principal titanium supplier is run by a Russian oligarch reportedly “one of Putin’s close associates.”
Airbus’ ongoing embrace of Russian business seems especially brazen in light of it being kept afloat by Western governments in defiance of international trade agreements. An aerospace industry website noted that “European governments have propped up airplane maker Airbus with illegal subsidies for more than 45 years. These subsidies continue to help fund the company’s airplane development programs, even though the World Trade Organization (WTO) has declared these capital infusions to be illegal subsidies multiple times.”
Airbus also sells weapon systems to the U.S. military and, like other contractors, it looks to expand its offerings. For example, Airbus could still be an option for providing future refueling tankers for the U.S. Airforce, even with this controversy swirling.
This raises the question of supply chain reliability — an ongoing issue across industries but certainly one with national security implications when it comes to defense. Other producers of aircraft and parts might not be hindered in their production and repair process. Also, production problems would certainly arise if Russia decided to cut off titanium to Airbus.
While the Department of Defense’s rules against sourcing certain metals from Russia, China, North Korea, and Iran do not apply to titanium, that doesn’t mean that the similarities and circumstances could not apply during the decision-making process.
No one should forget the degree to which Putin has gone to inflict pain on the Ukrainian people. The atrocities are too numerous to mention, but reports of torture, mass rapes, the kidnapping of children, the intentional bombing of civilians, mass graves, etc., are so widespread that the degree of brutality is clearly an intentional component of Putin’s vicious campaign. Even the prospect of Putin using nuclear weapons now ominously hangs over the world.
One of modern history’s unequivocal messages is that appeasing tyrants and their desire to inflict terror does not work. Sanctions might be an imperfect tool, but they are the least the West can do, especially given that a victory for Putin against Ukraine will only embolden his bloodthirsty quest to increase his global power.
And for companies like Airbus that fail to be moved by this bigger picture, the question must be asked about how much trust democracies — who need to defend themselves from such existential threats — can place in them.
Mario H. Lopez is president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity, and prosperity for all Americans
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