Is cheaper titanium worth prolonging the Ukraine war?

Last month, Fortune reported good news: 1,000 companies had followed through on their divestiture of business in Russia.  Combined with the West's government sanctions, these companies' courage to do the right thing is having "a crushing impact on Russia's wilting economy," according to Fortune.

But a few companies haven't followed their conglomerate brothers and sisters.  Each of them is putting short-term gain over long-term loss — earning dollars now with Russia but losing the trust of dozens of other nations in the process.

This short-sighted approach may cost no company more than Airbus.  The world's largest aerospace company is primarily a government contractor, heavily reliant on good relations with businesses, government officials, and politicians around the world.  This means keeping everyone happy — not putting one country over the rest.

Unfortunately, that's what Airbus has done: put Russian interests ahead of everyone else's.  The company has spoken out against economic sanctions on titanium, a metal critical to airline manufacturing, on the basis that Russia could strangle European militaries by not selling titanium to Airbus and other European countries.

Airbus's concern is legitimate.  Everyone has felt the bite of supply chain disruptions, and airlines are already under intense pressure because of canceled flights.  Hiking costs further and delaying even more flights would surely be unpleasant.

But what would be even worse is empowering Russian aggression.  There are other sources of titanium, but instead of shifting its supply chain to keep customers happy and be part of the solution to Russian aggression, Airbus is blunting the power of sanctions — and empowering Russia.

In the short term, Airbus benefits from this arrangement.  Fortune notes that the titanium issue has negatively impacted Airbus's U.S. competitors, for example.  However, in the long run, this commerce with Russia will come with a cost.  The long-term loss of trust for Airbus's reputation because of their open hostility to sanctions may cost them dearly in future efforts to provide the West with aircraft.  Because they are such a large company, their biggest customers tend to be governments like the United States, China, and European governments.  It is in Airbus's issue to not make economic enemies of its employers.

Airbus has not been shy about its opposition to sanctions, and it will not be able to rewrite history after the war is over.  The Wall Street Journal reported in June that "Airbus, the world's largest commercial plane maker, is still importing hefty amounts of titanium from" Russia and continues to publicly oppose titanium sanctions.  Airbus seems to think taxpayers, regulators, politicians, and everyone else will have short memories — a flaw that will undermine its sales and profits just as its maneuvers undermine today's sanctions.

Image via Public Domain Pictures.

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