corporate perspective on russia future high tech r&d and manufacturing ambassador thomas...
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Corporate Perspective on Russia Corporate Perspective on Russia Future High Tech R&D and Future High Tech R&D and
ManufacturingManufacturing
Ambassador Thomas Pickering Senior Vice-President, International RelationsThe Boeing Company
Russia – The World Bank Workshopon Public Policies in Support ofIndustrial Competitiveness and
Economic Diversification
MoscowFebruary 4, 2005
Boeing in Russia/CISEngineering
New Aviation Routes
Zenit
International Space Station
Sea Launch
IT
Purchases of Titanium and
Parts
Boeing airplane sales
ATM andAviation
Safety
Research and Development
Regional Jet San Francisco
Los AngelesChicago
New York
KhatangaDikson
Singapore
Tokyo
Frankfurt
London
Delhi
Moscow Khabarovsk
Hong-Kong
1991 2000 2004
$1.3B
$$ Values of Boeing programs in Russia
• ISS• Sea Launch• Design Center• Titanium• IT• Technology
Center
• 787• Design Center• Titanium• IT• Technology
Center• Sea Launch
• ISS• Sea Launch• Design Center• Titanium• Technology
Center
$2.3B
787 - Russia
787 (7E7)
Large Cargo Freighter
+• 1000 engineers • Hundreds of Programmers • New Alloys• R&D of New Technologies• New IT Technologies
Russian Ministry of Industry and Energy - Boeing MOU on Russian Industry Participation in the 7E7 Program Signing Ceremony Moscow, Nov 17, 2004
New Opportunities for Russia
• Space exploration- Wide international partnership for
new space exploration initiatives- Best Russian solutions for cargo
delivery to support missions to Moon and Mars
• Defense and SecurityIf and when RG and USG are ready to proceed
- Missile Defense cooperation (U.S./Russia)
- NATO/Russia working group
~$0.5B / year
~$5B / year Intellectual Services
InformationTechnology
Research &Development
Engineering
Innovations, High-Tech Integrated Intellectual Services – New Competitive Sector of
Russian Economy
Today:• Boeing• Intel• Motorola
Future:Most World Leading Companies
Integrating Russia into World Economy as a High-Tech Country for Engineering/Technology/IT services, less dependant on export of
natural resources
InformationTechnology
EngineeringResearch andDevelopment
InformationTechnology
EngineeringResearch andDevelopment
Sea Launch(Boeing, World Bank, Energia, Uzhmash/Uzhnoye, Kvaerner)
Titanium/Special Metallurgy(Boeing, Airbus, GE, Pratt&Whitney, Rolls-Royce)
RRJ
Trigger Russian Competitiveness
Sea Launch is an international private Joint Venture created by Boeing (U.S.), World Bank, Energia (Russia), Yuzhnoye/Yuzhmash (Ukraine) and Kvaerner (Norway) to revolutionize heavy commercial satellites launches
Sea Launch – The Present
1993-1995Initial Sea Launch studies
with future partners
1995Sea Launch venture is
formed. Hughes signs first order. Ship construction
commences.
1996 - 1998Construction of Launch
Platform and Command Ship in Norway/Scotland/St.-
Petersburg
March 1999First Demo launch
Sea Launch – The Future – New Level of PPP
1999-200414 launches performed
2005-2006Heavy backlog of new
launches. $200M annual cash flow to Russian and
Ukrainian enterprises
New markets of dual purpose and government payloads
Tough declining market of commercial launches
1999 2000 2001 2002 2003 2004
1993-1997Boeing-VSMPO started
cooperation.VSMPO becomes approved
Boeing supplier.
1998First Boeing-VMSPO long-
term Ti contract
Boeing-VSMPO Cooperation On Titanium Metallurgy For Current And Future Aerospace Products
Titanium - Beginning
1998-2004Intensive development
and certification of VSMPO.
Joint Boeing-VSMPO new Ti alloys & technology
programs
2005New long-term Boeing-
VSMPO contract.VSMPO becomes major Boeing commercial Ti
supplier starting
2007
Boeing-VSMPO Cooperation On Titanium Metallurgy For Current And Future Aerospace Products
Titanium - Present
Boeing 787
1993
1993-1997
1998-2004
2005-
Outstanding Projects Based on Soviet Investment in
the Plant and Ability of th
e Current Leader to Meet
Demanding Western Market Requirements,
Supplemented by Great Metallurgical Innovation
Lost MarketShare
Requires Russian Government Protection of the best companies, stability, cooperation to open new markets and develop new technologies
Boeing-VSMPO Cooperation On Titanium Metallurgy For Current And Future Aerospace Products
Increased market share
Titanium – The Future – New Level of PPP
Russian Regional Jet
• Certification according to Russian and International standards• Designed and built in Russia for sales around the world• RRJ Program developer - Sukhoi Civil Aircraft (SCA)
Boeing contribution to RRJ program is providing technical consultation and intellectual property
April 2001 Boeing – Russian Aerospace Agency Agreement June 2001 RRJ Feasibility Study development by SCA and BoeingJanuary 2003 Boeing – SCA Agreement on long-term partnership on RRJ programNov 2004 Full scale program launch
First delivery is scheduled for December 2007
Target: build the best in the world regional jet (~75 and 95 passengers) for Russia and International sales
1. Russia enjoys an obvious advantage based on the unique intellectual talent:- Information technologies- Engineering services- Research and Development
This should be promoted to customers and investors by Industry and Government. The support of the World Bank to this most promising development of the Russian economy is most desirable.
2. The Role of Government and the private public partnership- Tax concessions- Creation of techno parks IT infrastructure- Support to development of marketing and sales capability of
Russian intellectual services business
Conclusions
Conclusions3. International trade is a two-way street.
- Russian Regional Jet (RRJ) – competitive project – leads the way in
revising this industry
- Russian airlines need competitive aircraft now to exploit Russia’s unique geopolitical position and lead the aviation transport market in the region