Corporatism and Russian Sanctions
In his 1981 Inaugural Address, President Ronald Reagan said something both simple and profound: “We are a nation that has a government – not the other way around.” That affirmation still drives American policy.
In Europe, however, there is no real government accountable to the people. No, just the layered, bureaucratic, and unresponsive European Union (EU) – a political and economic association of 27 member states. There, instead of a single governing authority making foreign policy, there are interests and corporate entities leading the charge on major decisions and strategic concerns. As witness, look at Airbus, a French-based company, that looks as if it is imposing its corporate advantage as a – sort of – foreign policy for the EU, and as a consequence, imposing its self-interest on myriad nations across the globe.
As background, let’s consider the awful situation in Ukraine as Russian troops wreak havoc in that country. At the moment, Hordes of Russian tanks, weaponry, and soldiers are destroying Ukraine cities and killing Ukraine citizens. The United States and our allies are working to end the crisis and force the Russian invaders to draw back. U.S. policy is established on diplomacy and sanctions – President Biden has been consistent on not sending American troops to Ukraine.
Pushing and maintaining a diplomatic approach grounded on sanctions is a delicate balancing act (to say the least). At the core of this approach is the imposition of severe economic sanctions on Russian interests, especially those interests that most impact Russia’s corrupt government and its cabal of oligarchs.
Airbus, a European planemaker and major international defense contractor, disapproves of the sanctions approach. In fact, Airbus is pushing against sanctions. "We don't think sanctions on imports will be appropriate," Airbus CEO Guillaume Faury told shareholders this month. "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."
Guillaume’s anti-sanctions posture is influencing EU policy and could upset U.S. policy vis-à-vis Russian aggression.
At issue in this case is titanium, a valuable and malleable metal used in the production of all sorts of aircraft. The investor site Seeking Alpha has emphasized that the “no sanctions” approach is paying off for the European aerospace giant. Seeking Alpha writes, “Airbus has so far been able to keep importing Russian titanium, which has not yet been directly targeted by a growing list of European Union sanctions aimed at punishing Russia over its invasion of Ukraine.”
Why does this matter? For one thing, the entire world, including the U.S., is feeling the effects of the sanctions. What are you paying for gas? Prices are soaring ahead of the summer travel season. What’s more, European consumers are paying more for all sorts of energy because Russia has been a major supplier of natural gas, and that commodity is also being sanctioned.
Titanium – Russian titanium – however, is of greater interest. Why? Simple, Airbus needs it. The corporate giant gets about half of its titanium from …. You guessed it, from Putin’s Russia. Airbus is panicked of losing its supply.
This matters here at home because Airbus is also a defense contractor for the U.S. government. For example, “Airbus Helicopters Inc. partners with various organizations including Davenport Aviation to execute federal, state and government contracts,” the company’s Web site declares. It is also in the running for a potentially more lucrative and important contract to build tanker aircraft. Everything global is local.
Adding to the intrigue is that the Pentagon is updating its fleet of tankers. The trade publication Aviation Week notes that Airbus wants a piece of the action: “Lockheed Martin promptly announced its entrant into the program, a modified Airbus A330 Multi-Role Tanker Transport called the LMXT that the company says can provide more fuel at range than a KC-46.”
This is folly. The KC-46, also known as Pegasus, is a tested aircraft that is already in service refueling American military aircraft. It is successfully replacing a chunk of the decades-old tanker fleet, and more Pegasus are on the way. They are made on a dedicated production line here in the States without the need for Russian metals. Catch that …. We don’t need Russian material to produce it.
An Airbus-designed tanker would need to start from square one, requiring hundreds of millions of dollars of testing and setting the tanker program back by several years. Not to mention that its design would require Russian inputs.
The American military should rely on dependable equipment, made here by American companies. Given the Russian war on Ukraine – and the sanctions – let Airbus try to influence the European Union (hoping it fails), but leave American policy to the people, the interests, and the government of the United States.
Jerry Rogers is vice president at the Institute for Liberty and the host of The Jerry Rogers Show on WBAL NewsRadio. @JerryRogersShow.
