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. Last Updated: 07/27/2016

Airbus Opens A Design Center

MTFrom left, Kaskol Group president Sergei Nedoroslev, head of the Russian Aviation and Space Agency Yury Koptev and Airbus chief operating officer Gustav Humbert opening the Airbus center on Tuesday.
Airbus opened a new front in its battle with arch rival Boeing for global air supremacy Tuesday with the opening of its own engineering center in Moscow -- nine years after the U.S. giant did the same.

"This is the first serious step that will lead to new joint aviation projects," said Yury Koptev, head of the Russian Aviation and Space Agency. The agency signed a more than $2 billion framework agreement with Airbus' parent company, the European Aeronautic Defense and Space Co., in 2001.

Located in downtown Moscow, the facility, dubbed ECAR, or Engineering Center of Airbus in Russia, is the only one of its kind outside Airbus' home countries of France, Germany, Britain and Spain.

Airbus chief operating officer Gustav Humbert told reporters that the center will allow Russian engineers to help design cabin interiors and freight compartments for its jets, including the A380 superjumbo jet, while maintaining real-time contact with colleagues at engineering centers in Toulouse and Hamburg.

The center, a joint venture with Russia's Kaskol Group, will initially employ 30 engineers who have already been through training in both Germany and France.

Humbert said Airbus plans to hire an additional 70 engineers by the end of 2004 and perhaps another 100 to 200 in a few years, depending on demand.

Humbert said Airbus, which is 80 percent owned by EADS, decided to commit to the project with Kaskol despite the downturn in the global airline industry.

The Kaskol Group, which was set up in 1988, includes Hydromash, a Nizhny Novgorod-based manufacturer of undercarriages, and the Sokol plant, which makes and upgrades MiG fighter jets. Sokol also recently started work on the Yak-130 trainer jet.

Kaskol Group's president, Sergei Nedoroslev, praised the opening of the center for giving a big boost to the Russian aviation industry's efforts to break into the highly competitive and lucrative global component market.

Humbert said parts designed at ECAR will be produced in Russia, with Hydromash and Sokol facilities being the leading possibilities.

He also said that later this year Airbus would evaluate which, if any, other Russian manufacturers will be invited to cooperate.

Producing some of its parts in Russia would give Airbus an edge over Boeing, which already employs more than 350 engineers at its Moscow design bureau near the Central Telegraph building on Tverskaya, which it runs in partnership with Ilyushin.

Humbert did not rule out the possibility of subcontracting work to other Russian designers such as Tupolev.

The center is also unusual in that Airbus owns 51 percent of the joint venture, despite current legislation capping foreign ownership in Russian aerospace companies at 25 percent.

Nedoroslev, however, said that requirement was waived due to an agreement Airbus struck in 1996 with the then Economics Ministry.

"We are very lucky to have it," he added.

The cap on foreign ownership is one of the main obstacles to attracting Western investment into the troubled aerospace sector, and Koptev said the Russian Aviation and Space Agency is asking the government to raise it to at least 49 percent.

"No serious investor will ever come with this scheme in place," Koptev said.

Originally considered a national security issue, since many producers of civilian craft also work on defense programs, the foreign ownership cap has been a major hurdle to working more closely with global leaders.

Earlier this year Koptev lamented that the framework agreement with EADS was being implemented too slowly.

Russia's defense concerns have so far kept domestic companies like Kaskol from being able to participate in EADS's biggest deal ever -- a recently concluded $24 billion order from seven European NATO nations for dozens of A400M military transport aircraft.

Meanwhile, Humbert said Airbus is working toward striking an agreement with Russian Aluminum that could see the metals giant supply up to 30 percent of his company's considerable demand for aluminum.