The Samara Metallurgical Plant, a sprawling complex in southwestern Russia that spans an area the size of a dozen city blocks, is a cornerstone of Russian industry. It is the country’s largest supplier of aluminum commercial and industrial products.
It is also a source of critical parts for the Russian warplanes and missiles that are now tearing through Ukraine. And atop its edifice, spelled out in giant blue letters, is the name of its American owner: Arconic, a Pittsburgh-based, Fortune 500 company that is one of America’s largest metalworking firms even after splitting out from the industrial giant Alcoa in 2016.
Arconic does not make weapons. But its sophisticated forges are among a handful of machines in Russia that can form lightweight metals into large aerospace parts like bulkheads and wing mounts.
Under an agreement with the Russian government, the company has from the start of its operations at Samara, in 2004, been legally required to supply the country’s defense industry as a condition of operating a plant whose mostly nonmilitary output has proved tremendously lucrative.
Even as Russia turned its military toward ever more aggressive ends around the world and the relationship between the United States and the Kremlin soured, Arconic maintained the Samara operation, despite the growing legal and political complications of operating there.
Now, however, with Russia’s invasion of Ukraine polarizing the world, Arconic’s leadership has found that its business at Samara is, finally, unsustainable.
Though there is no indication that Arconic is in breach of American or other Western sanctions, those penalties have made it difficult to keep the plant supplied and operating. But shutting down production could expose its employees there to jail time under Russian laws on maintaining strategic production. And Russia has already cut off Arconic’s access to profits from the Samara plant.
“The conflict in Ukraine has made our continued presence in Russia untenable, which led to our decision to pursue a sale,” Timothy Myers, Arconic’s chief executive, said in a written statement on Friday.
Company documents acquired by The New York Times, along with financial filings and other public materials, reveal Arconic’s struggles to keep the plant running. The documents were provided by a whistleblower employee who objected to Arconic’s continued involvement in Russia even after the invasion of Ukraine.
On Wednesday, the day after The Times approached Arconic with details of its work in Russia, its board approved a plan that, according to internal documents, had been under internal consideration for weeks: to sell the plant outright. The company announced this decision on Thursday.
But any sale remains hypothetical, as the company does not yet have a buyer. And finding one would require regulatory approval at the highest levels from both the United States and Russia.
That is perhaps fitting, as those governments had cooperated to pave the way for Arconic’s ownership of Samara in the first place.
Now, the long-coming divorce, accelerated by the war in Ukraine, is proving costly, with European energy consumers and companies like Arconic…