Allan McArtor, chairman of Airbus Americas, toured RTI's titanium plant in Niles.

Sept. 29, 2010 7:02 a.m.
By Dan O'Brien
NILES, Ohio -- The chairman of one of the world's largest aircraft corporations says that the global aerospace industry stands to grow significantly over the next two decades as demand in emerging markets such as China, India and South America takes hold.

"The projection over the next 20 years is $3 trillion worth of new airplanes," said Allan McArtor, chairman of Airbus Americas. "It's a very large industry and we have a healthy backlog at Airbus, five or six years. We're going to have to increase our production rates to meet the demand."

McArtor stopped in the Mahoning Valley Tuesday to tour the titanium mill here of RTI Metals International Inc. and to reaffirm what he says is a long-standing relationship with that company. Accompanying McArtor on the tour were RTI President and CEO Dawne S. Hickton and U.S. Rep. Tim Ryan, D-17 Ohio.

The titanium produced in the RTI mill here is used in every one of Airbus' aircraft, McArtor said. And, over the years the quantity of titanium used in these aircraft has increased, thereby making RTI's role even more valuable.

McArtor pointed out that Airbus is a very demanding company and said he is impressed with the quality of RTI's work. "We have very high standards, and we find that with RTI," he said.

And, the executive praised the work force of the plant in Niles, noting that its experience and know-how has proven invaluable to the success of Airbus. "This talent is most important to us," he said.

"RTI can look forward to a very healthy backlog with us as well," McArtor continued. When RTI started in business in 1951, titanium was considered an "exotic metal" and not widely used.

That changed as technology improved and the light weight of the metal and its strength became better understood by the aerospace industry, McArtor said.

"We always have these ups and downs in the market," he said. "But over time, it's a steadily growing industry."

RTI's Hickton said her company's relationship with Airbus reaches back several decades and noted that RTI supplies Airbus with "millions of pounds" of titanium every year from its Niles plant. RTI, which contracted with Airbus to supply the metal in 2006, has a long-term agreement with the aircraft giant until 2020.

"As a result of that, we've been investing millions of dollars in this facility to support that agreement," Hickton said. "In the last three years alone, we have spent more than $50 million," in new equipment, systems upgrades, maintenance, technology and environmental improvements, she said. Five hundred are employed at the Niles plant.

RTI also spent another $25 million to improve its plant in Canton, Hickton said. RTI, founded in Niles in 1951, relocated its headquarters to Pittsburgh in 2008.

While Boeing and Airbus command most of the commercial aerospace market, the CEO of RTI said, competition is emerging from other players such as Montreal-based Bombardier Aerospace.

Demand is on the rise for aircraft throughout the world. "It's really a question of timing," she said of the market.

In China alone, there are one billion people who have never flown in a plane, Hickton noted. As that nation continues its modernization, demand for new aircraft will be especially strong. "The same thing with India, and the same thing with the Middle East," she observed.

In more mature markets such as the United States, the focus is on replacing aging aircraft fleets, Hickton said. "You're really looking at replacement growth," she said. During the recession, many airlines reduced capacity and are expected to replace commercial jets with newer models. "That's a long-term driver," she said.

More than 70% of the titanium RTI produces ends up in aircraft, whether commercial or military, Hickton said. "A key customer of ours is Lockheed-Martin," she said, noting her company furnishes the titanium used in the joint-strike fighter it builds.

Titanium also ends up in the medical industry where the metal is used for hip and knee replacements, Hickton noted.

Key to developing additional business for RTI is maintaining its close working relationship with government officials.

Ryan, who sits on the House Subcommittee on Defense Appropriations, said that the next step is to see that U.S. companies such as RTI receive their fair share of defense dollars as part of the effort to drive investment back into this country.

Airbus, Ryan noted, has invested $4.3 billion in Ohio, helping companies such as RTI and other suppliers throughout the state. "We have the supply chain. We have the universities. We have the expertise. We can do the research. We can do the manufacturing," he said.

RTI, Ryan said, is a "perfect example" of how successful partnerships could be forged.

Last week, the congressman and the Youngstown/Warren Regional Chamber hosted representatives from defense contracting companies and met with several local businesses, including RTI.

The objective is to leverage Ryan's seat on the defense subcommittee to direct spending to northeastern Ohio manufacturers who contract with the Department of Defense. "We've got to get money back into people's pockets, and RTI does it," he said.