The news from Toulouse isn’t getting much better for Airbus.
Der Spiegel, the leading German news magazine, had a pretty damning article last week about the problems within Airbus parent company EADS.
The A380’s wiring problems, which are leading to the long delivery delays, are the result of a series of moves taken in the mid-’90s, as EADS was created from the consortium of companies that preceded it, the magazine maintains.
There were widespread layoffs at the Daimler operations in Germany, which cost the new Airbus a generation of talent, the magazine said.
In addition, the dual-nation management structure imposed on EADS has created a chain of command more twisted and tangled than the A380’s faulty wiring.
“The company’s Byzantine Franco-German management structure has also made it impossible for Airbus to respond quickly to problems,” Der Spiegel reported. “Even today, many inside the company are unable to determine the line of command and who is actually responsible for what.”
Airbus’ misplaced bet on the A380 has cost it billions of euros, and solving the production problems will continue to bleed energy and talent for the months to come.
The Europeans clearly misread the market for the mid-size, long-range jets, for years offering only a warmed-over stale croissant of an A350 as the alternative to the Boeing Co.’s 787.
Airbus also bet wrong on the ultra-long-haul market, pitting the four-engine A340s against Boeing’s more-efficient 777 twin-jets.
And while Airbus struggles to catch up, Boeing is crushing Airbus in the orders race. In the next two years, Boeing will put its market-dominating 787 in the air, push ahead with a new 747 model and continue planning for a replacement for the trusty 737.
All in all, it’s easy to draw the conclusion that EADS and Airbus have dug themselves a hole they may never fly out of.
But I doubt it.
It wasn’t all that long ago that I was calling the home team, Boeing, the “gang that couldn’t fly straight.” There was a revolving door to the chief executive’s office. The company made more headlines for its ethics scandals than big jet sales.
And there was a widespread perception on Wall Street, even on Casino Road, that the higher-ups had decided to quietly exit the commercial jet business, making only minimal investments to update existing jets instead of the bold, expensive, bet-the-company gambles that would change aviation.
It’s only human nature, New Yorker columnist James Surowiecki wrote last week. We tend to focus on recent trends, and forget the long-term.
“The problem with such prognostications is that they infer basic truths about a company’s prospects from its short-term performance,” he wrote. “In fact, present success is often determined as much by context and chance as by fundamental viability. This is particularly true of the aerospace industry, because success is heavily dependent on a small number of big gambles. If you bet right, you look like a genius for a few years, even if the success of your bet was due to factors out of your control.”
Indeed, what would have happened if there had been a different government in Venezuela, or widespread peace across the Middle East, leading to lower fuel costs the past few years? Would airlines have been so eager to ground their old gas-guzzlers, leading to last year’s record jet sales? Would the 787 have been such a big winner?
We’ll never know. But we do know that for this time, under these conditions, Boeing has made more right moves than Airbus, and that’s why it has momentum. And that condition will last only as long as Boeing continues to make more right moves than the team from Toulouse.
A housekeeping note: This is my last column for a while. I’ve won a fellowship to Columbia University in New York, and I leave next week for a year of graduate-level accounting courses and humping groceries up to my 15th-floor apartment in Manhattan. I’ll be back next June, just in time for next summer’s first flight of the 787.
It’ll be an adventure, but then again, the past six years on the aerospace beat have been pretty wild as well, what with the Boeing headquarters move, the layoffs, the tanker debacle, the 7E7 site selection process, the Machinists’ strike and my round-the-world 787 supplier trip.
That’s a whole lot of ink under the bridge, so to speak, and I thank you for reading it.
So stay cool, everybody, and if you want to wrap up the tanker deal while I’m gone, that’s OK with me.
Reporter Bryan Corliss: 425-339-3454 or corliss@heraldnet.com.
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