Airbus and its parent company, EADS, are not really a manufacturing company. Rather, they are a massive European welfare program that passes out paychecks while pretending to make airplanes. With every program behind schedule and Boeing running away with the market, Airbus turned to a fellow by the name of Christian Streiff to straighten it out. Streiff knew two things: One, that the Airbus manufacturing processes were a mess, and two, that the government owners of Airbus were not the least bit interested in fixing them. He too the job under the condition that in 100 days he would lay out the path to fix Airbus manufacturing and the board could either back it or fire him – no middle ground. The 100 days are up, he laid out the plan and, you guessed it, he’s gone.
This delightful chap is Mr. 
The Brits are smart enough to be among the earliest rats to leave the sinking ship. BAE Systems has bailed out of Airbus and is thinkin’ about suing them. The basis for the lawsuit is probably for not disclosing that their German and French partners are running a welfare program instead of a for-profit business.
This guy is the new boss at Airbus. His name is Louis Gallois and he has risen through the ranks of French civil service to the lofty position of serving as co-CEO of EADS. That the parent of Airbus has co-CEOs should tell you just about all you need to know about the leadership of this ship of fools.
Who needs a straight-talking manufacturing guy like Schreiff when you can have a former Minster of Finance and Defense? His appointment all but assures a continuation of Airbus ‘Politics Over Excellence’ culture.
You have to wonder just how little regard the government leaders in France and especially Germany have for manufacturing to run this business as they do. Investors in the U.S. and the U.K. have no interest at all in Airbus, while the Russians are the only ones buying in. Shouldn’t it raise a red flag when people with a track record for nosing out businesses likely to succeed won’t return your calls, while Russians used to seeing government grind manufacturing economies into the ground want to buy in?
The hot growth market for Airbus is in China. Everywhere else they are losing ground. This is to be expected, of course. Who in their right mind would want to fly in a product made by these civil servants in the event that they actually build one? Shouldn’t the Germans and the French back off on job protection for a minute or two and listen to the manufacturing pro while there are still jobs to protect?
A few weeks back, I challenged the sanity of Boeing’s outsourcing fleet of super sized airplanes. The immediate feedback was to point out that Boeing needed to source parts – even big parts like wings – all over the globe in order to get business from other countries. I would like to point out that (1) the Airbus fiasco is pretty good proof that building a business model around keeping governments happy is not a particularly effective one; and (2) who exactly are these governments going to buy their planes from if Boeing builds them in the place best for manufacturing instead of where the politicians want them to be built? Airbus?
Eric H says
“building a business model around keeping governments happy is not a particularly effective one”
That depends on whether those governments are your finance and board of destructors or your customer. The airbus fiasco shows that you should just say no to gov’t finance and direction. Well, unless you are a political entrepreneur who gets to cash out after the first billion euro check clears the bank. The Boeing model shows that you should just say yes to state monopolies who will actually buy something {cough Japan Airlines cough All Nippon Airways cough}.
On the other hand, building a business model around pissing governments off doesn’t work well, either, which is why Google and Yahoo bend over and take it from China.
This is a great article, Bill. I admire Mr. Streiff’s take it or leave it chutzpah. Unfortunately, both Airbus and Boeing have become largely subsidized by their respective governments, so we have a battle of two overly large behemoths and unnatural things are bound to occur. What can you tell us about Bombardier and Embraer?
Steve says
Can you explain, if Airbus’s planes are so bad that no sane person would want to fly on them, how they have in 5 of the last 6 years outsold Boeing? Airbus is also delivering more planes than Boeing. It seems most of the World’s major airlines don’t share your right-wing, anti-European viewpoint.