Boeing Versus Airbus by Newhouse John

Author:Newhouse, John [Newhouse, John]
Language: eng
Format: mobi
Publisher: Vintage
Published: 2007-01-15T16:00:00+00:00

ALTHOUGH AIRBUS was still being described in Seattle as mainly a jobs program, it was drawing more of Boeing’s attention. According to an article in BusinessWeek in 1992, Airbus had begun to threaten Boeing. Airbus had some advantages. “It didn’t have Boeing’s long history of doing things one way,” said Boyd Givan, who, as noted, was the company’s chief financial officer for most of the 1990s. “It was more adaptable and was doing the thing better. Boeing liked the snap-in-place assembly technique.”16

Airbus, too, was streamlining procedures, reducing costs, and watching the Japanese carefully. It adopted seamless laser welding of fuselage assembly, instead of using rivets, and that helped with weight. Competing against Boeing was seen in Toulouse as being partly about improving technology and partly about lowering costs. “We can reduce our costs by a certain measure every year,” said Airbus executive Gerard Blanc. “That is how you stay competitive. It is all about mind-set. We employ fifty-five thousand people, who, along with our suppliers, must share a vision. That is the strength of the Japanese. They are so good at convincing themselves and then being followed.”17

“The Airbus factories and manufacturing processes are more modern than Boeing’s,” said James Womack, a management analyst and the founder and CEO of a nonprofit corporation called the Lean Enterprise Institute, in Brookline, Massachusetts. “Airbus,” he said, “uses more automation than Boeing…. It uses more robots than people to build fuselage shells at its plant.”18

Womack wrote a book with Daniel Jones called Lean Thinking for the Massachusetts Institute of Technology; it sold six hundred thousand copies. The book is based on the Toyota model and describes a business system for the twenty-first century. Among the companies examined by the authors was Pratt & Whitney. “If you could fix Pratt, you could fix anything,” they said.

Between 1995 and 1997, Womack spent eighteen months as a day-rate consultant to Boeing, under an arrangement made by Ron Woodard. His efforts, he said, “were aimed at halving production time, halving costs, and eliminating many of the mistakes.” He favored getting rid of half of the company’s vice presidents and a vast amount of factory space. How much, he wondered, would it cost to reconfigure the company? He discussed Boeing’s problems with Woodard shortly after arriving in Seattle. “I tried to get a sense of Boeing’s numbers,” he said. “But I couldn’t. Instead, I got engineering metrics—lift weight, lift drag, et cetera. But no cost data. I became the first guy to tell them the sky is falling. That’s hard.”19

The arrangement never came close to working, partly because Woodard and others were being told things they didn’t want to hear and partly because Womack is described as having exercised little restraint or discretion in saying what he had to say. One basically sympathetic executive characterized some of it as close to “inflammatory.” In any case, Womack failed to dent management’s thinking about its problems, and Woodard ended the arrangement. As for the Toyotaization of Boeing, nothing much was happening, and there would be no discernible progress for another five or so years.

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