Boeing Is Choking on Airbus' Fumes

Businessweek ^ | June 30,2003 | Stanley Holmes, with Carol Matlack, in Paris

[budanski]

It doesn't take a rocket scientist to know that something is shaking the core of the commercial-airplane business. Sure, terrorism, regional conflict, the SARS epidemic, and the sluggish economy have walloped the airline industry. But behind this turmoil, one trend remains constant: Airbus is emerging as the world's leading maker of commercial airplanes.

[longtermmemmory]

Boeing better do something fast. Fast means fast. The perception is that boeing is going to not be a viable supplier of big airliners to the civilian market.

[newgeezer]

This article is full of BAD news for those of us who supply parts to Boeing.

No mention of Airbus's heavy government subsidies from the Frogs. Did I miss something?

{ping}

[Squawk 8888]

Or small ones either. The 717 faces stiff competition not only from Airbus with the 100-seat A318, there are 90-seaters from Bombardier and Embraer coming into the market.

[microgood]

But Airbus insists it makes money on every plane.

Huh, I thought they were heavily subsidized by the EU.

[Dick Bachert]

and if there is ONE $ of US FOREIGN AID going to the Frogs, IT MUST STOP -- YESTERDAY!!!

[Mind-numbed Robot]

When Boeing execs chose Chicago over Dallas for their new headquarters location, I knew they couldn't last long. That kind of stupidity does not escape punishment.

Also, Airbus said they had sold about half the number of planes (A380) they need to break even and then said they make money on every plane. Sounds Clintonesque to me.

[Squawk 8888]

Sure the French subsidize Airbus to the Nth degree but that is mitigated by the ridiculous cost of employing people in that country- last I heard, for every dollar paid in wages they spent more than a dollar in benefits. All subsidies aside, airlines have to look at more than the price tag; the cost of ownership includes repairs (Airbus parts are far more expensive than Boeing) and fuel (Airbus is the clear winner in fuel efficiency).

[Wonder Warthog]

"Boeing better do something fast. Fast means fast. The perception is that boeing is going to not be a viable supplier of big airliners to the civilian market."

Hey! They are! They have moved their headquarters to Chicago, and are busily trying to coerce various states to subsidize their construction of the 7E7--ANYTHING except sticking to their core business of making better and cheaper airplanes.

It's called "rearranging the deck chairs on the Titanic", and is played by incompetent management everywhere.

[Publius6961]

Huh, I thought they were heavily subsidized by the EU.

Hey!
Cut that out.

"Subdized" money is free and doesn't count. I appears magically and has no role in this discussion.
Neither do "national" airlines.

Nor the fact that the folks with the most money are loath to give the Big Satan any business for the moment.

Perhaps, bin Laden had it right; trigger the proper speed bump in the American economy, and the socialist world bent will take care of the rest.

I wouldn't bet the farm on the long term success of this alignment of events, however.

[wjcsux]

One of Boeing's biggest problems in the Commercial aircraft market was the acquisition of McDonnell Douglas and all of their assoiated difficulties. MDAC was a has been in the commercial aircraft industry years ago. I know several people who work for Boeing. They say things haven't been good since.

[lelio]

They say things haven't been good since.
Well don't let Stonecipher know that, he appears to be running the show (into the ground).

[wjcsux]

Unfortunately, Boeing and MDAC merged. They have a lot of the MDAC management losers making decisions that effect the rest of the company. You mix clean water with dirty water, you get dirty water. That is the state of Boeing's management right now.

[ContentiousObjector]

No mention of Boeing's heavy government handouts via sleezy government leasing deals either

[Rodsomnia]

You have to question any company which supports a lame governor like CA's Gray Davis. I wonder how the europeans electrical rates compare with CA manufacturers electrical rates.

[BamaGirl]

When Boeing execs chose Chicago over Dallas for their new headquarters location, I knew they couldn't last long. That kind of stupidity does not escape punishment.

Why does the headquarters location matter? I am not arguing, just curious.

[ContentiousObjector]

Airbus has become profitable in its own right, while Boeing is porking up on government money like never before.

It's not 1974 anymore, Airbus has come into it's own.

[Don Corleone]

Build a Better Mousetrap.

[ContentiousObjector]

why the hell would France need American foreign aid?

The rebuilding of Europe has been complete for a very long time... like 50 years

[CdMGuy]

The A380 is a new model aircraft. They aren't making it yet, just taking orders. By their calculation, they already have a huge leg up on the number of orders they will need to break even on production of this aircraft. In other words, they are in good shape.

It seems to me the problem is far more than European subsidies. Boeing management needs to do a better job. Yes, it is tough competing against an aircraft that has subsidies, both in manufacturing and in financing of sales. However, as a passenger, I am far more impressed with the cabin design on Airbus jets than I am on Boeing jets. And, the airlines seem to like Airbus design features such as a standarized cockpit.

As for moving to Chicago that was mentioned by someone, I have to agree. The weather in Seattle is no bargain, but at least they do not have Chicago's winters. If they felt it urgent to get out of Seattle, why didn't they move to Texas with its more moderate weather and far lower taxes and friendly business environment. Maybe even Atlanta with its closer proximitry to Europe. But then there is the Asian market which is huge and Seattle is closer. Who knows. To me, it was just one of those decisions that sends a message about the management of Boeing.