Customer Reviews

Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business

5 star:		(11)
4 star:		(8)
3 star:		(11)
2 star:		(7)
1 star:		(4)

 

 

Common wisdom states that Boeing is a commercial airline powerhouse, manufacturing the world's best planes with state of the art manufacturing processes, led by a first rate management staff. On the other side is Airbus, a bit-player whose survival has only been sustained via state-supported welfare programs, whose sponsors pour endless funds into this money-losing effort. In Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business, John Newhouse shows how both perceptions are erroneous. Boeing is far from being the world-class company most perceive it to be, and Airbus in fact makes some pretty good airplanes.

The issue of Boeing vs. Airbus is one with significant consequences, and with a significant amount of interviewing and research, John Newhouse has written a fascinating and rewarding work on this most important topic.

For anyone with an interest in the aviation industry, Boeing Versus Airbus is a most enjoyable and fascinating book. In chapter after chapter, the book details what goes on behind the door or Boeing and Airbus.

Newhouse lays it on the table in chapter 1 when he notes that when Airbus outsold Boeing in 2004 and 2005, the root cause of this historic juxtaposition was that Boeing's troubles were the result of a number of factors; from their arrogance, a tendency to rest on their laurels, taking their customers for granted, combined with a corporate culture enmeshed in politics.

Boeing then realized the depths of its problems and attempted to change its course. This, combined with bad-luck and mismanagement at Airbus, contributed to Airbus finding itself a distant number two in 2006. So much so that Airbus NA President Henri Courpron lamented that Airbus failed to manage being number one. Airbus made the same mistake Boeing made earlier; they got caught looking back, not ahead.

Newhouse notes that the success of Airbus was not that it is inherently lucky or unlucky. Rather, Airbus was building very good airplanes and doing in a less expensive manner than Boeing, and with a much smaller workforce. Airbus basically took pages from Boeing's playbook and beat them at their own game.

Chapter 3 details what has long been a thorn in Boeing's side - government subsidies to Airbus. For years, Boeing has complained that government subsidies gave Airbus an unfair advantage. Boeing has brought this issue up with various US government officials and has also taken this issue to the WTO. Newhouse notes that most of the arguments on either side of the subsidies question were complex, often more than a little contrived, and often unconvincing. It is Newhouse's opinion that Boeing was mistaken in constantly bringing up the subsidy issue, especially when the situation and timing was irrelevant.

On the other side, Airbus has long contended that Boeing receives similar government support, albeit in a different manner. Airbus maintains that US technology flows back and forth between the military and civilian sectors, with Boeing as the main beneficiary.

Chapter 4 digresses someone from the direct Boeing/Airbus conflict and discusses the issue of low-cost carriers (LCC), such as Southwest Airlines and JetBlue. The deregulation of the airline industry was a double-edged sword, in that it caused huge growth, and huge orders for Boeing and Airbus. But mismanagement by the major carriers combined with the low-cost of the LCC, created numerous headaches for both Boeing and Airbus.

Newhouse also notes that legacy union rules have hurt the major carriers and directly helped the LCC. Since the LCC are not saddled with austere work rules, they are able to offer quicker turn around times on their flights, in addition to other secondary benefits.

In various parts of the book, Newhouse clarifies some longstanding notions about Boeing. First off, when most people think of Boeing, they tend to think of a world class organization. Yet this is not the case. Boeing, while it makes great airplanes, has not always been a company without production problems. Similarly, most think that the 747 is Boeing's most profitable aircraft. But according to Newhouse, it is the 767-300 (extended-range version) which is indeed Boeing's most profitable aircraft.

Overall, the story of Boeing vs. Airbus is a never ending and ever changing battle of pure competition, combined with good timing and good luck. This battle has been, as Newhouse aptly describes a "seesaw battle between the world's two remaining manufacturers of big airliners; mighty Boeing and the arriviste Airbus, both massive corporations and emblems of national pride".

One of the recurring themes in the book is the dynamic nature of the industry. As the book was going to press, Alan Mulally who was executive vice president of the Boeing Company, and president and chief executive officer of Boeing Commercial Airplanes, left the company to become President and CEO of the Ford Motor Company. Ironically, the January 1, 2007 issue of Aviation Week and Space Technology named Mulally as its 2006 Person of the Year.

This dynamic made 2006 Boeing's year in which they sold a record 1,044 commercial airplanes worldwide, eclipsing Airbus for the first time in six years. The 2006 orders were worth approximately $114 billion at list prices. Nonetheless, Boeing's orders fell just short of the Airbus industry record of 1,055 planes in 2005.

The story of Boeing vs. Airbus is a fascinating one and Newhouse has done an excellent job in detailing that. Anyone with an interest in the airline and aviation sectors, including aviation enthusiasts will find this book a fascinating and timely read.

As someone who was in Boeing management through this time period, I found the book to be disappointing. It appears to me that Newhouse set out to extend his very useful "A Sporty Game" to show how Airbus not only came from behind, but totally overran Boeing in the commercial airplane market. Then, when he had that story almost ready to publish, the Airbus speeding train started to come off the tracks. So, instead of waiting for the train wreck to play itself out, he patched in some of the latest events and rushed into print - leaving a very muddled story for the average reader. In my view the book would have been much more interesting and useful if the author - and publisher - had had the patience to wait another 18 months or so for the situation to settle down, and then built the book around a more balanced story line.

By the way, to try to tell the story of Boeing leadership through this period without honestly describing the key role that Alan Mulally played in the entire approach to the post-777 airplane development strategy has led to a very distorted picture.

You fellow Bus.Ad. majors or those who have taken such courses, know the case study method. This is story of a market which became dominated by Boeing, but likely due to arrogance, complacency, merger and EU mkt. contender hungry to dethrone, created a volatile highly competitive twosome now vying for global jet market.

Granted this is not well structured book, but the historical market sequence it describes is not so logical and structured as other reviewers might have desired. Trends are shown however, and followed-up and played out throughout the pages.

Not knowing really anything about such a market, intrigued now by all the breaking drama: possible entry of Asian competitor from likely Japanese or Chinese; role of government subsidy; McDac culture change at Boeing. These and more are all unfolded as they chronoligally played themselves out.

What strikes one as true weakness in American industry is our obsession with short-term profit/stock price versus market share. Interesting how intelligent market share aggression is managed so well by Japanese while not at the expense of profit nor technology. These are result of market share, not means.

Yesterday's big news of A380's landings here took on perspective from this read. Locally interested in brief snippets about Ford's new head with a Boeing past.

Great read

First off this book is a lot heavier on Boeing than Airbus. Since Boeing is older and in the US it's understandable. I've been facinated by the war between the two companies for a while now. This book has finally filled in the gaps and more. It also led to the answer why Air Canada has 120 A320's that I flew on last month. And if that's a more confortable, modern airliner than the 737...then Boeing better bite the bullet and start desigining it's replacement!
The book can get a little dry in places and there are an awful lot of names to keep track of. But those are few and far between and there is tonnes of facinating information. If you aren't a huge aerospace junky but have a casual interest then this book is for you. I find that I don't see airplanes quite the same as before I read this book.

Newhouse's previous book on commercial aviation, The Sporty Game, was an excellent overview of a highly secretive industry. This book is even better. He details not only the fierce rivalry between two profoundly dysfunctional companies, but the dogfights between engine manufacturers, airlines, aircraft leasing companies, low cost carriers, legacy airlines and so much more most of us never dream of when we shuffle on board a cramped tube full of humanity. He seems to have interviewed nearly everyone of consequence in the industry for this book. Highly recommended to anyone who wants to know what real high-stakes bet-the-house gambling is really like.

This is a book about the emergence of two companies that build and sell passenger aircraft, and their interplay in the worldwide arena. The story features two differently-structured entities, the people behind them, and their world business positions. The reader learns enough about the corporations to really animate the people stories.

I purchased this book as an armchair airplane enthusiast on the eve of the A380's first landing. And I agree with the positive reviews of this work which appear on this board. I write separately to add that this book benefits from Newhouse's experience as a journalist and policy analyst, especially with his firm, professional footprint in Europe (Airbus's home turf) which he appears to have established some time before he set his pen to the aircraft industry. His credentials appear to have landed him private access to high-level personalities with both corporations. Newhouse even gives you contents of phone calls.

This access is special. It lets the reader peer into the minds that shape this industry; that surprised and pleased me. This industry appears fed by human ingenuity, hobbled by human flaw, and energized by a type-A "bet the farm" mentality. And Newhouse's access joins with the superb writing to make this book completely unique. I really cannot say enough good things about the writing; Newhouse really captures the narrative power of the English language.

This was my first Newhouse book. I found it a page turner and a delight.

Boeing is a very important American company that has gone from fantastic success to a serious downturn (fueled largely by complacency), and appears now in a major resurgence. This is all good fodder for an important story. Newhouse, however, squanders the opportunity to explain this journey in a useful manner that would help others - instead, "Boeing vs. Airbus" is largely a collection of seemingly infinite anecdotes and quotes without an integrating or convincing perspective.

For example, how bad were Boeing's assembly and design processes prior to the 777, in COMPARATIVE AND QUANTITATIVE TERMS? Specifically, what was done to improve, and what steps were most important? (Newhouse fails to even mention Boeing's data-processing problems - duplicated, costly, and non-communicative data-bases and systems.) How important a contribution did CATIA software make to designing the 777? Why did Boeing make such a seeming bad acquisition of McDonnell-Douglas - not only overpaying, but also ultimately putting those in charge while McDonnell-Douglas collapsed in charge of Boeing? And on the other side, why has Airbus had so many problems with the A380's wiring - a topic not referenced at all by Newhouse?

Most, if not all, of Newhouse's material has been readily available in business periodicals - in fact, "Boeing vs. Airbus" doesn't even capture all that was available.

Bottom-Line: Read something else.

John Newhouse, an experienced journalist and former "New Yorker" writer, has already written one book on the airplane industry ("The Sporty Game"). His fans will welcome the return of his expert insights, and may see this as a bonus supplement or extension. He has collected some fascinating new material for this work, so it is deeply informative, though perhaps not as dramatic as its title portends, since the titular competitors take turns winning. Newhouse clearly conducted extensive fresh research, and he presents interesting interview material throughout, although he gets a little awkward when he uses numerical data. We recommends this look behind the hangar doors of the airplane industry to business historians and, especially, to aviation buffs.

As a Boeing shareholder for a few years I followed the battle with Airbus very closely in the newspapers, on the internet and in the news magazines. As such, I didn't find too much new or interesting other then some of the details and stories about the engine manufacturer's (GE, Rolls, Pratt) battles and of course some tales about a heavy handed Jack Welch. If you have an interest in aviation but didn't track this story closely you might find it more interesting then myself.

After seeing a review of the book in BusinessWeek and then looking at what people wrote in the Amazon reviews (which were mostly five stars at that point in early February), I bought the book and read it. As someone who is fascinated the planes, has traveled on planes a lot, and has followed the Airbus/Boeing rivalry in the papers over the years, I was eagerly anticipating reading the story.

While I did enjoy a number of vignettes and found parts interesting, I agree with some of the recent reviews in that significantly more editing work could have been done to bring more coherency to the chapters and the overall story. Many times I found myself questioning what the point of a particular chapter was since there seemed to be a lot of jumping around.

Clearly the book was very well researched and there are some good insights into the industry dynamics. Unless one is an ardent plane enthusiast, I would not strongly recommend this book.