Boeing versus Airbus: The Inside Story of the Greatest International Competition in Business (Vintage) [Paperback]

John Newhouse (Author)

Book Description

Series: Vintage | Publication Date: January 8, 2008

The commercial airline industry is one of the most volatile, dog-eat-dog enterprises in the world, and in the late 1990s, Europe’s Airbus overtook America’s Boeing as the preeminent aircraft manufacturer. However, Airbus quickly succumbed to the same complacency it once challenged, and Boeing regained its precarious place on top. Now, after years of heated battle and mismanagement, both companies face the challenge of serving burgeoning Asian markets and stiff competition from China and Japan. Combining insider knowledge with vivid prose and insight, John Newhouse delivers a riveting story of these two titans of the sky and their struggles to stay in the air.

Editorial Reviews

From Publishers Weekly

In this update of his 1982 study of the aviation industry, The Sporty Game, Newhouse takes us inside the 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, are worth exploring at length. Yet while the former New Yorker writer has invested a tremendous amount of effort in interviews and research, he fails to assemble his facts, quotes and informed judgments into a coherent story. Newhouse introduces a fleet of issues: international sensitivities, cost overruns, governance structure, missed deadlines, the U.S. airline crisis, purchase negotiations, engine mechanics, government subsidies, the economics of plane size, the composition of airplane wings. But his touch is too light. Strong personalities—most prominently, Boeing's controversial CEOs—flit in and out, never quite coming to life; the planes themselves fare no better despite pages of description. The thousands who work in the airplane and airline industries may enjoy the details; the rest of us—even frequent fliers—might not be as interested. (Jan. 16)
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. --This text refers to an out of print or unavailable edition of this title.

From Booklist

Newhouse, former government advisor, tells the story of making and selling passenger airplanes and presents a case study from 1985 to the present of two industry giants, Boeing and its archrival, Europe's Airbus. The author paints a picture of a fiercely competitive industry that eliminates participants who misread the market; who build planes too big, too small, or too costly; who match new planes with wrong engines; or who are just unlucky. The financial stakes are enormous. Today Boeing and Airbus are the sole providers of large airplanes, and we learn about their strengths and weaknesses and how their fortunes ebbed and flowed through the years. This is also a human story of the players within these massive organizations and their very influential governments. The author concludes that each company will capture close to a 50 percent market share and "each is likely to do well much of the time and even prosper," making airlines and air travelers the winners. An excellent book. Mary Whaley
Copyright © American Library Association. All rights reserved --This text refers to an out of print or unavailable edition of this title.

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Product Details

• Paperback: 272 pages
• Publisher: Vintage (January 8, 2008)
• Language: English
• ISBN-10: 1400078725
• ISBN-13: 978-1400078721
• Product Dimensions: 5.2 x 0.6 x 8 inches
• Shipping Weight: 8.5 ounces (View shipping rates and policies)
• Average Customer Review: 3.4 out of 5 stars  See all reviews (41 customer reviews)
• Amazon Best Sellers Rank: #212,601 in Books (See Top 100 in Books)
  • #65 in Books > Business & Investing > Industries & Professions > Transportation

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Customer Reviews

Most Helpful Customer Reviews

37 of 38 people found the following review helpful:

5.0 out of 5 stars A fascinating look at the rivalry between Airbus and Boeing, January 16, 2007

By 

Ben Rothke "Author of 'Computer Security: 20 ... (USA) - See all my reviews
(REAL NAME)   

This review is from: Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business (Hardcover)

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.

27 of 30 people found the following review helpful:

3.0 out of 5 stars A muddled and incomplete story, February 15, 2007

By 

R. Bengelink (Seattle, WA) - See all my reviews
(REAL NAME)   

This review is from: Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business (Hardcover)

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.

16 of 17 people found the following review helpful:

5.0 out of 5 stars Massive Case Study for Vital Industry, March 20, 2007

By 

rodboomboom (Dearborn, Michigan United States) - See all my reviews
(VINE VOICE)    (HALL OF FAME REVIEWER)   

This review is from: Boeing Versus Airbus: The Inside Story of the Greatest International Competition in Business (Hardcover)

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