Last October, in this space, we looked at the multi-billion euro cost of Airbus’ knowledge sharing failures.
We’ve continued researching this story and what we’ve learnt goes well beyond the € 4.8 billion profit hit parent company EADS will take over the coming four years. Production of the A380 was halted because of a wiring problem, namely that the wiring harness for the cabin power supply, lighting, and electronics systems was too short. This was due to the Airbus factory in Finkenwerder, Germany using an older version of CATIA design software from Dassault Systèmes than the Airbus factory in Toulouse, France. Hence, while groups in the two factories thought they were exchanging very detailed, exact information, it turns out that the incompatibilities between the two versions made such information exchange rife with errors.
Why were there multiple versions? Someone at Dassault put it succinctly, namely the “lack of foresight in process management at both the national and international level.” In addition, the company was unwilling, by all accounts, to invest in the training that would be necessary for an upgrade. Penny wise and pound foolish comes to mind.
But our story doesn’t end there. Airbus then demonstrated an inability to share knowledge, this time between customers and the company, when it unveiled its A350 aircraft. The A350 is in the mid-sized passenger plane market, estimated to be ca. 6,000 aircraft over the next 20 years. Chief competitor Boeing has been selling the 787 Dreamliner for the past two years and Airbus is behind Boeing by over 550 orders. Airbus thought they could get market share with a warmed-over version of an existing plane while Boeing was selling an aircraft that used innovative, high-tech materials that as a result was markedly more fuel efficient.
Had Airbus listened more closely to customers (a necessary part of knowledge sharing and collaboration), this error in judgment on their part may have been avoided.
The A380 problem made customers somewhat wary of Airbus; the A350 made customers flee to the competition. Only recently did Airbus introduce a version of the A350 that looks as if it may compete with the Boeing 787 but the 787 will be in the air several years before the A350.
In a few weeks we’ll be publishing an In-Depth Research Report looking at Airbus’ plight so stay tuned. We’ll let you know how the story ends.
Jonathan B. Spira is CEO and Chief Analyst at Basex.