Late Start has Perks for Airbus

Jul. 1--TOULOUSE, France -- Nobody will watch the debut this month of Boeing's 787 Dreamliner with greater interest than the 600 Airbus engineers here working around the clock to design a rival midsize jet.

The Airbus workers will be waiting for the production miscues that are inevitable in an aircraft as groundbreaking as the Dreamliner, made largely of composite materials. And they will try to steer their new plane clear of similar pitfalls when it rolls out in 2012.

That's one perk of being late, very late, to market, Airbus officials say.

Because of earlier strategic and design mistakes, Airbus' answer to the hot-selling Dreamliner, the A350 XWB, trails its counterpart by five years, a long lag time for an industry in which competing models usually debut within a year or two of each other.

Boeing has grabbed the early sales lead, racking up about 500 more orders for the 787 than Airbus has garnered for the A350. But officials at Airbus think their aircraft will be technically superior, in part because they will watch and learn from Boeing and take advantage of technological advances.

"Five years is a lot [of time], but it's a very useful lot," said Alan Pardoe, director of product marketing for the A350 and other long-range Airbus aircraft. "We've got five years more of materials, technology, development and research. Plus, we've got the airline endorsement of what Boeing is doing with the airplane to guide us."

Even so, Airbus knows that in other ways, such as potential loss of sales, time isn't on its side.

That's why Airbus is trying to shave 30 percent to 40 percent off the development time for its new jet while it attempts a major corporate restructuring that will shed 10,000 jobs and six plants across Europe.

The next few months could determine whether Airbus succeeds or falls further behind Chicago-based Boeing in their rivalry for the lucrative market for long-range jets.

Airbus must navigate tricky issues of nationalism and labor as it spins off three factories this month in joint ventures that may include foreign investors, while seeking buyers for three other plants. Three of the plants on the chopping block are in France, two in Germany and one in England, feeding concerns among French workers that they will lose clout and jobs to their German counterparts.

Then there always is the threat that labor unrest could paralyze Airbus, although the company's unions are divided on the restructuring plan, analysts say. Labor leaders are due to present their counterproposal for streamlining operations in early July.

"It sounds like they've got some potential problems here, some real tough decisions to make," said Paul Nisbet, aerospace analyst with Newport, R.I.-based JSA Research Inc

The European aerospace giant has strong motivation to meet its A350 deadlines, since it is spending about $15 billion to develop the new plane at a time when it is losing money. It won't begin to recoup its investment until the first aircraft are delivered in 2013.

Airbus also is trying to reclaim its reputation for top-flight engineering, which was tarnished with the embarrassing glitch that delayed production of its flagship, the double-decker A380 jet, by two years.

"The A380 is on track," said John Leahy, Airbus' chief operating officer and top salesman. "The first airplane will be delivered in October, and we're taking that production rate up to nearly 50 [planes] per year. We haven't forgotten how to build airplanes, much as the people in Seattle would like you to believe." While Boeing is headquartered in Chicago, its major facilities are on the West Coast.

Indeed, on a late June morning, the A380 factory in Toulouse was buzzing with workers and filled with five giant birds in various stages of assembly. Their components, completed in factories across Europe, are flown here in a specially-made bulbous jet called the Beluga. It takes workers just five days to snap the pieces together to form the main structure of the double-decker planes.