Mission to change Boeing’s image in Europe

Date: 05/03/1998

By Chris Johnstone

SENDING over one of US aircraft company Boeing's bosses to re-cast its image in Europe and shed the “big, bad Boeing” tag is a good idea in principle.

In practice, however, it only takes a few minutes with plain-speaking Ron Woodard, president of Boeing Commercial Airplane Group, to realise that he is on what amounts to a mission impossible.

Woodard wants to change Boeing's image of being as American as apple pie.

“We have 436 suppliers in Europe and are the main customer of French aero-engine company Snecma,” he said on a recent round-Europe tour which took him to Brussels, London, Paris, Munich and Cologne.

“We want to make sure that Europe understands the Boeing presence, and the fact that there are 90,000 jobs a year because of Boeing sub-contracts.

Last year, we finished with 58&percent; of the market here with orders worth around 7.2 billion ecu.”

Europe and Boeing's interests do converge on some issues. But it takes only a few questions to encourage Woodard to attack his company's main rival, the indisputably more European Airbus Consortium, over everything from government subsidies to its launch programme for new aircraft types.

Rightly or wrongly, most Europeans will miss the subtlety of Boeing's message and read an attack on Airbus as an attack on one of the continent's few industrial success stories.

Nevertheless, Boeing, Airbus and just about everyone else in the aviation industry can find common ground when it comes to discussing the issue of congestion in the sky.

The inability of Europe to deal with its air traffic control (ATC) problems - which are leading to increased delays for airlines, threaten to brake market growth and add to environmental problems - are a shared concern.

“There are much greater environmental benefits to be made from tackling ATc problems than by looking for improved efficiency from aero engines,” says Woodard.

Boeing, like its counterparts on this side of the Atlantic, would welcome European action on the much-mooted issue of creating a single regulatory authority similar to the US Federal Aviation Authority (FAA) for approving new types of aircraft and investigating safety problems.

“At the moment, it is still individual European countries that take certification decisions. It adds considerable costs and complexity to the process. Europe's Joint Aviation Authorities just act as a clearing point for individual national issues,” says Woodard, adding: “This is a high priority for the UK presidency and for Transport Commissioner Neil Kinnock.”

Waving its European credentials, Boeing also believes that it should be allowed easier access to EU research and development programmes. “NASa research is open to everyone regardless of their origin. Research in Europe is not open to people outside Europe,” complains Woodard.

Last year - the regulatory rumpus over Boeing's take-over of McDonnell Douglas apart - was a good one for the Seattle-based firm. The Asian crisis is likely to wipe out 20 new orders annually for the next three years from the region, but that should hardly make a dent in the company's huge backlog of orders.

Boeing would like to put the battle over McDonnell Douglas behind it, but Europe's response still raises questions. “On the civil side, I was just amazed by the reaction. Douglas was such a small percentage of the business, just 3&percent;. The initial reaction was an okay from Airbus. Then it became a cause celebre,” says Woodard, adding: “I was surprised there was not more made of the military side.”

Some of the misconceptions which surfaced around the deal are still being put right, such as the idea that Boeing also wanted to move in on aircraft maintenance activities. “We never wanted to compete head-on with airlines such as Lufthansa,” says Woodard.

Airbus' plans to launch a new, large passenger aircraft attract only criticism from Woodard as he sums up all that he regards as worst about the European consortium.

“We were unable to find a market for a very large aircraft. We believe firmly that if you are in private business trying to make money, you will not make that aircraft,” he says. “I think the Europeans do not understand the cost of development. They are talking about an 8-billion-ecu programme.

I think it could be running into twice that.”

If Airbus is so confident about the market for the new aircraft, argues Woodward, then it should be able to convince banks to come up with the development funds and not need to rely on the traditional formula of repayable government loans.

“We would support our government in any attempt to renegotiate the current EU-US agreement on aviation subsidies so that it creates a level playing-field,” he adds.