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August 6, 2008

Culture is only one aspect of the problem

This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Addison Schonland, PartnerAddison Schonland
Partner, Innovation Analysis Group
Implications: Airbus' employees are from across Europe and now stretches as far as China.  The cultures these people come from cannot be ignored or papered over.

Analysis: It is generally accepted that the best managers are those that strive to streamline business around core competencies. Great business school stuff isn't it?  But business school teaches little about politics - unless perhaps you went to a famous French Ecole, where the swampy areas between business and politics are manifest and "taught".

Airbus is facing culture shock on a grand scale. Adding a factory in China will only add more complexity. As the article points out, Germans and French have decidedly different ways of doing things. Imagine then when Airbus decides that its language will be English. Not even the Spanish will appreciate that.

Airbus (and its parent EADS) are having a tough time with labor. Its Power8Plus is going to hurt somebody - everyone knows this, but nobody is sure who. Its top managers remain under a cloud from insider trading. The weak dollar is adding costs to the firm, whose production costs are in Euros. It nearly won the USAF tanker - but that is now bungled (no fault of Airbus or EADS) and a plant planned for Alabama is on hold. Its A400M transport plane is running late - very late. Its A350XWB is adding sales but is already late, compared to the 787 against which is was to primarily compete.

This volley of aggravation makes painful reading. Now revisit the premise of the article. Yes cultures are clashing. Airbus has a huge number of part time workers (that's a big surprise by the way). Imagine the rising complexity from the EU that want to protect jobs as Airbus wants to shed them.

By the way please do not ignore the latest strike at Lufthansa. This is a harbinger of things to come.  Airbus' labor is going to be asking for salary raises.  Those raises are priced in Euros. More ouch to come.

Other Analyses of the Same Source Article:
Was ist denn hier los? Quoi?
August 12, 2008, Author: GLG Expert Contributor
Lack Of A Good Plan Cannot Be Blamed On Culture Differences
August 6, 2008, Author: GLG Expert Contributor
Airbus cultural differences
July 17, 2008, Author: GLG Expert Contributor
More A380 wiring pain
July 17, 2008, Author: Addison Schonland, Partner, Innovation Analysis Group

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