What's Next for Boeing?
In Randy Baseler's 32 years at Boeing, the company has evolved from the world's dominant manufacturer of commercial jets to part of a duopoly, with the European consortium Airbus, that competes fiercely over billions in aircraft orders. Airbus has outsold Boeing since 2001. But the European company has faltered this year, announcing an embarrassing delay on its future flagship, the A380 jumbo jet, followed by a change in CEOs. Baseler, now vice president for marketing in Boeing's commercial airplane division, sat down with Deputy Business Editor Rick Newman to discuss his top competitor, globalization, the new 787 Dreamliner, and the rebound of the U.S. airline industry.
Airbus has been hammered in the press for delays with the A380. Will Airbus bounce back? Airbus's product strategy is failing. In the '90s, they came out with all of these planes that were similar, lots of commonality. That's why they looked so brilliant. They used that as a strength. The company moved from an upstart to a point of parity with us in a very short time. That's why we think they'll be successful in the future. But now that they've filled out their product line, it's hard to go back and replace in the same way. Now that they're a mature company, they have to act differently.
When Airbus was launching the A380, the industry was hard on us. People said, "Airbus is taking away the big-aircraft market from you." But it depended on how you saw the market changing. We don't think airlines need more big airplanes. We think they need more point-to-point aircraft. That's where the 787 came from.
Is Boeing benefiting from Airbus's stumbles? Not really. I'm not aware of any A380 cancellations. Besides, if a customer came to us and said we want a 777 or a 747 and here's a big pile of money, we couldn't meet the demand. Our order book is full for the next few years.
You talk to their customers—the airlines. Do you think Airbus's customers are losing confidence in them? I think customers are still doing a wait-and-see with Airbus. …
But keep in mind, we want Airbus to be healthy. We think of the airplane manufacturers as an ecosystem. We need to keep the suppliers healthy, keep the engine manufacturers healthy. To do that, Airbus needs to be up and running well.
Have Airbus's problems cost it any orders yet? Hard to know. Orders for the A320 aren't as robust as they have been, but of course they put on a surge late last year to beat us. About 150 of the orders were from China, and they did it on the government's decision, not on the airlines' orders. But China took 150 from each of us.
Does it matter if Boeing is No. 1? We recognized that Airbus was going to at least catch us–that it would be a 50-50 market for a few years. But a lot of the reason they beat Boeing was on account of 9/11, when our biggest market suddenly shrunk. We had to cut production rates in half. They maintained their levels through pricing discounts.
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