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Airbus turmoil short-term boost for Boeing

A management shake-up at Airbus and its majority shareholder marks yet another sign of the turmoil at the European aircraft maker that could work to the advantage of rival Boeing.
/ Source: The Associated Press

A management shake-up at Airbus SAS and its majority shareholder marks yet another sign of the turmoil at the European aircraft maker that could work to the advantage of rival Boeing Co.

But some say the fact that Airbus and European Aeronautic Defence and Space Co. are moving quickly to try to solve those problems could pose challenges for Boeing in the long run, since it shows that Airbus is intent on rapidly turning its fortunes around.

On Sunday, Noel Forgeard, the co-chief executive of EADS, stepped down and was replaced by Louis Gallois, head of France's SNCF rail operator and former chairman of engine maker Snecma. EADS owns 80 percent of Airbus.

Airbus head Gustav Humbert also resigned and was succeeded by Christian Streiff, a former executive with building materials maker Compagnie de Saint-Gobain SA, EADS said in a statement.

The shake-up comes as Airbus is struggling to keep customers loyal amid production delays for its superjumbo A380. The European jetmaker also is fighting to win customers for its planned A350, and is widely expected to announce a redesign of the troubled aircraft.

The A350 would compete with Boeing's new 787, which has been very successful in the market in part because it promises to be more fuel-efficient than current models. The hot-selling 787 is one of the many signs of recent success at Boeing's commercial airplanes division, and also shows how the company has been able to capitalize off its rivals' problems.

"Airbus is fumbling and stumbling and bumbling, and everything is going right for Boeing at the moment, so it's going to take years for Airbus to recover," said aviation analyst Scott Hamilton of Leeham Co.

But Hamilton lauded Airbus for moving swiftly to get rid of managers who seemed to be responsible for the company's troubles. He noted that it took Boeing years to recover from its own production crisis in the late 1990s.

Chicago-based Boeing stumbled badly when it attempted to significantly ramp up production of the 737 while introducing a new version of the plane, and Hamilton said one problem was that the company did not replace key people quickly enough.

"If this new successor to Gustav Humbert is the production whiz that he is purported to be, then they'll get things straightened out sooner rather than later," Hamilton said of Airbus.

Boeing spokesman Todd Blecher declined to comment on the rival company's management shake-up.

"It's inappropriate for us to discuss what's going on at EADS and Airbus in terms of their management," he said.