Airbus A380: Project Failure Lessons Learned

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Airbus 380

It is not very often that we can attribute a project failure directly to a culture that management has tried to change but for political reasons finds it impossible to do so. The project failure at Airbus is one such example. Airbus

When Airbus was founded in 1970 two major objectives prevailed. The first was to create a consortium of existing companies whose facilities had been scattered at sixteen sites in four European countries including France, Germany, Britain, and Spain.

The second was to transform these existing companies into a modern and integrated organization capable of competing more effectively with American companies that included such giants as Boeing, McDonnell Douglas and Lockheed. Today, the only two surviving commercial aircraft companies are Airbus and Boeing. Airbus now employs about 57,000 people

While this strategy did bringing sixteen organizations together, these disparate business units had trouble functioning as an integrated organization from the very beginning. Even by 2001, it was still seen as a loosely knit organization. A Financial Times article argued that the retention of production and engineering assets by the separate partner companies made Airbus nothing more than a “sales and marketing company” (Kevin, Survey “Europe Reinvented: Airbus has come of age.” Financial Times, February 2, 2001). An article in Aviation Week and Technology contended that while the companies collaborated on design they were unwilling to share financial data and sought to maximize the prices for the goods they provided to other business units in the consortium (Sparaco, Pierre, “Climate Conducive for Airbus Consolidation”, Aviation Week and Space Technology, March 19, 2001). Unfortunately, there was little evidence that the goals and objectives of the consortium had been met. Airbus Prepares for the A380

In 2000 Airbus undertook its most ambitious project ever, the A380. It was to be an aircraft designed to usher in a new era of superjumbo jets, capable of carrying up to 853 passengers and crew. Launch date was to be 2002.

At this time the company also announced that it had taken additional steps to integrate the consortium and announced a new administrative structure. This structure would physically locate top managers from each of the sixteen sites in one location. It was a reorganization that would put an end to the conflict and cross-purposes that often occurred with the more independent, informal, and geographically dispersed organization.

Yet, the change would prove to be inadequate.
Wiring Harness Fails to Install
Production problems began to surface in the spring of 2005. The French and German production facilities began blaming each other publicly when deliveries were postponed from the fall of 2005 to the spring of 2006. Then, in the fall of 2006, the pre-assembled wiring harnesses produced in the Hamburg plant failed to fit properly into the frame when the plane was in the assembly stage in the Toulouse plant.

Hamburg had designed the wiring harnesses using an older version of CATIA, software commonly used in the aircraft industry. The assembly plant in Toulouse, however, used the most up-to-date version of the software. Unfortunately, there were issues of compatibility between both versions and one consequence was that design specs could not flow electronically between the two plants. As a result, when it came time to install hundreds of miles of wiring cables into the fuselage of the aircraft in Toulouse, they failed to fit. Airbus was then left with no choice but to halt production, postpone deliveries of the aircraft for two years, and redesign the wiring system. The cost, expected to exceed $6 billion, would place the program over two years behind schedule. It was not until October 15, 2007 that the first aircraft was delivered to Singapore Airlines. Why Did the Project Fail?

An article in the Wall Street Journal suggested that the failure could not be...
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