Airbus superjumbo mess not just tangled in wires

HAMBURG, Germany — In the dawning effort to set things right at Airbus' sprawling production plant here, one of modern industry's biggest meltdowns, is a tale of two airplane-production hangars and two countries, Germany and France.

Nearly 600 people should be hard at work in the key production hangar here, where Airbus planned to assemble the giant sections of the world's largest passenger airplane, the A380.

Instead, the quiet is broken only by music playing softly on stereo speakers a worker sneaked in. Only a few dozen employees tinker on eight airplane carcasses clogging a production line that cost some $15 billion to develop.

The workers essentially are hand-building some of the company's first two-dozen A380s.

Airbus' superjumbo jet program was launched before Boeing's big hit, the 787 Dreamliner, but the A380 now is two years behind schedule. The production delay will cost Airbus' parent company, European Aeronautic Defence & Space (EADS), $6.1 billion is operating profit over the next four years.

In Hangar 42 nearby, it is a different scene. Dozens of aerospace engineers are in a mad dash to untangle the A380's myriad problems. They huddle in front of computer terminals, set up on 15-foot-long folding tables, so that they can be in constant contact with workers in blue jumpsuits investigating a hobbled A380.

The workers, confronted with bundles of wire that won't bend in the right places and cables that come up short, explain the problems to the engineers and urge them to design new ones. And quickly.

Communication problem

The engineers are bogged down by computers that can't talk to one another. One displays their work in three-dimensional images, the other is strictly 2-D. The breakdown fouls the effort to design a new part, get it built and get the A380 back into full production.

The line won't run full speed until 2010, if all goes well. Biding their time until then, thousands of workers are idle or on part-time shifts.

Yet others labor furiously, redesigning parts and installing them as they arrive, all in the rush to get the A380 on track.

Workers in Hamburg and Airbus' other facilities have worried, hurried and waited since the plane maker in October announced that breakdowns on its A380 production line would put deliveries of the new plane two years behind schedule.

The production problems are especially tough to manage because the rest of Airbus' system is running full steam.

The company will deliver a record number of smaller aircraft this year, 430, outdistancing archrival Boeing and topping 400 for the first time. In addition, Airbus last month announced it will launch a midsize aircraft, the A350, to compete with Boeing's hot-selling 787.

But no matter how well the rest of the business might run, Airbus can't declare success as long as the A380's problems remain unsolved.

An examination of what has gone wrong is a much broader issue than parts that don't fit and computer systems that can't communicate with one another. Indeed, corporate and European politics are as much to blame for Airbus problems as the breakdown between computer-design systems in France and Germany.

A bitter battle for control of EADS last summer came to a head when the A380's emerging crisis should have demanded top management's attention.

Cultural issues also are at play. Workers in France and Germany don't necessarily trust each other. French workers suspect the Germans covered up problems or ignored them to keep work for themselves.

To move forward, the company has had to work out labor agreements in both countries, and a massive reshuffling at the top of Airbus has occurred.

Worse still, the euro's 50 percent rise since 2000 has gouged into Airbus' profit, primarily because airplanes are priced in weaker dollars.

Years of redesign

At full production, Airbus hopes by 2010 to produce four of the massive A380s per month. But it will deliver only one next year and 13 in 2008.

The reason: It will take years to redesign significant parts on the production process and move those planes clogging the line.

Tom Williams, head of production at Airbus, ticks off the immensity of the problem.

Paging through charts, diagrams and photographs marked "Airbus Confidential," Williams notes there are almost 1,200 functions to control the plane. That takes 98,000 wires and 40,000 connectors.

The digital design system has 500,000 models. All those must be kept in sync by mismatched computer-design systems.

Getting to the core of the problems will take more than industrial know-how.

"It will require trade-offs and sacrifices," Williams said. "There are things that make you say, from a pure industrialist's point of view, is that the simplest solution? Maybe not. But it has to work at a political level, as well."

Politics have been part of Airbus from the time it was founded in 1970 as an example of European cooperation and technological wizardry. And the A380 was supposed to be a crowning symbol of trans-European industrial glory.

Instead, the A380 is becoming a symbol of monumental failure, as the Tribune found during the first visit by a reporter to the Airbus hangars since the company announced its latest setback, another one-year production delay.

Canceled orders

FedEx canceled its order and turned to Boeing. Virgin Airways put its order on hold. Lufthansa also ordered a freighter version of Boeing's 747 jumbo jet. The largest A380 buyer, Emirates Airline, sent auditors to Airbus' plants and blamed management for delays that are putting Emirates' aggressive growth strategy at risk.

The trouble really began in 2000, as Airbus executives were working hard to resolve a control dispute among its German, French, British and Spanish owners by consolidating into a company jointly run by co-CEOs from France and Germany.

The A380 was the first big project of the newly christened EADS. It had been conceived as one of the most ambitious undertakings of the Industrial Age.

Nose sections would be built in France, fuselages in Germany, wings in Great Britain and tails in Spain.

The city-state of Hamburg filled in acres of the River Elbe to allow Airbus to expand its plant. French taxpayers paid to widen roads and bridges so that wings shipped from Wales could reach final assembly at corporate headquarters in Toulouse.

Then-Airbus CEO Noël Forgeard tried to unify operations by asking engineers in all the countries to work on a single design system.

Dassault Systemes' Catia 5 is a cutting-edge workstation capable of delivering three-dimensional images of airplane parts. Those designs then can be entered into a central model of the plane known as the digital mock-up.

Engineers in Germany balked. They continued working on an earlier-generation Catia 4. But that system renders images only in two dimensions, risking a design mismatch.

Worse yet, said Williams, the German engineers placed their work into the digital mock-up in ways that distorted results.

"We were just storing up a long-term problem," Williams said.

Wiring troubles

Those problems appeared in full bloom soon after the A380 migrated from the design phase into industrial production in mid-2004.

Some wires were too short to connect the main fuselage section to the nose. Some were too thick and couldn't make the bends that the design system said they could.

For two years, Airbus downplayed the troubles. But by summer, the Frenchman Forgeard was forced out, and his German successor, Christian Streiff, fired the leader of the A380 program.

Williams took over as head of all Airbus production. Days later, Airbus had another new CEO. Louis Gallois, an aerospace veteran who recently had run the French National Railways, would take on the job of fixing the A380 and restructuring Airbus.

Despite the turmoil, at least one key question was settled by the time Gallois took over. The production line would not be shut down altogether.

Streiff seriously considered that option. As he dug into the problems last summer, he learned they went deeper than he had feared.

Under pressure from directors at EADS, which had hired its own outside consultants, Streiff began to suspect a complete shutdown was the only solution, former colleagues say.

John Leahy, Airbus' top sales executive, argued strenuously against that . Once stopped, the line might not restart for two years. By then, many of the 166 firm orders from 15 customers would be gone, he warned.

"You've got some commitments out there, guys," Leahy recalled saying. "We know we can build some. Let's just get some airplanes out the door."

With that issue settled, Gallois could take on more. In early October, he said the company soon would announce a new restructuring program, called Power8. Gallois would seek to find $2.7 billion in annual savings by 2010.

Three of the program's eight main initiatives remain unsettled: how to optimize Airbus' final assembly lines, how to increase the role of outside suppliers, and whether the industrial structure of the company made sense.

In Hamburg, fear is widespread that Airbus will "optimize" the production lines by moving all A380 production to France. Streiff himself raised that possibility during a visit.

Airbus officials admit it is hard to defend, from a purely industrial standpoint, an Airbus system that builds a fuselage in Hamburg, ships it to Toulouse for attachment of the wings, nose and tail, then returns it to Hamburg for cabin installation and painting.

Production realignment

Tim Clark, president of Emirates, has told Airbus he would like to see a major realignment that includes a reconsideration of the Hamburg setup.

"With a process review and a re-engineering of Airbus, I've said you could produce airplanes 20 percent to 30 percent cheaper if you realigned," he said.

Just a few days after Gallois took charge, though, he quietly sent a message to Hamburg's union leadership that appears intended to reduce anxiety about the plant's future.

Horst Niehus, head of Airbus Germany's works council, was among Gallois' first visitors in the CEO's new office in Toulouse. When Niehus asked for assurances that Hamburg would maintain its role in A380 production, Gallois crafted a carefully worded answer.

"Everything has to be on the table," Niehus recalled Gallois saying. "But I know what it would mean to take something from Hamburg and give it to Toulouse."

Niehus interprets the statement as a promise the A380 will stay in Hamburg.

Still, major restructuring is coming, and fears about Gallois' plans are dividing unions at Airbus. French union leaders blame the Germans for not addressing the A380's problems more aggressively right away.

"They wanted to hide it as long as they could. The Germans wanted to save German jobs," said Jean-Francois Knepper, leader of the powerful Force Ouvrière union at Toulouse and co-head of the European workers committee at Airbus.

The brunt of the restructuring should come in Germany, Knepper said.

"If Airbus is a tree, France has the thriving branches," he said. "If there are dead branches to be cut, they're not in France."

There are divisions inside the plants too. At Hamburg, the A320 line is running full speed, straining to keep pace with Airbus' record sales, even as A380 production is nearly halted.

Airbus has addressed the problem by cutting back A380 production workers to 28 hours a week, yet giving them full pay. Once the A380 line moves to full production next year, workers will even up by working overtime without extra pay.

Even down to 28 hours, there is not enough for workers to do. Dozens are sent each day to mop halls that are spotlessly clean. Hundreds have been moved to the A320 line, but they're not always welcomed.

"The A320 workers feel that everything is going just right, [and] the A380 workers just get in the way," Niehus said. Also, the A320 workers would be earning significant overtime if the A380 workers weren't there.

No such divisive issues have surfaced in Toulouse. More than 1,000 engineers from Hamburg, and nearly 3,000 visiting workers in all, are on site trying to fix the problems that the company's balky computer systems helped create.

Signs of the production breakdown are everywhere. One of the most obvious: an A380 parked at the edge of Toulouse's cavernous assembly hangar.

The plane should be on its way to Hamburg to have the passenger cabin assembled and the seats installed before heading to the paint bay. Instead, it is surrounded by scaffolding.

From tip to tail and under the wings as well, workers make their way along the lattice structures, stringing wires by hand as fixes come in.

Not just stringing wires

Andreas Fehring, a quality expert from Hamburg who came to help direct the A380 recovery effort in Toulouse, shows why there is more to fixing the problem than just stringing new wires.

Every change must be documented, for starters. Changes must be entered into the airline's production records and into the A380 design module.

Wires can't just be run in and out. Many are hidden behind air-conditioning ducts and the like. Fehring points to an inch-thick bundle that snakes behind a large metal box.

"This is not just, 'I pull one meter of wire out and put another meter of wire in,' " he said.

Fehring warns that no one should be misled by the relative quiet of the plant, and the fact that eight planes at Toulouse are sitting still, not moving through the production system as they should be.

"This is not a drag-your-feet program," Fehring said. "There is still pressure in the system."

An Airbus employee works on electrical wiring of the A380 at the Toulouse, France, production line. Wiring problems have disrupted production of the superjumbo jet. (MARC DE TIENDA / BLOOMBERG NEWS)