Long before the European VLCT partners recognized that the joint effort with Boeing was doomed, they had already learned a vital lesson. There was simply no way a project of this scale could be managed under the existing Airbus GIE structural arrangement. Something would have to change.
But Airbus was in an unusual position. It had grown and prospered under the GIE structure, but as Airbus became larger and more successful, the limitations of the business structure were obviously beginning to hamper growth. It could not, for example, make the most of the economies of manufacturing enjoyed by Boeing and McDonnell Douglas and, as Jean Pierson observed, had effectively reached its “genetic limits.”
Under the GIE, Airbus was effectively a coordination and sales operation, not a manufacturer—exactly the excuse Boeing used to justify not inviting it to participate in the VLCT. As much of the design and manufacturing of the Airbus aircraft was carried out by the partners, any savings that came out of improvements in cost or design were enjoyed by the partners and their subcontractors rather than by Airbus itself. As a result, the savings could not be passed on to the airlines.
Due to the same restrictions, Airbus had far less ability to negotiate price reductions with its suppliers and partners than did Boeing. The bottom line was that Airbus was unable to take a lead on price, and this too would have to change before any A3XX launch was possible. In addition, Airbus’ ability to raise money for big projects or forge new relationships outside the traditional partnership was very limited. Worse still, although Airbus could not take advantage of manufacturing cost reductions realized by its partners, it was still vulnerable if any of them suffered financially.