ECONOMY

Charismatic managers leave their mark on firms

How can an aircraft businessman land safely in the world of four wheels? Does this unconventional transfer raise questions about industrial espionage? And how fierce is the competition between Boeing and Airbus? Dr James C. Seferis offers Kathimerini an interesting viewpoint on these issues. He is a professor of Polymeric Composite Materials with rich experience at universities in the USA, Europe and Asia. He has also been a consultant for many American (Boeing, Dupont), European (Airbus, CIBA) and Asian companies (Korean Air, Mitsui), and is a corresponding member of the Academy of Athens. «In the past, I have been closely associated with Boeing and I have supervised the PhD of its former CEO, Phil Condit,» notes Seferis. Since then, many things have changed. Condit retired three years ago, the world has experienced the effects of 9/11 and in 2005 Airbus edged ahead of Boeing. The aircraft industry operates by the rules of supply and demand in conditions of heavy competition. «I am a teacher, not an industrial spy; I supply knowledge and can teach both Boeing and Airbus how to cooperate and how to compete,» the Greek professor says. «As the cost of conventional fuel goes up, the future of aircraft engineering and the car industry lies in lighter materials, which is my very specialism. The Boeing 787 Dreamliner was constructed from such materials after some research of mine. Furthermore, in the last few years, I have been doing research on the production of biofuels,» he tells Kathimerini. Another point is how CEOs can place their enterprises in the global market so that the development of products leads to profits. «When Carlos Ghosn took over at Nissan (in addition to Renault), he invested in development and new models and had spectacular results,» says Seferis. Charismatic leading figures always leave their mark on the companies they manage. Alan Mulally, head of the civil aviation aircraft department at Boeing since the late 1990s, had been groomed as the next CEO. However, the «outsider» Jim McNerney was chosen, coming in from 3M, and taking over at Boeing on January 1, 2005, in order to reinstate its prestige after a number of scandals. «Mulally was aggrieved, because he had been chosen as the heir by Phil Condit,» Seferis points out. «I remember I had taught him about polymeric composite materials, using a tennis racket as an example. He is an excellent tennis player.» His next «smash» could only be another first, this time in cars. In the past Mulally had applied his experience in the car industry to compete with Airbus in aircraft assemblage. He specifically adopted the flexible system of Toyota, in which an aircraft is assembled within four days instead of 20. As Ford’s CEO, he is today considered capable of applying a painful streamlining program, as he had done at Boeing. «Employees at Boeing insist on getting fired; at Ford they believe they will be there for ever and that Detroit will always be Detroit,» the Greek professor notes. So how will Toyota respond now that Mulally is returning to the car industry, bringing along some of its «secrets»? «Know-how is no one’s property but it is up to CEOs how they use it – this also applies to Christian Streiff, who headed Airbus for a brief period before going to Peugeot-Citroen,» says Seferis and adds: «The question remains unanswered as to which partnership Mulally will choose to help Ford to rebound, when he maintains such strong links with Toyota.» Still, Toyota (as well as Honda), is not just interested in cars, and is scanning the market of light six-seat professional aircraft operating as air-taxis and costing $2 million. «The air transport market is expected to be fragmented, with car industries entering it too,» is Seferis’s forecast. Airbus-Boeing What do the two aircraft industries have in common? «That each one maintains its active political role in its own way,» answers Seferis. «From very early on Condit, with his unerring strategic instinct, had penetrated the defense equipment market with the acquisition of McDonnell Douglas. Had he not done so, Boeing would have crumbled after 9/11,» he adds. Today half of Boeing’s revenues come from army procurements. At Airbus, its political character is more obvious but the emphasis placed on defense contracts is the same. «During an academic seminar I taught in Toulouse, a high-ranking official of EADS (the parent company of Airbus) taught its strategy to the internal security and defense market; this market with an annual budget of $60 billion internationally provides for the future of Airbus and other companies,» he says. Besides, Airbus is following Boeing’s example, focusing its production on China and India. Among its plans for the double-decker superjumbo A380, is its capacity to carry a total of 900 passengers (seating and standing) in short-haul flights, even when the aircraft has only 555 seats. The A380 is an absolutely essential aircraft for Airbus: «Without such a large aircraft and the consequences of delays and technical errors, Airbus would have missed out on a precious lesson. When a company constructs its new aircraft, it puts its own existence at stake,» argues Seferis. «Anyway, the next generation of lighter aircraft will be made of processed paper combined with composite materials, provided, of course, that the price of oil keeps rising.»