Airbus: Birth Of A Giant

On a rainy Paris afternoon last spring, General Electric Co. CEO John F. Welch walked into an unmarked building facing the Arc de Triomphe to pay a discreet call on his old friend and fellow corporate titan, Jean-Luc Lagardere. Welch was looking for very important information. Lagardere--at 72, the grand old man of French aerospace and publishing--was aiming to do two things so daring and unexpected that few believed either would be possible. One was a planned merger of the largest aerospace and defense groups in France, Germany, and Spain to make Europe's first global giant in the sector. The new company--potentially the biggest cross-border industrial tie-up in European history--would not only be a world leader in helicopters, missiles, and satellites but would also control the huge Airbus Industrie aircraft consortium. Would the merger work, Welch wondered.

The other bold project Welch wanted to know about concerned Airbus itself. Would it follow through on audacious plans to manufacture a 600-seat to 800-seat "superjumbo" plane--the largest commercial airplane ever imagined? Welch, who sells over $10 billion in jet engines every year, picked up a little plastic model of the plane, the A3XX, on Lagardere's desk. "Jean-Luc," Welch asked, "is this thing going to get built?" Lagardere, sitting behind an ornate desk, didn't hesitate. "We are going to do it, Jack," he told Welch. "We are not going to be a niche player in airplanes. We are going to be a full global player."