Airbus and European Capitalism, Part II

A few days ago, I linked to a discussion over at washingtonpost.com, on European vs. US capitalism. The discussion was hosted by Steve Pearlstein, who had just written about the problems facing Airbus.

Businessweek has also just published an article on Airbus which illustrates the problem with incessant meddling by politicians from several countries:

... Constant political meddling, it seems, is the price Airbus must pay for billions of dollars in low-interest government loans that have helped fuel its growth. Politicians lean on the company to spread work across its 16 European factories, sapping efficiency and increasing the risk of production glitches. "The fairy tale has turned into a nightmare that even the fiercest Euro-skeptics wouldn't have imagined possible," according to Eric Chaney, Morgan Stanley's chief European economist.

The $16 billion A380 project was a victim of that nightmare. The plane's mismatched wiring was produced by Airbus' Finkenwerder factory, a vast complex near the port of Hamburg that employs more than 10,000 people. In many respects, Finkenwerder would be the most logical site for the A380's final assembly line. Thanks to the plant's waterfront location, the plane's wings and fuselage -- too big for conventional land and air transport -- could have been delivered by ship directly to the factory door. Instead, political horse-trading led Airbus to put the assembly line in landlocked Toulouse, where the huge components have to be shipped on custom-built river barges and flatbed trucks. More than 100 miles of highway had to be widened and straightened so the trucks could get through.