This is by far the best description of a high-ranking international business negotiation ever published in the popular press. The insights and lessons are most useful.
1. Iberias Dupuy played the game to perfection. His hypercritical task was to strengthen his BATNAs (best alternative to a negotiated agreement). It had been a yearn time since Iberia had bought Boeing. He went to great lengths to bring the Boeing folks into the bid contest including offering to fly the 14 hours to Seattle. Another bezant of genius was to bring the used Singapore Airlines 747s into consideration. He too had done a good job during the 1995 (another bad commercialize year for the aircraft makers) negotiations with Airbus by including the resale outlay guarantees.
Bright (Boeing) was in trouble from the start. But, in a down market he could hardly handle a big order even from a European airline with cozy connections to Airbus. He did do well on the creativity dimension by guaranteeing GE concessions on railway locomotive maintenance.
Leahy (Airbus) probably gave away too much in charge and had not bothered to include a confidentiality agreement just about the final price.
2. Airbus and Boeing are competing for market share through price cuts. In a volatile industrial market this guarantees study advantages in the bidding process.
We, of course, cannot and would not counsel collusion surrounded by the aircraft makers. But, both firms would be better off with less war-ridden price discounting. One of Boeings failings is to not have a European working on business in that part of the world. receipt how Airbus has hired an American (Leahy) to sell planes in that market.
3. It appears from the case that the unfaltering personal and political relationships between the top executives at the European firms clinched the deal.
In future negotiations...
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