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WILL AIRBUS BUY DOUGLAS?
by Wolfdietrich HovelerThe beginning of the end or a new beginning? Harry Stonecipher, Chairman and CEO of McDonnell Douglas (MDC), has released a wave of speculations with the board's decision of October 25 to terminate the MD-XX project.
One fact is clear: With this decision, the switch is thrown for McDonnell Douglas' exit as a broad system leader from the airline business. Stonecipher: "I don't see MDC any more as a sole partner for airlines." According to him, MDC will concentrate on the market niches: MD-95, MD-90, modernization of the DC-10 and continuation of the MD-11.
In spite of this toning down Douglas Aircraft might be up for sale. The Clinton administration favors a fusioning of MDC with Boeing which would further strengthen the international position of the market leader. There is also some interest in Douglas coming from Asia.
Still, there are other opportunities. Since the French politics adapt the industrial capacities of its government owned aerospace industry to its financial capabilities, without consideration for its partners, especially the British and German aerospace industry are putting out their feelers to the USA.
McDonnell Douglas' airliner division will not be able to survive on its own and Airbus Industrie is looking for a partner for the development of a Super Jumbo as the direct competitor to the Boeing 747's monopoly. Are Stonecipher and the MDC board making a sign for negotiations by terminating their own project? In Farnborough, the MDC head had strictly refused a cooperation with Airbus. Stonecipher is known for his disfavor of cooperation in the European sense. Fusion or purchase have been his options so far. Is the sale of MDC to raise additional capital for a reorientation of the company into electronics?
Still, the European objectives are not clear either. The idea of having a second standing leg in California looks tempting to some Airbus partners. However, the realization would be difficult. First, more than 2000 Douglas aircraft worldwide would need to be supported or disposed of over years, which, from many companies points of view, is a big burden on Airbus Industrie. Second, the product families of the two manufacturers don't match, which also applies to a Boeing/Douglas merger. The product scale would need to be thinned out. France and Germany would have no interest in the jets from Long Beach as long as the A319/320/321 family is final assembled in Hamburg and Toulouse.
There is another variant, that has only indirectly to do with McDonnell Douglas. Lockheed Martin has announced interest in a joint development of a new military transport aircraft in the category of the Future Large Aircraft. Large markets could be opened together, such opening a so far unknown room for investments in the civil aircraft manufacture. This could even be the first step for a cooperation to realize the A3XX project.
The story remains exciting. Still, who believes they still have time is wrong. The European industry and the governments in London, Paris, and Bonn are under time pressure.
From page 4 of FLUG REVUE 12/96
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Last updated November 19, 1996