Newspaper article St Louis Post-Dispatch (MO)

Mac Joins the Boeing Team Engineers to Do Design Work on 747s

Newspaper article St Louis Post-Dispatch (MO)

Mac Joins the Boeing Team Engineers to Do Design Work on 747s

Article excerpt

In a deal that could herald a historic realignment of the commercial aircraft business, McDonnell Douglas Corp. has agreed to help Boeing Co. make jets.

The collaboration will start in January, when McDonnell sends several hundred engineers to Boeing's base in Seattle for design work on two new versions of the 747 jumbo jet. It could end with McDonnell assembling Boeing airliners at its Douglas Aircraft Co. unit in Long Beach, Calif.

"We truly believe that it is a win-win situation," said Mike Sears, president of Douglas. Boeing has booked a record amount of business this year, landing orders for 618 jets worth $45.5 billion. Its factories in the Pacific Northwest are running full tilt, and customers around the world are clamoring for the company to come up with larger, longer-range versions of several popular jets. McDonnell, a distant third in the commercial aircraft market, has missed out on most big orders, even losing several longtime customers to Boeing and Airbus Industrie. McDonnell recently canceled its own jumbo jet development program, the MD-XX, after concluding that the potential returns did not justify the cost. As a result, its jetliner unit has less work for its design people - who might be tempted to jump to other aerospace companies with more promising prospects. The so-called "strategic collaboration" offers a ready solution. It allows McDonnell to keep its workers busy and lets Boeing tap into a pool of highly skilled technical workers at a time when they are scarce, Sears said. The deal also means added revenue and profits for Douglas, which has yet to become a key contributor to its parent company's strong financial performance. On the surface, the deal makes McDonnell little more than a temp service for Boeing. But industry analysts say the agreement, negotiated over the past month, makes partners of the nation's two biggest plane makers. The deal raises the possibility that McDonnell will eventually sell its commercial aircraft unit to Boeing or agree to an outright merger. "We think that as we go forward, Douglas will become, if you will, a part of the Boeing family in wide-body aircraft," said Larry Clarkson, Boeing's vice president for planning. …

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