McDonnell Douglas/Boeing Merger
- Thread starter Zipper730
- Start date
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FLYBOYJ
"THE GREAT GAZOO"
It was a matter of one corporation buying out another by taking control of it's stock. When Boeing took over McDonnel Douglas, it was not well received by the MD rank and file, especially at Long Beach.
Over the years there were many mergers and rumors of mergers. Lockheed bought the aircraft division of General Dynamics and eventually merged with Martin. North American, swallowed by Rockwell and then eventually Boeing, Northrop and Grumman while swallowing Ryan.
Everything here around Boeing in St. Louis where I work still shows signs of McDonnell Douglas. The road that leads to the plant is called James S. McDonnell Blvd. Just down the road is Phantom Blvd. I have co-workers who were McDonnell Douglas employees, and have been with Boeing since the merger.
special ed
2nd Lieutenant
- 5,827
- May 13, 2018
The first jet plane I saw was an FH-1 in flight from the McDonnell factory. The year was 1949, we lived in a subdivision near Ferguson Missouri. At 8 years old, I thought it was on fire due to the smoky exhaust. Apparently a McDonnell trade mark.
Good Old Ferguson. When I leave the Boeing facility I turn right onto the interstate right before Ferguson. Good brewery there now.
Back around the late nineties or early 2000s, I saw a chart in Aviation Week and Space Technology magazine that showed over the previous 20-30 years, how the defence industry in the US went from about 50 companies to the 5 or 6 we see today. It started with about 50 companies on the left side of the chart and showed how they merged/were bought by other companies. It was quite interesting when I saw it.
We (MD St Louis) had no warning of what was about to happen, it was just sprung on us over a weekend. Not long before, we'd lost the 1st-round JAST/JSF downselect, and I remember thinking that it was the end of McDonnell Douglas. I was right. When I heard the announcement, all I felt was an intense feeling of relief, because now I had a fighting chance of still having a pension when I retired. I'd lost that confidence through a series of management-directed catastrophes on major programs (which is a whole other subject) and so news of the merger left me happy, not knowing at that time just how screwed up Boeing was as well. On the first workday after the announcement our boss gathered our group together and showed us a 2-page outline of things that managers were being told to emphasize to employees, mainly focusing on "it's not YOUR fault." They needn't have bothered, we knew whose fault it was. They also had some sort of psychological counseling available for anyone who needed it. I don't think anybody took advantage of it, I know nobody in my group did, or anyone else I knew across the company. That's how things went down in St Louis anyway.
The original question was "why McDonnell Douglas ended up going under" and if anyone's interested I can go into specifics about exactly why we lost JAST and other things, but basically there were no other tactical fighter/attack types of things anywhere on the horizon, and MDC's commercial business wasn't enough to sustain the whole corporation, so there was no choice except to find a buyer, and Boeing had the resources to close the deal.
The original question was "why McDonnell Douglas ended up going under" and if anyone's interested I can go into specifics about exactly why we lost JAST and other things, but basically there were no other tactical fighter/attack types of things anywhere on the horizon, and MDC's commercial business wasn't enough to sustain the whole corporation, so there was no choice except to find a buyer, and Boeing had the resources to close the deal.
- Thread starter
- #8
No, I get how a merger works: What I was curious about was why the company needed a merger to begin with? I was also curious why the proposed merger with Northrop failed.
I'm not really all that knowledgeable on the JSF program, other than Lockheed won.
Yes, I actually would like to know that.
FLYBOYJ
"THE GREAT GAZOO"
I don't think the company "needed" to merge but at the tie lost some big military contracts and was struggling in the commercial market. If you're traded publicly and your stock is bought up by a rival entity, you have no choice.
Never heard why? Lack of investors or capital to buy up stock?
swampyankee
Chief Master Sergeant
- 4,036
- Jun 25, 2013
One of the problems with business schools is that they spend far too little time on anything that may be considered "failure," completely ignoring the simple fact that determining why something fails is one of the things one needs to do so that something else doesn't fail for the same reason. McDonnell Douglas had the MD-90 program and MD-11 programs basically fail (one rather unpleasant picture was of an MD-90 which broke its back on landing after a test flight. Regardless of why, that was a bad look). Neither program made money, and those banks wanted their loans repaid.
Commercial aircraft production is risky, as government programs are pretty much guaranteed to be profitable, but non-government customers are fickle, demanding, and more subject to the whims of banks, exchange rates, and markets.
