McDonnell Douglas Joins Computer Software Field

Joining a growing number of corporations that are re-examining the “smaller is better” concept, McDonnell Douglas Corp. said Wednesday it has created an autonomous, entrepreneurial division to develop software for the personal computer market.

The division’s first product, scheduled for release early in 1986, will be a computer-aided design and manufacturing software package, a so-called CAD/CAM package, for use with IBM PCs and IBM PC-compatible personal computers.

In the past three years, more than 100 large companies around the nation have formed internal divisions or created entire new companies staffed by personnel devoted to the idea that a small group of entrepreneurially driven people can be more creative than a large and often cumbersome corporation. The entrepreneurial operations, backers believe, ultimately will enhance their sponsoring companies’ ability to compete and be profitable.

The new McDonnell Douglas division, PC Productivity Systems, is headquartered in Cypress and will operate as a unit of McDonnell Douglas Manufacturing Industry Systems Co., which in turn is part of the Irvine-based McDonnell Douglas Information System Group.

“With the new division, McDonnell Douglas is departing from its past marketing strategy of direct sales,” said George Meister, senior director and general manager of Manufacturing Industry Systems and the corporate sponsor of PC Productivity.

The entrepreneurial division’s “autonomous structure, where marketing, administration and product development, staff and facilities are independent from other McDonnell Douglas organizations, allows the new group to compete effectively in the retail market,” Meister said.

The PC Productivity Systems division actually began operations on Aug. 6, said Tom Rafferty, a longtime McDonnell Douglas software development executive who heads up the new division.

Rafferty said Wednesday that McDonnell Douglas waited nearly two months to announce formation of the division in order to ensure that it was operating smoothly and to give Rafferty time to retain outside consultants to augment his small staff.

Internal Staff of Only 10

He said that the division’s charter--all aimed at enabling PC Productivity to respond quickly to market conditions--enables it to operate without following most of the day-to-day procedures to which all other units of the giant McDonnell Douglas Corp. must adhere.

Among other things, Rafferty said, that means that PC Productivity has an internal staff of only 10 persons and contracts with suppliers outside of the McDonnell Douglas organization for most services, including marketing, advertising and public relations.

But principally, he said, being an autonomous, entrepreneurial division means that “the major product decisions stop with me.”

Rafferty said his division will concentrate, during its first year or so, on establishing “a very responsible and professional set of retail dealers, who will be supported heavily by PC Productivity Systems to market future products.”

PC Productivity’s initial product, Rafferty said, is designed to serve small engineering firms with single-user personal computer installations that need an advanced, 3-D mechanical design capability. The personal computer CAD/CAM package, he said, is a derivative of the McDonnell Douglas Unigraphics 1 CAD/CAM package for larger systems. It will be priced between $2,000 and $3,000, he said.