It’s Official: McDonnell to Start MD-11 Program : Company Says It Has Received Orders From 12 Customers for a Total of 52 of the New Jetliners
McDonnell Douglas directors Monday officially launched the long-stalled program to build the proposed MD-11 wide-body jetliner--a program that will translate into thousands of new jobs in Southern California during the next few years.
“We have been authorized to proceed,” McDonnell Douglas spokesman Jack Cooke said after a special board meeting at the company’s St. Louis headquarters. “They start work immediately.” The first of the MD-11s will be delivered in 1990.
McDonnell Douglas also said it has received orders from 12 customers for a total of 52 MD-11s, a larger version of the veteran DC-10 airliner. The new plane, like its forerunner, will be produced by the company’s Douglas Aircraft subsidiary in Long Beach. The 12 customers have also taken options on another 40 MD-11 aircraft, the company said.
The total includes a $1.5-billion order announced Monday by Alitalia, Italy’s state-controlled airline, for six MD-11s, 10 of McDonnell Douglas’ smaller MD-82 aircraft and options for four more MD-11s.
However, the total of 52 orders is considerably more than have been announced publicly.
So far, in addition to the Alitalia order, firm orders for 26 of the aircraft have been announced: 12 have been ordered by Scandinavian Airlines System, nine by British Caledonian Airways and five by Japan’s Mitsui conglomerate, which plans to lease them out. Also, Swissair’s board has reserved six MD-11s but has not made a firm commitment to buy the aircraft.
Federal Express is reported to have ordered two MD-11s and taken options on two others. If this order is confirmed, Federal Express would be the only domestic customer so far for the aircraft. Cooke said McDonnell Douglas continues to negotiate with a number of domestic airlines for possible sales of the MD-11.
McDonnell Douglas officials had said earlier that 20 firm orders--including one from a major U.S. customer--would be needed to launch the MD-11 program. Further details of the decision to proceed with production of the airliner are expected to be disclosed today at a news conference the company will hold in Long Beach.
“That’s impressive--52,” said analyst Howard A. Rubel of the Cyrus J. Lawrence investment firm Monday. “Those are big numbers. . . . Fifty-two goes a long way toward making (McDonnell Douglas) a leader” in its competition with Boeing Co. and Airbus Industrie, the two other major commercial jet airliner manufacturers in the Western world.
The MD-11 is a stretched version of the DC-10, with new engines, redesigned wings, an updated cockpit and more room for passengers and cargo.
The $500-million program will create 6,000 new jobs in Long Beach and at another company facility in Torrance by 1991, Douglas officials have said. Employment also will be increased at the company’s subcontractors and suppliers throughout Southern California.
The MD-11 program, which was delayed a year because of the slow pace with which orders initially were received, is “incredibly important” to McDonnell Douglas’ future, Rubel said. “It keeps them in the commercial jetliner business in the future,” he said. “It demonstrates they are a viable and strong company.”
Some of McDonnell Douglas’ subcontractors are lending money to the company to support the program, “so it is a bit of a financial risk” for all parties involved, Rubel said. But, he added, “My feeling is that they’re halfway toward break-even, which is not a bad place to be.”
Job for Rohr
San Diego-based Rohr Industries, which supplies parts to most U.S. airplane manufacturers, will produce the engine nacelles and pylons for the new MD-11s.
“Our primary contract is with McDonnell Douglas for the common strut, or pylon, that joins the engines to the wing and tail,” Rohr spokesman Jerry Broening said Monday. “And because of our contracts with General Electric and Pratt & Whitney, we’ll also be supplying engine nacelles.”
Airlines that buy the MD-11s will choose the engine manufacturer, according to Broening.
Rohr officials said Monday that they could not yet estimate how many jobs will be created or the revenue that Rohr will generate because of McDonnell Douglas’ decision to produce the MD-11.
Times staff writer Greg Johnson in San Diego contributed to this story.
