McDonnell Is Top Defense Contractor : Pentagon Says It Regained Rank Lost in '86 to General Dynamics

Associated Press

McDonnell Douglas Corp. shoved aside two competitors last year to reclaim the title of the nation's largest defense contractor, the Pentagon said Tuesday.

Releasing its annual rating of the top 100 military contractors, the Pentagon said McDonnell Douglas had jumped past General Dynamics and General Electric to win the top ranking for fiscal 1987.

St. Louis-based McDonnell Douglas increased its Pentagon work by $1.1 billion during the year to a new total of $7.7 billion, easily surpassing General Dynamics.

McDonnell Douglas' rise to the No. 1 spot is nothing new for the giant aircraft maker. While General Dynamics was No. 1 in 1986, McDonnell Douglas was the top-ranked contractor in fiscal 1984 and fiscal 1985.

Some of the company's larger contracts include the FA-18 Hornet fighter for the Navy, the F-15 Eagle for the Air Force, the AH-64 Apache helicopter gunship for the Army and the AV-8B Harrier jump jet for the Marine Corps.

Definitive Gauge

General Dynamics, ranked No. 1 in fiscal 1986 with $8 billion in contracts, fell to No. 2 in 1987 with work valued at $7 billion. General Electric also suffered a decline in contract awards, falling to $5.8 billion in fiscal 1987 from the $6.8 billion it won in 1986, the Pentagon said.

The Defense Department report covers the fiscal year ending last Sept. 30 and is considered the most definitive gauge of how major military contractors fare each year.

The report discloses that the Pentagon's contractors were fighting over a smaller pie in fiscal 1987, with prime contracts parceled out totaling $142.5 billion. That is $3.2 billion less than the total awarded in fiscal 1986.

Moreover, the top 100 companies as a group saw their share of those contracts decline slightly last year. The 100 firms received $95.4 billion of the contracts, or 66.9% of the total, compared to $98.6 billion and 67.7% in fiscal 1986.

According to the rankings, only one company in the fiscal 1986 top 10 failed to stay in that number last year. Rockwell International, which is winding down its work on the new B-1B bomber, fell from fourth place on the 1986 list to 12th place in fiscal 1987 with contracts worth $2.2 billion.

Lockheed Improves

Rockwell's spot in the top 10 was claimed by Martin Marietta, which moved to seventh place from 11th in the rankings with work totaling $3.7 billion.

The other top 10 rankings involved the same companies as in 1986 but in a different order.

The fourth-largest defense contractor in 1987 was Lockheed, which won contracts totaling $5.6 billion. It improved from sixth place the year before, when its military business totaled $4.9 billion.

Ranked fifth was General Motors with $4.1 billion. That was a decline from the $5.1 billion in work won by GM in 1986 but still enough to keep it at the same spot in the rankings.

Rounding out the top 10 were Raytheon, with $3.8 billion in contracts; Martin Marietta, with $3.7 billion; United Technologies, with $3.6 billion; Boeing, with $3.5 billion, and Grumman, with $3.4 billion.

"The smallest total amount received by a company in the fiscal 1987 list was $122 million, compared to $149 million in fiscal 1986," the Pentagon said.


List is based on total contracts awarded during the federal government's fiscal year ended Sept. 30, 1987:

Company $ in billions McDonnell Douglas $7.7 General Dynamics 7.0 General Electric 5.8 Lockheed 5.6 General Motors 4.1 Raytheon 3.8 Martin Marietta 3.7 United Technologies 3.6 Boeing 3.5 Grumman 3.4 Unisys 2.3 Rockwell International 2.2 Tenneco. 2.1 Honeywell 2.0 Litton Industries 2.0 IBM 1.8 Westinghouse Electric 1.7 GTE 1.5 Textron 1.5 LTV 1.3 Northrop 1.1 Texas Instruments 1.1 TRW 1.1 ITT 1.0 Allied-Signal 0.9

Source: Associated Press

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