Taking Off
McDonnell Douglas’ announcement last week of orders for nearly $11 billion worth of commercial airliners to be built by the firm’s Douglas Aircraft division in Long Beach is of significance well beyond the obvious boost to the area’s economy and a record for a single day’s aircraft order-taking. Not that the pocketbook implications can be overlooked: the addition of 5,000 jobs, boosting the work force to 45,000 at Douglas facilities in Long Beach and Torrance.
But the aircraft orders seem to assure profitable long-term production of Douglas’ new widebody passenger liner, the MD-11, which can be configured to carry from 245 to more than 400 passengers. Douglas now has firm orders and options for 253 of the MD-11 craft, the successor to the DC-10. The MD-11s are expected to cost about $110 million each. Most of the recent sales were to American Airlines, which was attracted by the early delivery dates that Douglas could promise--better than the availability of the larger Boeing 747-400--and the flexibility of the MD-11 for medium-range routes as well as transcontinental flights. The MD-11, scheduled for flight-testing this spring, will have a range of up to 8,000 miles.
As recently as 1981, with the firm down to only 12,000 employees, Douglas thought about quitting the commercial-aviation field. More recently, fiscal analysts considered the proposed MD-11 a probable failure. Douglas’ resurgence will help buffer the Southern California economy against an expected decline in defense work as the national-security budget continues to be squeezed. It also means that airline giant Boeing of Seattle will continue to have strong competition in this country for the full passenger airline market. Douglas also has a backlog of about 1,000 orders and options for the popular MD-80, for service on short-to-medium-distance flights.
The new Douglas contracts include sales and options on more than 25 MD-11s to foreign airlines, thus helping to shore up American exports and reduce projected national trade deficits. And the prospect of spirited MD-11 competition with Boeing for the long-range-aircraft business may make it possible for domestic lines to speed up retirement of older planes from the aging domestic fleet. Not a bad day’s business.
