Douglas Undergoes Big Shake-Up : 9 Executives Named to Posts in Bid to Focus on Quality

In a major executive shake-up and reorganization, McDonnell Douglas Chief Executive John F. McDonnell removed any doubt Monday that he intends to reshape the firm’s Douglas Aircraft unit in Long Beach.

At a meeting of more than 5,000 managers called inside a paint hangar at Douglas, McDonnell disclosed a top-to-bottom reorganization of the commercial aircraft company, including the appointment of nine new executives to head up programs and special business areas.

The action follows closely last month’s decision by McDonnell to name Robert H. Hood the new president of Douglas, replacing James E. Worsham. McDonnell named new top management for virtually every Douglas aircraft program. (Worsham is expected to take a new job within McDonnell after his retirement as Douglas president.)

The new organization will assign to each aircraft program responsibility for manufacturing, engineering, personnel, administration, testing and a host of other functions. Historically, aircraft companies have maintained one engineering department that was drawn on by different aircraft programs.

In a formal announcement, the changes were described as part of a “streamlined organizational structural” that is supposed to assist Douglas in improving the quality of products.

Won’t Compromise Quality

McDonnell Douglas Vice President Michael Burch said the changes are also a response to the cost problems that have resulted in poor profit performance not only at Douglas but in the aircraft industry in general.

“We do need to get our costs down but at the same time not compromise quality,” Burch said. “The process of making quality takes too long and as a result the company isn’t getting a good return on its investment.

“John McDonnell said today that he would rather be known for the quality of his product than the size of his order book,” Burch added.

Douglas, led by the personal sales efforts of Worsham, has run up a commercial backlog of $61 billion of orders and options.

“Jim (Worsham) has done a fantastic job of turning around a company that was losing money every year,” Burch said. “There is absolutely no criticism of James Worsham.” In addition to the nine new vice presidents named Monday, dozens of new or restructured jobs will be filled in coming weeks. That includes the head of commercial marketing for Douglas. Of the nine vice presidents appointed to head programs, only Robert Clepper, chief of the C-17, previously headed the same program.

An organization chart provided to The Times leaves out Senior Vice President William Gross, who has been the second highest ranking executive at Douglas and is expected to be reassigned.

Some of the executives moved into new job slots at Douglas took demotions in title and in rank. McDonnell ranks executives under a system of gradation running from A through H. Some executives, such as John D. Wolfe, was at a position A and will now be at a position C. But the intent of reducing the rank and titles was to “flatten out the organizational chart,” Burch said, which means that there is less hierarchy.

“The main emphasis is to get people to be responsible for their own product area,” he said. “There will be no passing on a service or a product until the quality is right.”

The executives, who are described as “team leaders,” introduced Monday are:

- Joel D. Smith, vice president and general manager for quality. Formerly vice president for quality at corporate office.

- John D. Wolfe, vice president and general manager, MD-80. Formerly executive vice president for operations at McDonnell Aircraft.

- Jack N. Hayden, vice president and deputy general manager for the MD-80. Formerly director for MD-80 production.

- Louis F. Harrington, vice president and general manager for MD-11. Formerly vice president and general manager for McDonnell Douglas Space Systems in Huntington Beach.

- Robert L. Clepper, vice president and general manager, C-17.

- Thomas M. Ryan, vice president and general manager for T-45 and training systems. Formerly senior vice president for government products at Douglas Aircraft.

- David O. Swain, vice president and general manager for strategic business and technology development. Formerly vice president for strategic business development at McDonnell Douglas Missile Systems in St. Louis.

- Joe B. Pirkle, vice president and general manager for product center operations. Formerly vice president, internal operations at McDonnell Douglas Missile Systems in St. Louis.

- Richard M. Randall, vice president and general manager for support and plans integration. Formerly senior vice president for finance and resource development at Douglas.