Lockheed Discusses Possible Role With McDonnell in New Jetliner
Lockheed is holding preliminary discussions with McDonnell Douglas to participate in the production of a new passenger jetliner, Lockheed Chairman Daniel M. Tellep said Monday.
Tellep said the project involves a stretched version of McDonnell’s new MD-11 wide-body jet, flown for the first time last week.
McDonnell has not yet decided to proceed with the new MD-11 variant, and Tellep declined to say what part of the aircraft structure Lockheed would build if the project goes forward. The MD-11 is an updated version of McDonnell’s DC-10, and a stretched version of the MD-11 would approach Boeing’s 747 in size.
Lockheed is seeking to diversify away from the weapons business as Pentagon spending falls, and a joint program with McDonnell could result in significant non-defense growth.
Tellep said McDonnell officials were seeking a risk-sharing arrangement with Lockheed, suggesting that Lockheed’s participation in the program would be significant.
“They wanted us to participate in a significant way,” Tellep said. “It was a reasonable percentage of the program.”
But Lockheed is “reluctant” to accept a risk-sharing investment in the program, because that would not be consistent with an effort it started last year to reduce its risk exposure, Tellep said.
Lockheed bowed out of building commercial aircraft on its own in the early 1980s after nearly going bankrupt on the L-1011 jetliner program.
So far, the talks with McDonnell are being held at a fairly low level between that firm’s Douglas Aircraft unit in Long Beach and Lockheed’s aeronautic systems company in Burbank. If a deal goes forward, the talks would eventually be consummated by both company’s headquarters, Tellep said.
In recent years, Lockheed has held talks with Airbus Industrie and Fokker Aircraft about joint production programs, but those discussions have ended, Tellep said.
Nonetheless, commercial subcontracting and aircraft maintenance are expected to be one of the fastest growing areas at Lockheed in coming years. The company expects revenue from those businesses to double this year.
