Founder’s Son, Grandson Are Among the Casualties in Massive Douglas Layoff

The son and grandson of aviation pioneer Donald W. Douglas have been laid off from their jobs at the Douglas Aircraft unit of McDonnell Douglas Corp. in Long Beach, casualties of a massive 7,000-employee layoff.

“It is tough to be tossed out when your name is on the door,” said James S. Douglas Jr., the 29-year-old grandson, who worked at the company for five years. “It is the McDonnell corporation now, as far as I am concerned. I am very sad that it is over.”

His father, James S. Douglas Sr., a 59-year-old engineer and supervisor who had worked at the company for 30 years, was laid off at the beginning of this month. The elder Douglas is vacationing in Mexico this week and could not be reached for comment.

The departure of the two men from the aircraft manufacturer ends the Douglas family’s involvement with the company. Donald W. Douglas Jr., another son of the founder, had long served on the McDonnell Douglas board but was asked to step down last year when he reached age 70. A third son, William E. Douglas, retired from the firm’s Astronautics unit in Huntington Beach several years ago.

Donald W. Douglas founded his aircraft company in Santa Monica in 1920, a decade after observing a demonstration by flight pioneers Wilbur and Orville Wright. Douglas’ company went on to dominate the industry until Boeing overtook it in the 1960s. In financial straits, Douglas Aircraft sold out to McDonnell in 1967. The latest departures of Douglas family members from McDonnell Douglas come amid efforts by the company, which is controlled and managed by the McDonnell family of St. Louis, to assert more control after years of losses at the largely autonomous Douglas subsidiary.

Douglas Aircraft posted a pretax loss last year of $222 million and lost another $84 million in the first three months of this year. Its major aircraft programs are behind schedule, and it is struggling to restore order after a massive management reorganization last year.

In an effort to trim expenses, the company last month began cutting 7,000 jobs at the its Long Beach and Torrance facilities, mostly among the ranks of white-collar workers. Current Douglas employment in Southern California is 40,500.

Douglas spokesman Don Hanson said Thursday that he could not discuss the layoffs of any individual employees but added that decisions were made with the goal of keeping only those workers “best able to accomplish” the work. Seniority was not a critical factor in determining who was put out.

Senior executives at the company reviewed and approved the decision to lay off the Douglases, management sources said.

Aerospace industry sources have said Donald Douglas Jr., the eldest son of the founder, is deeply unhappy about how McDonnell is handling problems at Douglas Aircraft. However, when he was asked about those reports, Douglas responded: “I don’t want to talk about it. The whole thing disturbs me too much.”

James Douglas Jr., who worked in Douglas’ commercial aircraft customer support area until he was laid off in late May, said he had sought to be a part of the company that his grandfather founded, because, “I could have done something for them. My father felt the same way. He felt that we both belonged there.”

He said his father had recently been promoted to a new job as business unit manager for offsets and countertrade, which involves barter arrangements in the foreign sales of commercial aircraft. James Douglas Sr. once worked as an engineer on the DC-8 and is a lecturer for several business school graduate programs. Both men are Huntington Beach residents.

“He is very hurt, the same as me,” James Douglas Jr. said.

Nonetheless, he does not think that the loss of his job was part of a design to rid the company of the Douglas family influence. “I don’t think there was anything on that level at all. We were just peons,” he said.

The loss of the family members parallels an effort to purge the Long Beach operation of the older corporate culture, and that has hurt morale there, he said.

“Sure there are good people at Douglas who work hard and care, but there isn’t the esprit de corps, “ Douglas said. “It isn’t a family company any more.”

At least it isn’t a Douglas family company. The McDonnell family of St. Louis continues to exercise control over the publicly traded company.

Family members and trusts own about 15% of the stock. John F. McDonnell is chairman and chief executive; James S. McDonnell III is a corporate vice president and board member; Sanford McDonnell is the former chairman and remains a board member; and Randy McDonnell, Sanford’s son, is corporate director of advanced concepts, according to a spokeswoman.

They are all descendants of James S. McDonnell, the founder of the military aircraft company, who died on Aug. 22, 1980. Donald W. Douglas died the following year.