McDonnell Jets: Cloudy Future?

McDonnell Douglas, weakened by internal problems and tough competition, will probably quit the commercial aircraft business in the 1990s, a Georgetown University study has concluded.

The report by the National Security Studies Program at Georgetown cites as major shortcomings the long erosion in McDonnell’s position in the world jetliner market and its financial inability to develop new products.

“Somehow, despite bad luck, mediocre management, cutthroat competition and an indifferent government, Douglas Aircraft has managed to survive in the commercial transport business. It will not survive much longer,” the study said.

The report, which involved a year of research, was authored by Loren B. Thompson, the program’s deputy director.

McDonnell dismissed the report, saying, “While it provides an interesting collection of previously reported information, we do not believe it in any way supports the report’s sweeping conclusions. We disagree totally with those conclusions. As we have said many times, McDonnell Douglas intends to remain in the commercial aircraft business and we fully expect to prosper as a major worldwide supplier of commercial aircraft.”

The Georgetown report notes that company Chairman John McDonnell two months ago said the firm would get out of any business in which it is not the first- or second-ranked player. The report notes that McDonnell has slipped to third in the jetliner industry.