Would Accept Saudi Crude Oil for Airliners, McDonnell Says

McDonnell Douglas Corp., anxious to secure part of Saudi Arabia’s anticipated multibillion-dollar purchase of passenger jets, is offering to accept crude oil rather than cash for payment on McDonnell planes, a senior company executive said Friday.

Robert H. Hood Jr., president of the company’s Douglas Aircraft Co. subsidiary, which builds commercial jets in Long Beach, said the barter offer is among several financing alternatives in McDonnell’s proposal to the Saudis.

“It’s a very important deal, and we didn’t want to leave any stone unturned,” Hood told reporters after disclosing the offer in a speech to the Rotary Club of Los Angeles. He said McDonnell would then convert the oil to cash.

Saudi Arabia last month agreed--after President Clinton personally intervened--to buy planes from McDonnell and Boeing Co. as part of its purchase.

The Saudis have yet to formally announce how many and which planes they will buy, but they are expected to purchase between 60 and 80 jets valued at roughly $6 billion. It is a particularly crucial sale for Douglas, which has struggled to drum up new orders in recent years.

In the meantime, the U.S. Export-Import Bank has agreed to provide up to $4.8 billion and $6.2 billion in loan guarantees for Saudi jet purchases from McDonnell and Boeing, respectively.