BOEING-McDONNELL DOUGLAS TALKS : Changing Aerospace’s Landscape?
The talks between Boeing Co. and McDonnell Douglas Corp. could lead to a variety of scenarios under which assets would be exchanged or shared. Here are a few:
1. Full Merger
* Combines nation’s two biggest aircraft makers.
* New entity builds commercial jets, military fighters, helicopters, missiles.
* Company’s annual sales top $35 billion.
* Company rivals General Motors Corp. as top U.S. exporter.
* Seen as least likely scenario, partly because of antitrust obstacles.
2. Boeing Buys Only McDonnell’s Commercial Operation
* Leaves United States with one commercial jetliner builder.
* Presents a unified U.S. attack against Europe’s Airbus Industrie.
* Reduces need for joint ventures with Asian entities.
* McDonnell’s commercial plant in Long Beach faces changes.
3. Boeing Buys McDonnell, but Spins Off McDonnell’s Commercial Operation
* Meets antitrust objections to having only one U.S. jetliner builder.
* Boeing doesn’t need to finance McDonnell’s struggling Long Beach operation.
* Defense work further diversifies Boeing’s giant commercial business.
* Deal likely would be supported by Defense Department.
* Pressures rival defense contractors, such as Northrop Grumman Corp., to seek further consolidation.
4. Companies Merge Space Operations
* Combines their current work on NASA’s space station.
* Merged entity also builds missiles, Delta rocket launchers now made by McDonnell in Huntington Beach.
* Joins forces to develop new, reusable launch vehicle for space.
5. Other Possibilities
* Joint venture to develop a 500-seat “super jumbo jet.”
* Military helicopter programs merged.
* Marketing / production programs expanded in Asia, notably China.
* Boeing helps McDonnell produce fighter jets, other military planes.
1994 commercial jetliner market share:
Airbus Industrie: 35.3%
McDonnell Douglas: 9.6%
Top defense firms worldwide based on 1994 defense revenue, in billions:
Lockheed Martin Corp.: $14.4
McDonnell Douglas Corp.: $9.2
British Aerospace: $7.3
Hughes Electronics Corp.: $6.3
Northrop Grumman Corp.: $5.4
Loral Corp.: $5.2
Boeing Co.: $4.8
General Electric Co.: $4.3
United Technologies Corp.: $3.8
Sources: Defense News, Aerospace Industries Assn.