Aircraft rivals to collaborate on jet McDonnell Douglas, Boeing will develop wide-bodied planes

December 04, 1996|By SEATTLE TIMES

SEATTLE -- Boeing Co. and McDonnell Douglas Corp. have agreed to collaborate on the development of Boeing wide-body passenger jets, in a far-reaching deal that could reshape the commercial aircraft industry.

In a joint statement, the two aerospace rivals said yesterday that the first project would involve sending several hundred Douglas engineers from Long Beach, Calif., to the Seattle area to work on two so-called stretch versions of the 747 jumbo jet.

Boeing officials said the strategic collaboration would allow the company to take full advantage of McDonnell Douglas' broad range of design, production and systems capabilities.

They said it was not the first step toward a merger of the two largest U.S. aircraft companies, which compete with Europe's Airbus Industrie.

"We have a record number of orders for commercial jets and several ongoing development programs," said Ron Woodard, president of Boeing Commercial Airplane Group.

"McDonnell Douglas has excellent design and production capability -- both in people and facilities -- that are not being fully utilized."

The announcement comes as Boeing faces a growing backlog in commercial aircraft and McDonnell Douglas is struggling to keep its skilled work force employed.

The agreement, which is expected to be final next month, is a boost for McDonnell Douglas. Its commercial-aircraft division, in Long Beach, has largely missed out on this year's record number of orders.

Boeing has orders this year for 618 aircraft valued at $46 billion.

McDonnell Douglas also has suffered recent setbacks in military aircraft programs.

But the rush of orders and the development of a larger 747 jumbo jet have pushed Boeing's factory capacity to the maximum. Sharing the load on wide-body development is expected to ease that capacity, officials say.

The partnership initially involves McDonnell Douglas engineers, but the agreement likely will mean eventually using Douglas production factories, officials said.

"It allows us to make use of skills that we have and capacity that we have for taking on work," said Tom Downey, a Douglas Aircraft spokesman.

The union representing Boeing workers reacted warily.

"We're always concerned here if it would affect our bargaining unit," said Bill Johnson, president of Machinists Local 751, which represents more than 30,000 Boeing production workers.

Pub Date: 12/04/96

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