Boeing and Mcdonnell Douglas were both major competitors during the initial ages. Both companies fought for the market share in civil aviation industry as well as for military contracts from the US governments. But after a 1.3 Billion USD share swap, only Boeing Survived.
Let us analyse the events that took place which led to this merger.
The creation of Mcdonnell Douglas company
The Mcdonnell Douglas company is the result of another merger which took place In the year 1967. Mcdonell aircraft company and Douglas Aircraft company merged to form the Mcdonell Douglas aircraft company.
Douglas aircrafts were in demand during the world war II where the company’s D-8 and D-9 becoming popular. However, the company faced difficulties when they planned for expansion of their operations. At the same time, Mcdonell company was eyeing to enter the Civil aviation industry, following an overwhelming success in the defence aircraft industry. Both the have have officially merged on April 28 1967.
The D-10’s caused a massive problem for the company’s public relations due to the crash of American Airlines flight 191 on 25 may 1961. 271 occupants perished in the crash including two people on the ground. This crash led to the company losing many potential contracts for the D-10. The years following the crash, the contracts for D-10 dropped drastically, American Airlines flight crash being the driving force behind this trend, and the company started to focus on the defence aircrafts more, since this industry was turning very promising for the company.
The company was looking forward for another merger in order to stay in the industry and avoid any potential collapse. The company has started talks with the Boeing corporation in the year 1960, but the whole ordeal didn’t come out to the public till late 1969.
Boeing company saw a drastic increase in the contracts coming in and they need some extra facilities to meet the demand. On the other hand, Mcdonell Douglas company’s contracts dropped, leaving many of the company’s facilities idol. Boeing made good use of this idol facilities following the successful merger of the two companies. Even after the merger, both the companies have to make up for $100 billion. Harry Stonecipher, who was the CEO of Mcdonnell Douglas, goes on to become the President and COO of the Boeing company. He added that the new company is gearing up to face the existing and new competition in the field of aviation and aerospace.
The Firm's entry into European market
After the initial concerns surrounding legalities has cleared, the company was ready to enter the European market. The European commission has commented that the debut of Boeing company will strengthen the aviation and aerospace industry in Europe, setting new quality and competition standards, paving the path for a bright aviation future for the European nations.
The European Union body said the following:
"The Commission considers that this strengthening arises from MDC's own competitive potential in large commercial jet aircraft, from the enhanced opportunity for Boeing to enter into long-term exclusive supply deals with airlines (already exemplified by those with American, Continental and Delta), and from the acquisition of MDC's defence and space activities, which latter confer advantages in the commercial aircraft sector through "spill-over" effects in the form of R&D benefits and technology transfer."
Completion of the Merger
By the end of summer of 1967, the merger was complete. The company was still strong when it comes to defence industry, but was significantly lagging in the civil aviation industry.
The firm supplied aircraft to the militaries to several allied nations. Countries such as the United States, the United Kingdom, Italy, Malaysia, and Japan all received planes from McDonnell Douglas. Ultimately, the deal would ramp-up Boeing's stance against rivals such as Lockheed Martin in military aviation.
Over the decades, the company has produced some of the iconic aircrafts for the USA, the Boeing company has customized its logo in order to incorporate the logo of Mcdonell Douglas in order to honour the company for its achievements in the industry and its contribution to their Nation.
The D-10 and D-3 aircrafts of the Mcdonell company can be spotted even to this day.
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