Today, Boeing is an aviation giant with almost no competition. Yet before their 1997 merger, Boeing’s main competitor was the famed McDonnell Douglas, with the two companies often embroiled in a game of cat and mouse to produce the best aircraft possible.
Indeed, even after their merger, Boeing had so much respect for the aircraft their former rivals built, that many of the pre-merger aircraft – both civil and military alike – kept their McDonnel Douglas designations, only with newer variants holding Boeing ones.
Pre-McDonnell Douglas: Douglas Aircraft
Having been interested in aviation since he was a teenager, Don Douglas chose to pursue a career in aviation, eventually becoming the chief engineer at the Glenn L. Martin Company.
Though he was doing what he loved, Douglas wasn’t satisfied and yearned to have his own company. Partnering with financier David Davis, Don Douglas resigned from the Glenn L. Martin Company and incorporated the Davis-Douglas Company.
Sadly, the company was a failure and Davis left the partnership in 1921. Having money left over, Don Douglas founded the Douglas Aircraft Company on July 22 that year as a sort of successor company to the Davis-Douglas Company.
Quickly becoming a major supplier of bombers to the US Navy, Douglas Aircraft soon expanded to producing reconnaissance and airmail aircraft too.
In 1933, Douglas entered the airliner business with their DC-1 design, followed closely by the DC-2 in 1934 and the DC-3 in 1935.
During WWII, the company expanded greatly, producing the famed C-47 Skytrain (also known as the Dakota) transport aircraft derived from the DC-3, the A-20 Havoc bomber, A-26 Invader and the SBD Dauntless dive bomber.
Though the initial postwar years were terrible for the company, who were forced to lay off large swathes of their workforce, Douglas soon recovered and the company expanded into the missile, ejection seat and rocket industries.
Still focusing on aircraft production, Douglas was quick to enter the jet age, unveiling the F3D Skyknight in 1948 followed quickly by the F4D Skyray in 1951 and the F5D Skylancer in 1956.
Douglas was also one of the first companies to enter the commercial jet age, unveiling their DC-8 design in 1958 to rival the Boeing 707. This was followed by the shorter-range DC-9 in 1965, both of which became quite popular.
Pre-McDonnell Douglas: McDonnell Aircraft
In 1928, James S. McDonnell, an engineer at the Glenn L. Martin Company resigned his position alongside two of his colleagues and established J. S. McDonnell & Associates, which built the Doodle Bug for an airplane contest with a $100,000 prize.
Though a great design, the Doodle Bug ultimately lost to the Curtiss Tanager. Beyond losing out on the prize that would’ve set his company up for life, the onset of the Great Depression in 1929 essentially reduced commercial orders to zero.
Having no money coming in, and no prospect of it, James McDonnell had no other option than to dissolve his company and go back to working for Glenn Martin. Yet, his entrepreneurial spirit never waned.
Waiting until the economy had recovered, McDonnell again resigned from the Glenn L. Martin Company in 1938 and established McDonnell Aircraft in 1939 and soon became a major supplier of jet powered fighters to Air Force and Navy.
Producing carrier-based fighters like the F2H Banshee and F3H Demon for the Navy and the F-101 Voodoo for the Air Force, all three fighters sold incredibly well, becoming popular with both the US military and foreign militaries alike!
Though a giant by all accounts, McDonnell Aircraft didn’t become a household name until the Vietnam War, when the F-4 Phantom II gained a near-cult status, becoming not only the first multi-service fighter, but also the first multi-role fighter.
Despite this, the F-4’s overall effectiveness during the war was questionable to say the least, with it being estimated that only 20% of all missiles deployed from the F-4 found their target (compared to the nearly 50% for its competitors).
Formation
Although the 1960’s were a time of great expansion for the aviation industry, Douglas was seemingly unable to keep up.
Overwhelmed by orders for its DC-8 and DC-9 airliners as well as its A-4 Skyhawk light attack aircraft, Douglas was also suffering protracted development costs for its all-new DC-10 trijet airliner due to shortages arising from the Vietnam War.
Unable to increase their revenue and having costs rising, Douglas was soon in a tight financial position. Seeing their opportunity to expand into the commercial aviation sector, McDonnell entered talks to acquire the struggling Douglas in 1963.
After four long years of negotiations (partly due to Don Douglas refusing to sell his company) McDonnell Aircraft finally acquired Douglas Aircraft on April 28 1967, merging together to form McDonnell Douglas.
By most accounts, Douglas was less than a year away from bankruptcy. But with McDonnell’s acquisition of them, they were able to provide the capital Douglas desperately needed to expand their production and fix the development issues with the DC-10.
As McDonnell Aircraft had been the one to buy out Douglas (and not the other way around), the new company was led by James McDonnell and his right-hand, David S. Lewis, whilst Don Douglas was the company’s ceremonial chairman.
For the same reasons, the new company’s headquarters and main factory remained at McDonnell’s Lambert-St. Louis International Airport in Berkeley, Missouri.
Early Years
Enter The DC-10
Helicopter Business
Following the failure of his X-1 Racer, XF-11 reconnaissance aircraft and H-4 Hercules cargo aircraft, aviation pioneer Howard Hughes redirected the company’s focus from produced fixed-wing aircraft to helicopters.
Initially a division of Hughes Aircraft, Hughes Helicopters later became a subsidiary of Hughes Tool Company following a corporate reshuffle by Hughes in 1955. The company later became one of the many subsidiaries of Hughes’s Summa Corporation.
Yet following Hughes’s death in 1976, the Summa Corporation began to sell many of its subsidiaries so it could focus on becoming a real estate developer. This included Hughes Helicopters.
Interested in the prospect of adding a range a civil and military helicopters to its existing business, McDonnell Douglas entered talks with Summa to acquire the company in 1984, eventually settling on a figure of $470 million.
Under McDonnell Douglas ownership, Hughes Helicopters was renamed MD Helicopter Systems and continued production of its famed TH-55 Osage/Hughes 269, OH-6 Cayuse and Hughes 500 designs.
Wanting to keep MD Helicopter Systems in line with its other subsidiaries, newer variants of Hughes’s existing helicopters were given MD designations, as were those helicopters/variants then in production.
Pre-existing models/variants, however, kept their Hughes designation.
For example, the Hughes 500 family was renamed as the MD 500 family. Newer variants of the family such as the MD 520 and MD 530 no longer had Hughes designations, as did the all-new MD 600 and MD 900 (otherwise known as the MD Explorer).
MD Helicopters also continued development of the AH-64 Apache, originally developed by Hughes. With McDonnell Douglas’s money and relationships behind it, the Apache later saw great success in both US and foreign service.
Boeing Merger
By the mid 1990’s, McDonnell Douglas’s competitive edge had become to decline.
The rise of Airbus in Europe had supplanted McDonnell Douglas as the world’s second largest commercial aircraft manufacturer and the company showed no intentions of unveiling any new aircraft since no one was interested in the double-deck MD-12.
However, the company’s main competitor, Boeing, didn’t have this issue with the Boeing 777 (then being developed by the company) regularly getting new orders from major airlines.
Flush with cash, Boeing acquired the aerospace and defense divisions of Rockwell International in December 1996 for a reported $3.2 billion a reported $3.2 billion. Later renamed Boeing North American Inc., Boeing later integrated it into Boeing Defense Space & Security (BDS).
Interestingly, Boeing North American Inc. included the remnants of the iconic, yet long-since-defunct North American Aviation that became famous for producing the P-51 Mustang during WWII.
Wanting to keep this momentum, Boeing announced that they’d be merging with their longtime rival McDonnell Douglas, only a few days after completing the Rockwell deal.
Despite the longstanding rivalry between the two companies, McDonnell Douglas CEO Harry Stonecipher was actually quite receptive to the Boeing takeover and helped negotiate a $13 billion stock swap that saw Boeing come out as the surviving company.
Negotiated within a matter of months, the deal was held up by regulatory objections from the European Commission who placed three conditions on the merger:
The first was that the new company would terminate exclusivity agreements with three US airlines, separate accounts would be maintained for the McDonnell Douglas aircraft business and certain patents would be made available to their competitors.
Though these conditions were designed to benefit Airbus and hopefully weaken the new company’s competitive advantage in both Europe and the US, both Boeing and McDonnell Douglas agreed and the deal was finalized on August 4 1997.
With this, McDonnell Douglas as an independent entity ceased to exist and the company’s various divisions were absorbed into their Boeing counterparts, or were created as separate entities within the Boeing group itself (eg. the helicopter business).
Construction of existing McDonnell Douglas aircraft continued under their MD designations, whilst newer variants of the aircraft, or new aircraft all together, had the words “McDonnell Douglas” replaced by “Boeing”.
Legacy
Do you remember McDonnell Douglas? Which was their best aircraft? Tell me in the comments!
Featured image courtesy of Andrew E. Cohen via Flickr.