Tg 747-300
Topic Author
Posts: 1282
Joined: Fri Nov 26, 1999 6:08 am

Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 3:19 am

This has probably been discused numbers of times before, but anyway I ask once more.

Why did MDD mergered with Boeing (or was it Boeing that bought MDD?) Personaly i think it was a TRAGEDY.
The sky would have been lot more interesting if MDD still had been there producing all their nice rear engined narrowboddies and big tri-jets.
Aircrafts like the MD80/90 and the MD11 are not produced anymore because they competed directly to some of Boeing's and so on.
It's realy sad because MDD made some of the nicest a/c I can imagine.

So why did the merger took place?

tg 747-300
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CPDC10-30
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 3:26 am

Why did it take place? Boeing was looking to diversify and go big time into the military market (where MD was extermely strong) and reduce competition for their commercial airplanes. They ended up overpaying for MD and had to lay off a lot of employees, but they are a lot stronger today with the acquisition.

MD couldn't have made it much longer on its own...as sad as it may be.
 
watewate
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 4:06 am

Keep in mind that the aerospace industry is not just about commercial airliners. As CPDC10-30 said earlier, Boeing is trying to diversify itself and this is evident not only through the MDD merger, but its intention to move its HQ out of Washington state. Boeing's counterpart in Europe will have to follow sooner or later.
 
GOT
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 4:14 am

The merger with MDD was a great way for Boeing to grow, especially in the military market. And one competitor less - that's just a bonus. I think the merger was bad, competition is needed, but MDD wasn't so big in commercial aviation and it would have been even smaller today.

GOT
Just like birdwatching - without having to be so damned quiet!
 
VirginA340
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 6:37 am

I think that MD would make it as a narrow bodied air craft producer. They did great with the MD-80/90 but fowled up with the DC-10-40 and the MD-11. But the DC-10-30 was a great aircraft. It's too bad that they did not focus on supersonic aircraft rather than strecting the MD-11 and calling it the MD-12.
"FUIMUS"
 
ScottB
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 10:03 am

The U.S. government was encouraging consolidation in the defense industry as the Cold War ended and there was pressure to rationalize U.S. military spending in the wake of large budget deficits (i.e. the "peace dividend"). Lockheed and Martin-Marietta's merger to form Lockheed Martin is another example.

The battle between McDonnell-Douglas and Lockheed over the medium-size widebody market (DC-10 and L-1011) was devastating for both - it forced Lockheed out of the commercial aircraft market and was crippling to MDD. Airbus's entry into the market with the A300 and Boeing's 767 (with its advantage of type commonality with the narrow-body 757) further fragmented the 200-300 seat widebody market; it was difficult for all with a 4-way battle among the players.

The MD-80 was a good attempt to squeeze additional life out of the 1960's DC-9 airframe design, but intense competition with Boeing's 737 family (and later Airbus's A320) meant that there wasn't a lot of profit to be made - even as MDD sold hundreds each to Delta, American, Continental, TWA, etc.

When MDD was designing the MD-11, cash was short, and they really didn't have the financial resources to design anything more innovative than a DC-10 derivative. Unfortunately, the MD-11 airliner did not initially meet the performance goals that had been promised; moreover, MDD's financial condition likely made some airlines wary of committing to the program. There were questions even during the 1980's about whether McDonnell-Douglas could be a viable competitor in the jet airliner market, given an extremely strong Boeing and a European competitor whose owner-governments were willing to subsidize indefinitely.

The merger was supported by the U.S. government because it fit with their goal of consolidation among defense contractors, as well as preserving at least some of the jobs in MDD's commercial aircraft division in Long Beach - since it looked increasingly likely that MDD would exit the commercial aircraft market. And, for what it's worth, if you want someone to blame for the end of MDD, you can place the blame squarely on the shoulders of those who subsidized Airbus.
 
baec777
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 10:47 am

Boeing bought MDC. There was a MD-95 jet, so there wasn't any Boeing 717s yet, skipped from 707 to 727, so Boeing built a Boeing 717.

Prove me if Im wrong...  Smile/happy/getting dizzy


Baec777  Wink/being sarcastic

 
United Airline
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 12:16 pm

At least, Boeing now have one competitor gone.
 
SIN_SQ
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 2:54 pm

Baec777,

B717 was originally assigned to KC 135, a version of B707 or B720 for military use.

Boeing dropped B717 and named it as KC 135. Then with new generation of MD 90 series, Boeing renamed one of plane MD 90 series to B717 after McDonnell Douglas merged with Boeing.

 Smile

 
CPDC10-30
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 2:59 pm

The 717 was formerly known as the MD-95.
 
aerosol
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RE: Why Did Boeing And MDD Merger?

Wed Apr 25, 2001 4:37 pm

reasons for merger:

1.government support (reason mentioned by others)

2. Boeing wanted to diversify. The civil aviation aviation market is highly cyclical. Boeing had the intention to enlarge its military business to make the companies performance more stable.

3. MDD was comparably cheap. It got kicked out of the final round of the joint strike fighter competition. Further, the companny's new strategy to focus on planes with approximately 100 seats (after the MDD lost more and more of its market share to Airbus and Boeing) failed. MDD´s launch customer for the MD-95 suffered financial problems because it had major plane accident. Another big customer for the MD-95, SAS, decided to take the 737 instead, because Boeing made them a very good price. The economical situation for MDD was not that good so Boeing had a very good position in the negociations.





 
Tg 747-300
Topic Author
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RE: Why Did Boeing And MDD Merger?

Thu Apr 26, 2001 1:01 am

Which airline should have been the launch customer for the MD-95 ?

tg 747-300
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