Re: McDonnell Douglas & Boeing To Merge -- Press Release Text

Date:         16 Dec 96 03:15:37 
From:         kls@ohare.Chicago.COM (Karl Swartz)
Organization: Chicago Software Works, Menlo Park, California
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>Out of curiosity, would there be any warranted efforts to stop this
>merger because of anti-competitive forces (or over concentration) ?

With relatively little business overlap, it seems unlikely.  (MD's
commercial division was soon to be dead anyway.)

>While I personally never really liked McD products, I am saddened to
>see such a big corp go.

I never really thought much of McDonnell, but finally losing the last
vestiges of a historic company like Douglas seems tragic.

>It will be very interesting to see what Boeing does with the DC-9
>line of planes

The MD-95 is almost surely dead.  If ValuJet had't pushed them to make
it bigger, perhaps it might have survived as Boeing's 100-seat plane,
but even that would have been a long-shot.

It will be interesting to see what Boeing does about the MD-80/90.  On
the one hand, Boeing doesn't want to compete with the 737.  But Boeing
also doesn't want to alienate big customers by causing a huge, instant
devaluation of their MD-80/90 fleets.  Delta, for example, might not
be thrilled with a huge write-off on the MD-88 and MD-90-30 fleets.
We might see Boeing offer some sort of trade-in deal to soothe things,
and not incidentally to try to keep Airbus' foot out of the door.

>I have a distinct impression that McD will loose its
>personality/presence in the commercial airline business and that
>Boeing will basically gobble that part up and "paint" it Boeing.
>Is this a fair assumption ?

Seems fair to me, at least on the commercial side.  The only Douglas
piece which *might* have some staying power is the MD-11F -- it has
a niche for which Boeing doesn't have a good answer, and with most of
the development costs already having been written-off, it might be
cost effective to keep it.  With Boeing behind the plane, it would
have less risk than as a product of a feeble Douglas.  If they can
convince Congress that there should be a KC-11, so much the better.
(I have no idea if there have ever been any serious discussions of a
tanker version of the MD-11.)

Karl Swartz	|Home
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