Boeing And Mcdonnell Join Forces Strategic Collaboration Will Be Far-Reaching

Boeing and McDonnell Douglas Corp. agreed Monday to collaborate on the development of future 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 the first project will involve sending several hundred Douglas engineers from Long Beach, Calif., to the Seattle area to work on the two so-called stretch versions of the 747 jumbo jet.

Boeing officials said the strategic collaboration will allow the company to take full advantage of McDonnell Douglas’ broad range of design, production and systems capabilities on future models.

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 commercial-airplane backlog, and McDonnell Douglas is struggling to keep its skilled work force employed.

The agreement, which is expected to be final in January, 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. McDonnell Douglas also has suffered recent setbacks on military aircraft programs.

Boeing has orders for 618 aircraft valued at $46 billion this year. But the rush of orders and the development of a larger 747 jumbo jet has pushed Boeing’s factory capacity to the maximum. Sharing the load on wide-body development is expected to ease that pressure, officials say.

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

Aerospace analysts agreed that the collaboration would benefit both parties.

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.