Boeing Merger Forms Aerospace Colossus ‘Douglas Products Division’ May Have An Uncertain Future

The two executives ducked as they stepped out of the compact DC-7 fuselage on display at the National Air & Space Museum and into television lights to announce the beginning of the world’s largest aerospace company.

It was a beginning with a long past, and there were more than a few ironies Monday as Boeing Co. chief Phil Condit described the vast global reach, the nationwide manufacturing capacity and the multi-billion dollar earning potential for the newly formed Boeing.

Condit was marking the first day of operations under the merged company that now includes McDonnell Douglas, once the nation’s largest defense contractor and a keen competitor for commercial airline sales.

The DC-7 out of which Condit stepped with his top deputy, former McDonnell chief Harry Stonecipher, was built in Long Beach, Calif., by Douglas Aircraft, a firm whose future in commercial aviation is very much in doubt as a result of the merger.

Once Boeing’s bitter rival for commercial sales, Douglas now becomes a Boeing supplier, the “Douglas Products Division.” The Long Beach plant will continue to manufacture commercial jets such as the MD-11. But the future of those aircraft programs, already shaky before the merger as McDonnell’s commercial market share dwindled, becomes even more uncertain as a result of the merger.

The news conference took place in the museum’s Air Transportation Gallery, beneath the products of a decades-long rivalry between Boeing and Douglas.

“Just being here in this building causes me to revisit an awful lot of our heritage,” Condit said. “In here you see things that these combined companies have brought to the world of flight. They’re indicative of what our industry and, in particular, our company, can bring to the world of man.”

For all of the money ($48 billion in estimated revenue his year) and employees (220,000 in the United States, Canada and Australia) and clout (more than 60 percent of the global commercial airline market), the two companies that became one Monday traced their origins back along frequently intersecting histories to humble beginnings.

During World War II, aircraft business boomed to the point where Boeing and Douglas were helping each other meet Pentagon manufacturing orders. Of the 12,000 B-17 Flying Fortress bombers delivered during the war, 3,000 were built by Douglas. Boeing reciprocated by building several hundred A-20 Havoc attack bombers for Douglas.

All of this manufacturing prowess traces back to a handful of aviation pioneers.

In 1915, Bill Boeing, his company’s namesake, entered Glenn Martin’s flying school. That same year, Donald Douglas became Martin’s chief engineer.