Controversial Merger Sparks New Verbal Sparring Mcdonnell Douglas Ceo Says Eu Opposition To Deal With Boeing Smacks Of Airbus Favoritism

McDonnell Douglas’ boss lashed out at a key European Union official Wednesday, calling his criticism of the pending Boeing-McDonnell merger “totally inappropriate.”

In blunt language, McDonnell Chairman and Chief Executive Officer Harry Stonecipher said the European Union’s executive agency is showing a clear bias toward Airbus, Boeing Co.’s European rival in the commercial airliner business. Stonecipher directed his ire at Karel van Miert, the EU’s competition, or antitrust, chief.

Van Miert recently called the $13.3 billion merger “extremely problematic” because Boeing has supply contracts with American Airlines and Delta Air lines that exclude competition from Airbus. The 15-nation EU does not have the authority to stop the merger. But an adverse ruling by the EU executive agency would greatly complicate Boeing’s prospects for sales in Europe.

“To hold the merger hostage, and I’ll use that term, is totally inappropriate, and I would say that the man has prejudged it,” Stonecipher said of Van Miert. “It’s obvious he wants a (trade) war, and I don’t want a war. We’re really being denied due process by the way he’s behaving.”

Boeing and McDonnell are scrambling to win Federal Trade Commission approval of the merger in June, a process that involves trucking millions of pages of supporting documents to FTC headquarters.

FTC approval would put the full weight of the U.S. government behind the merger, upping the pressure on the EU to accept the deal. At stake in the competition between Boeing and Airbus are tens of thousands of jobs and billions in sales in a battle of aerospace titans - virtually the only competitors in the commercial airline market.

Both companies have scheduled shareholder meetings for July 25 for approval of the merger.

Against concerns about waning competition in the commercial airline industry, Stonecipher said the Boeing-McDonnell deal would change little since Douglas Aircraft, McDonnell’s commercial aircraft maker, “has been going straight down a ski slope” in terms of sales.

“I don’t think there will be any lack of competition,” Stonecipher said, noting that at least one new Asian airline builder was likely to enter the marketplace.

In a breakfast meeting with reporters, Stonecipher said the near-term employment prospects at both Boeing and McDonnell Douglas are bright. Boeing’s commercial airliner business is booming while McDonnell’s defense lines for such aircraft as the F-15 and FA-18 fighters and C-17 military transport are growing.

When Boeing announced in December its plan to buy McDonnell, the two companies had a combined 204,000 employees. Today that number is 218,000 and is likely to grow to 225,000 by the time the deal is closed, Stonecipher said. Boeing is the world’s largest commercial aircraft builder. McDonnell was for years the nation’s largest defense contractor.

“It’s really a merger of complementary companies,” Stonecipher said.

Workers in some of the communities where Boeing or McDonnell operate are jittery about post-merger plant closures or employee relocations. Stonecipher dismissed those concerns, saying the merged company will continue to operate major facilities in Seattle; Long Beach, Calif.; St. Louis; Mesa, Ariz.; Wichita, Kan.; and Philadelphia.

“Our whole idea here is not to move people around. We’re not about disrupting people’s lives,” Stonecipher said. Those most at risk of layoffs are at the two corporate headquarters where duplicative functions such as payroll and public affairs may be trimmed.

No one at either company is talking about shutting down McDonnell’s massive St. Louis operation, he said.