|Founded||April 28, 1967|
|Defunct||August 1, 1997 (merger date)|
|Fate||Merged with Boeing|
|Harry Stonecipher (CEO, 1994-)|
|Website||mdc.com (Archived 6 July 1997 at the Wayback Machine)|
McDonnell Douglas was a major American aerospace manufacturing corporation and defense contractor formed by the merger of McDonnell Aircraft and the Douglas Aircraft Company in 1967. Between then and its own merger with Boeing in 1997, it produced a number of well-known commercial and military aircraft such as the DC-10 airliner, the F-15 Eagle air superiority fighter, and F/A-18 Hornet multirole fighter.
The corporation was headquartered at St. Louis Lambert International Airport near St. Louis, Missouri, and its subsidiary, McDonnell Douglas Technical Services Company (MDTSC) was based at another location in St. Louis County, Missouri.
The company was formed from the firms of James Smith McDonnell and Donald Wills Douglas in 1967. Both men were of Scottish ancestry, graduates of MIT and had worked for the aircraft manufacturer Glenn L. Martin Company.
Douglas had been chief engineer at Martin before leaving to establish Davis-Douglas Company in early 1920 in Los Angeles. He bought out his backer and renamed the firm the Douglas Aircraft Company in 1921. McDonnell founded J.S. McDonnell & Associates in Milwaukee, Wisconsin in 1926. His idea was to produce a personal aircraft for family use. The economic depression from 1929 ruined his ideas and the company collapsed. He worked at three companies with the final being Glenn Martin Company in 1933. He left Martin in 1938 to try again with his own firm, McDonnell Aircraft Corporation, this time based at Lambert Field, outside St. Louis, Missouri.
World War II was a major earner for Douglas. The company produced almost 30,000 aircraft (Douglas DC-3) from 1942 to 1945 and the workforce swelled to 160,000. Both companies suffered at the end of hostilities, facing an end of government orders and a surplus of aircraft.
After the war, Douglas continued to develop new aircraft, including the DC-6 in 1946 and the DC-7 in 1953. The company moved into jet propulsion, producing its first for the military - the conventional F3D Skyknight in 1948 and then the more 'jet age' F4D Skyray in 1951. In 1955, Douglas introduced the first attack jet of the United States Navy with the A4D Skyhawk. Designed to operate from the decks of the World War II Essex-class aircraft carriers, the Skyhawk was small, reliable, and tough. Variants of it continued in use in the Navy for almost 50 years, finally serving in large numbers in a two-seat version as a jet trainer.
Douglas also made commercial jets, producing the DC-8 in 1958 to compete with the Boeing 707. McDonnell was also developing jets, but being smaller it was prepared to be more radical, building on its successful FH-1 Phantom to become a major supplier to the Navy with the F2H Banshee and F3H Demon; and producing the F-101 Voodoo for the United States Air Force (USAF). The Korean War-era Banshee and later the F-4 Phantom II produced during the Vietnam War helped push McDonnell into a major military fighter supply role. Douglas created a series of experimental high-speed jet aircraft in the Skyrocket family, with the Skyrocket DB-II being the first aircraft to travel at twice the speed of sound in 1953.
Both companies were eager to enter the new missile business, Douglas moving from producing air-to-air rockets and missiles to entire missile systems under the 1956 Nike program and becoming the main contractor of the Skybolt ALBM program and the Thor ballistic missile program. McDonnell made a number of missiles, including the unusual ADM-20 Quail, as well as experimenting with hypersonic flight, research that enabled it to gain a substantial share of the NASA projects Mercury and Gemini. Douglas also gained contracts from NASA, notably for part of the enormous Saturn V rocket.
The two companies were now major employers, but both were having problems. McDonnell was primarily a defense contractor, without any significant civilian business. It frequently suffered lean times during downturns in military procurement. Meanwhile, Douglas was strained by the cost of the DC-8 and DC-9. The two companies began to sound each other out about a merger in 1963. Douglas offered bid invitations from December 1966 and accepted that of McDonnell. The two firms were officially merged on April 28, 1967 as the McDonnell Douglas Corporation (MDC). Earlier, McDonnell bought 1.5 million shares of Douglas stock to help its partner meet "immediate financial requirements." The two companies seemed to be a good fit for each other. McDonnell's military contracts provided an instant solution for Douglas' cash flow problems, while the revenue from Douglas' civil contracts would be more than enough for McDonnell to withstand peacetime declines in procurement.
McDonnell Douglas retained McDonnell Aircraft's headquarters location at what was then known as Lambert-St. Louis International Airport, in Berkeley, Missouri, near St. Louis. James McDonnell became executive chairman and CEO of the merged company, with Donald Douglas Sr. as honorary chairman.
In 1967, with the merger of McDonnell and Douglas Aircraft, David S. Lewis, then president of McDonnell Aircraft, was named chairman of what was called the Long Beach, Douglas Aircraft Division. At the time of the merger, Douglas Aircraft was estimated to be less than a year from bankruptcy. Flush with orders, the DC-8 and DC-9 aircraft were 9 to 18 months behind schedule, incurring stiff penalties from the airlines. Lewis was active in DC-10 sales in an intense competition with Lockheed's L-1011, a rival tri-jet aircraft. In two years, Lewis had the operation back on track and in positive cash flow. He returned to the company's St. Louis headquarters where he continued sales efforts on the DC-10 and managed the company as a whole as President and chief operating officer through 1971.
The DC-10 began production in 1968 with the first deliveries in 1971. Several artists impressions exist of an aircraft named the "DC-10 Twin" or DC-X which McDonnell Douglas considered in the early 1970s but never built. This would have been an early twinjet similar to the later Airbus A300, but never progressed to a prototype. This could have given McDonnell Douglas an early lead in the huge twinjet market that subsequently developed, as well as commonality with much of the DC-10's systems.
Through the years of the Cold War McDonnell Douglas had introduced and manufactured dozens of successful military aircraft, including the F-15 Eagle in 1974, the F/A-18 Hornet in 1978, and other products such as the Harpoon and Tomahawk missiles. The oil crisis of the 1970s was a serious shock to the commercial aviation industry, as a major manufacturer of commercial aircraft at the time, McDonnell Douglas was hit by the economic shift and forced to contract heavily while diversifying into new areas to reduce the impact of potential future downturns.
In 1984, McDonnell Douglas expanded into helicopters by purchasing Hughes Helicopters from the Summa Corporation for $470 million. Hughes Helicopters was made a subsidiary initially and renamed McDonnell Douglas Helicopter Systems in August 1984. McDonnell Douglas Helicopters's most successful product was the Hughes-designed AH-64 Apache attack helicopter.
In 1986, MD-11 was launched, an improved and upgraded version of DC-10. The MD-11 was the most advanced trijet aircraft to be developed. It sold 200 units, but was discontinued in 2001 after the merger with Boeing as it competed with the Boeing 777. The final commercial aircraft design to be made by McDonnell Douglas came in 1988. The MD-90 was a stretched version of the MD-80, equipped with International Aero Engines V2500 turbofans, the largest rear-mounted engines ever on a commercial jet. The MD-95, a modern regional airliner closely resembling the DC-9-30, was the last McDonnell Douglas designed commercial jet produced.
On January 13, 1988, McDonnell Douglas and General Dynamics won the US Navy Advanced Tactical Aircraft (ATA) contract. The US$4.83 billion contract was to develop the A-12 Avenger II, a stealth, carrier-based, long-range flying wing attack aircraft that would replace the A-6 Intruder.
In January 1989, Robert Hood, Jr was appointed President to lead the Douglas Aircraft Division, replacing retiring President Jim Worsham. McDonnell Douglas then introduced a major reorganization called the Total Quality Management System (TQMS). TQMS ended the functional setup where engineers with specific expertise in aerodynamics, structural mechanics, materials, and other technical areas worked on several different aircraft. This was replaced by a product-oriented system where they focus on one specific airplane. As part of reorganization, 5,000 managerial and supervisory positions were eliminated at Douglas. The former managers could apply for 2,800 newly created posts; the remaining 2,200 would lose their managerial responsibilities. The reorganization reportedly led to widespread loss of morale at the company and TQMS was nicknamed "Time to Quit and Move to Seattle" by employees referring to the competitor Boeing headquartered in Seattle, Washington.
Technical issues, development cost overruns, growing unit costs, and delays led to the termination of the A-12 Avenger II program on January 13, 1991, by Defense Secretary Dick Cheney. Years of litigation would proceed over the contract's termination: the government claimed that the contractors had defaulted on the contract and were not entitled to the final progress payments, while McDonnell Douglas and General Dynamics believed that the contract was terminated out of convenience, and thus the money was owed. The case was contested through litigation until a settlement was reached in January 2014. The chaos and financial stress created by the collapse of the A-12 program led to the layoff of 5,600 employees. The advanced tactical aircraft role vacated by the A-12 debacle would be filled by another McDonnell Douglas program, the F/A-18E/F Super Hornet.
However the purchasing of aircraft was curtailed as the Cold War came to an abrupt end in the 1990s. This curtailment in military procurements combined with the loss of the contracts for two major projects, the Advanced Tactical Fighter and Joint Strike Fighter, severely hurt McDonnell Douglas. McDonnell Douglas built only a small wind tunnel test model.
In 1991, MD-11 was not quite a success; ongoing tests of the MD-11 revealed a significant shortfall in the aircraft's performance. An important prospective carrier, Singapore Airlines, required a fully laden aircraft that could fly from Singapore to Paris, against strong headwinds during mid-winter; the MD-11 did not have sufficient range for this at the time. Due to the less-than-expected performance figures, Singapore Airlines cancelled its 20-aircraft MD-11 order on August 2, 1991, and ordered 20 A340-300s instead.
In 1992, McDonnell Douglas unveiled a study of a double deck jumbo-sized aircraft designated MD-12. Despite briefly leaving the market, the study was perceived as merely a public relations exercise to disguise the fact that MDC was struggling under intense pressure from Boeing and Airbus. It was clear to most in the industry that MDC had neither the resources nor the money to develop such a large aircraft, and the study quickly sank without a trace. A similar double deck concept was used in Boeing's later Ultra-Large Aircraft study intended to replace the 747, but ultimately the double deck concept would not see the light of day until the Airbus A380 in the 2000s.
Following Boeing's 1996 acquisition of Rockwell's North American division, McDonnell Douglas merged with Boeing in August 1997 in a US$13 billion stock swap, with Boeing as the surviving company. Boeing introduced a new corporate identity based on the McDonnell Douglas logo, created by graphic designer Rick Eiber.
Some of the company's lasting legacies are non-aviation related. They are the computer systems and companies developed in the company's subsidiary McDonnell Automation Company (McAuto) which was created in the 1950s initially used for numerical control for production starting in 1958 and computer-aided design (CAD) starting in 1959. Its CAD program MicroGDS remains in use with the latest official version 11.3 issued in June 2013.
By the 1970s McAuto with 3,500 employees and $170 million worth of computer equipment was one of the largest computer processors in the world.
In 1981, McAuto began processing medical claims after it acquired Bradford Systems and Administrative Services for $11.5 million. In 1983 two principals of Bradford who had to come work at McAuto left to form the Sanus Corporation health maintenance organization. The St. Louis office of Sanus was wholly owned by McDonnell Douglas. McDonnell Douglas personnel including Joseph T. Lynaugh and Howard L. Waltman formed Sanus in 1983. In 1986 after McDonnell Douglas reduced its control, Sanus announced a partnership with St. Louis pharmacy Medicare Glaser to form Express Scripts with the pharmacy providing drugs for the Sanus HMO. Charles H. Ridings, formerly in charge of McDonnell Douglas mergers and acquisitions, was named the first chief executive (although he was quickly replaced by Waltman). The new company soon abandoned the HMO business to become with the country's largest independent pharmacy benefit management organization and became the 22nd largest company in the U.S. in 2017 with revenue exceeding $100 billion--making it far larger than McDonnell Douglas. Five new Express Scripts buildings now sit on the east side of Lambert Airport along I-70.
The corporation also produced the Sovereign (later M7000) series of systems in the UK, which used the Sovereign operating system developed in the UK and which was not based on Pick, unlike the "Reality" family of systems listed above. Sovereign, largely a Data Entry solution, had a reasonable market in the United States supporting data entry shops.