Sunday, April 16, 2006

The End of Douglas-No Bang, Lots of Whimpering

It is reported by a gentleman in the country of unimpeachable credibility that the last MD95 a/k/a Boeing 717 is in the delivery center at Long Beach, soon to be turned over to AirTran. And that will put finis to commercial aircraft production in an area that was once the epicenter of commercial aircraft manufacture-hell, ALL aircraft manufacture in the known world. Southern California was to aircraft construction what Pittsburgh was to steel and what Lourdes was to holy water.

What it signifies to me is the demise of the only credible domestic competitor that Boeing had in the country. Remember this when you're reading the ever upbeat always positive and sometimes informative Randys' Blog, that because of this a hell of a lot of people lost their jobs.

This IS the end, and the goal was always to drive a stake through the heart of the hated competitor. It's always seemed that there was something a bit personal in all of it. I'd like to have been the fly on the wall in the places where the decision was made.

This kind of thing is common enough in business, but it's rare to see it on such a scale. When one firm in a limited field buys a competitor and idles its plant, there are two effects. First, a competing center of knowledge and expertise is dispersed to the four winds. Second, it raises the bar for potential competitors looking to enter the business to a point that for most of them, it becomes impractical. We see that here in the midwest, as the larger meat packers buy up and idle productive capacity. When some local folks start thinking maybe they could make some money in the cattle business, the large firms start making ominous rumblings about restarting idled plant-that's usually enough to scotch any plans to compete.As a matter of fact, one of my clients used this tactic to good advantage. He's in the industrial electroplating business, and when a large firm failed, he bought the equipment for a song and idled it. It's high dollar to buy, useless to anyone not in the trade, and it raises the bar to potential entrants.

When Boeing bought the place, it let the MD11 bleed to death, and the only thing that kept the smaller line going was the fact that what they had was a damned good product, priced right. People insisted on ordering it despite Boeing's best efforts to kill it.What's the net effect? No center of expertise and human resources in the field outside of Washington state or Toulouse, and if you want a commercial jet made in the states it only comes in one flavor.

Now.....had there been a concerted effort to utilize what was there, I have no doubt that they'd be happily cranking out MD11 freighters for ready cash, the KC11 would be a fact of life, and maybe something else useful would be on the horizon. But they let the whole thing die.

Talk about big mistakes. For a while the Taiwanese were seriously interested in buying the commercial operations, but in the end, I think it was just too much for them to tackle, particularly with Taiwan's curious political situation vis a vis China. There was some talk about cooperative projects with Airbus but those were just rumors and wishful thinking.What position would Airbus have been in today if they'd bought the place?What's the upshot? I'd like to see China buy the type certificate and the tooling. They're bargain hunters. Would Boeing sell?

2 Comments:

At 11:16 AM, Blogger leo said...

Kills me what Boing has done to DAC-LB. At first my mind was boggled when I figured out they bought the place and I was working for "brand X", as my dad a 40 year DAC employee used to say. Well if the plan was to stop us from building DC/MD jets they did it, but I still put the blame for what hapened on the spawn of the companys founders. Donald Douglas Jr. brought the company to the point where it had to merge with Mc Donnell, Sandy and John Mc D just rode the pony into the dirt. Forcing Jim Worsahm to retire after he breathed new life and sales into the place, pure stupid. I just hope Boeing isn't so hard headed that they really try to kill or relocate the C-17.

 
At 11:36 AM, Blogger Robert Luedeman, attorney at law said...

You're absolutely right about Jim Worsham. The man knew how to sell airplanes.

 

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