McDonnell Douglas Corporation

McDonnell Douglas Corporation, former corporation, based in St. Louis, Missouri, that was once the world’s largest producer of military aircraft and a leading manufacturer of commercial airplanes. In 1997 McDonnell Douglas and The Boeing Company merged into a single company operating under the Boeing name, creating the world’s largest aerospace company.

McDonnell Douglas was created in 1967 through the merger of the McDonnell Company and the Douglas Aircraft Company. Douglas Aircraft was founded in 1920 by Donald W. Douglas, an engineer. The company built many of the early workhorses of the airline industry, including the legendary DC-3, which, after its introduction in 1935, became the first commercial airplane that generated a profit strictly through passenger service. At the beginning of World War II in 1939, 80 percent of the world’s commercial airliners were DC-3s. The DC-7, introduced in 1953, was one of the first commercial airplanes to fly regularly scheduled nonstop routes across the United States and the first to enable nonstop service from the East Coast to the West Coast against prevailing winds. In the late 1950s and early 1960s, competition from the Boeing Company eroded Douglas Aircraft’s dominance of the commercial-airliner market, and by 1966 the company was losing money.

The McDonnell Company was founded in 1939 by engineer James McDonnell. During World War II (1939-1945) the company became a major supplier of United States warplanes. It introduced the F2H Banshee fighter jet in 1947, the F-101 Voodoo fighter jet in 1954, and the hugely successful F4 Phantom II fighter jet in 1958. McDonnell also built the Mercury and Gemini capsules that carried the first American astronauts into space in the early 1960s (see Mercury program; Gemini program).

The merger of the two companies in 1967 created a defense giant that produced military aircraft for nations around the world. McDonnell Douglas’s F-15 fighter became one of the premier warplanes of the U.S. Air Force. In 1970 the company introduced the DC-10 airliner. McDonnell Douglas also led construction of the first American space station, Skylab, which was launched into space in 1973. In 1984 the company purchased Hughes Helicopters, producer of the AH-64A Apache attack helicopter.

In the 1980s the company’s commercial-airliner business accounted for only one-quarter of its total revenues because of fierce competition from Boeing and Airbus Industrie (now Airbus). With the end of the Cold War and resulting decreases in military spending, McDonnell Douglas faced hard times. Revenues dropped by 25 percent between 1990 and 1994, prompting the company to renew its commitment to the commercial market. Its line of passenger jets included the MD-11, a wide-body, three-engine jet with a capacity of up to 410 passengers; the MD-80, a lower-capacity jet that entered service in 1980; and the MD-90, a midsize jet that entered service in 1995. Also in 1995 the company began taking orders for the MD-95, a twin-engine midsize jet designed for short- and medium-range routes.

In 1996 McDonnell Douglas announced that it did not have the money to continue development of its next-generation wide-body passenger jet, drastically reducing the company’s ability to compete in the commercial aircraft market. A further setback came when the U.S. Department of Defense decided to exclude McDonnell Douglas from a competition to design and build the Joint Strike Fighter combat aircraft for the U.S. military, a contract worth billions of dollars. With its long-term prospects uncertain, the company entered talks with Boeing. In late 1996 the two companies announced they would merge into one company, the largest merger ever in the aerospace industry. The merger was approved by federal regulators in 1997.

See also Airplane: History; Aerospace Industry; Military Aviation; Air Warfare.