A lot has been written about the decline and fall of the Douglas Aircraft Company. How did the world’s preeminent aircraft manufacturer vanish? I’m not going to try to give a definitive answer, but I’ll touch upon a few examples of poor management that I’m aware of.
I believe that it started in the 1950s, when Boeing committed to building a prototype jet transport plane with its own money (no prior sales commitments).
They were angling for two markets – a jet tanker for the Air Force, and the commercial transport market. Why, I asked, didn’t we compete? After all, at the Douglas El Segundo plant we had already built the twin jet, swept-wing Navy bomber, the A3D Skywarrior. A decade earlier, El Segundo had built a commercial airplane, the DC-5, but with the onset of WW II, the DC-5 was abandoned to allow the El Segundo plant to concentrate on Navy attack airplanes.
We had the technology within the Douglas corporation to pursue the same objectives as Boeing. However, the airlines had recently equipped themselves with DC-6s and DC-7s, and Donald Douglas said he wanted to give them time to recoup their investment before re-equipping with jets. He said “We don’t want to make headlines, just a few lines on the financial page.”
By the time Douglas decided to build the DC-8, we had handed Boeing a large head start. They won the tanker contract (KC-135) and a large share of the commercial market (B-707). Also, since they shared the same basic structure, a part of the design costs were charged to the government. We never sold a
DC-8 version to the government, so had to bear the full development costs. In spite of all this,, the DC-8 program was reasonably successful , with 465 airplanes in all versions delivered to the airlines. But Boeing had surpassed Douglas in market share of commercial airplanes. Douglas never caught up.
The DC-9 program followed, and it too was pretty successful. It went through several versions over the next 35 years, with a total of 650 airplanes delivered, including a few to the military as hospital planes and VIP transports.
In the mid 1960s Douglas was in a financial bind. Due to the Viet Nam war, there was a severe shortage of jet engines, and because of that we had a back yard full of commercial airplanes we couldn’t deliver. When we asked for help the government wasn’t sympathetic, and told us to find a merger partner. We entered into a merger with the MacDonnell Aircraft company. In what was supposed to be a merger of equals, the MacDonnell stockholders, with a company half the size of Douglas, wound up owning two thirds of the combined MacDonnell Douglas corporation.
The DC-10 series was our last all-new design, started after the merger. James S. MacDonnell, with little experience in commercial aircraft, gave a reluctant go-ahead for the DC-10. It was a winner, beating out the similar Lockheed L-1011 and, at the time, better sized to the airlines needs than the Boeing 747. Boeing nearly went broke on the 747 and the company was reduced in size by two thirds, spawning the famous sign, “Will the last person to leave Seattle please turn out the lights.”. Production of the three-engine Boeing 727 kept the company alive. After 10 years, air travel had increased to where the larger 747 made sense on some routes, and no one had a product which could compete with it.
For the next 20 years, Douglas made “derivative” airplanes, including the MD-11 (derived from the DC-10) and the MD-80 series (derived from the DC-9). These continued to be profitable, however, every airplane design eventually reaches a point where an all-new design is better than improving the old design.. For example, aircraft praised as being fuel-efficient and low noise when first sold, are described a few years later as “gas guzzlers” as engine design evolves. Sometimes an airplane can be fitted with new engines, but sometimes it isn’t practical, either economically or mechanically.
In an area with which I have some firsthand experience, I worked for a while in the group responsible for the designs of ejection seats and of bomb racks. We were developing the BRU-32 bomb rack for the F-18 fighter which was under development at the St. Louis (MacDonnell) location. A key component of this rack was the breech, a complex machined part which held the powder cartridges which powered the rack. We had sufficient time to design and obtain steel forgings from which to make the breeches, saving a great deal of machining which would be required to make breeches from solid bar stock.
Years earlier, we had learned at the El Segundo plant (Weitekamp’s College) to inspect parts in progress, to avoid investing more machining effort in a part which was already doomed to be scrap. At Long Beach, this policy was largely ignored. They took a first machine cut on each of a year’s supply of forgings before inspecting their work. All the forgings were ruined, forcing us into vastly more expensive substitute parts made from solid bar. ‘There goes our profit” said the boss.
One of our products was the BRU-33 bomb rack, an assembly of two bomb ejectors with an aerodynamic fairing at each end. This fairing was designed to be made of deep-drawn aluminum half-shells which would be welded together. Nothing unusual or exotic about it.
Our production planners assigned it to a surprise manufacturing department, not because they had any expertise in this area, but because ”they needed the work.” Engineering apparently had no vote (or veto) in this decision. The parts they made were not acceptable, and they couldn’t seem to resolve the problems.
In an effort to regain control, Engineering decided to redesign the fairing to be made from an epoxy-fiberglass composite, allegedly to reduce weight and cost. In fact, there was no reduction of weight or cost, and other problems were introduced.
For electronic reasons, the interior of the plastic fairing had to be coated with an electrically conductive paint, and the repairability of damaged fairings didn’t meet Navy guidelines.
A company in Great Britain had developed a new aluminum alloy for deep-drawing (drop-hammer forming). Engineering specified that the fairings be made of that proprietary alloy, so the British company was the only permissible source, and they soon provided fairings which were what we wanted in the first place. In the meantime, the waste of resources was considerable, and the Douglas manufacturing departments, both capable and incapable, were without the work..
The actual assembly of the bomb racks was a victim of academia. Management chose to implement guidelines – probably originating with Harvard Business School, for scheduling the work. Working backward from a schedule delivery date, they prescribed just when each task would be done. No advance sub-assembly could be done, even though the assemblers were there and waiting. Both the engineering and the assembly departments called it “dumb”. Management stuck with their “scientific” procedures, resulting in extra costs and missed schedules.
Here again, the solution was outsourcing. Assembly of the bomb racks was transferred to a facility in Florida, where labor was cheaper, and far fewer “paper shufflers” were being paid to slow things down. But what should have been a very profitable product line probably made the company little or nothing.
Harold Adams, our chief engineer at the Long Beach plant for many years, ending with the DC-10 era, wrote a book with his explanation for Douglas’ demise, after his retirement to the Philippines.
Mr. Adams opined that often there had been insufficient design oversight. A design concept was sometimes adopted with too little checking, critique, or prototype testing. A prime example was the DC-8 wing. With the same engines and power settings, a Boeing 707 could outrun the early DC-8s. This was corrected on later DC-8s, but it had provided a big advertising plus for Boeing.
At the El Segundo plant, where we built Navy attack planes, we were accustomed to having our design calculations checked by other engineers, and having group critiques of a design before we cut metal. The commercial division seemed to be less thorough.
Timidity was a factor. At one point, we had designed a lighter version of the DC-10, with two engines instead of three. It was known as the Twin Ten. We had reached the point of cutting metal when top management decided to cancel the project. Sales were not accumulating fast enough to suit them.
My personal impression was that “first-line management”, that is the lower level of management, was pretty good. However, the middle and upper levels of management often seemed less competent. They seemed to illustrate the “Peter Principle”, which says that in a hierarchy, each person rises to his level of incompetence.” Douglas’ management often seemed to be outsmarted by its’ competitors,
After the face-off between the DC-10 and the Lockheed L-1011, “Mr. Mac” had proclaimed that we wouldn’t engage in more head-to-head contests with similar designs. Hearing that, Boeing rubbed its hands with glee and proceeded to design the 757, 767 and 777 airplanes, covering every size and range the airlines were likely to want, , leaving no “niche” for Douglas to inhabit.
This situation was worsened by the competition from the new European Airbus Industries, which was heavily subsidized by European governments. Our market share shrank. And of course, those governments saw to it that their state-owned airlines purchased the Airbus products.
When The MacDonnell family took over Douglas Aircraft Company,, they showed little interest in perpetuating the Douglas Commercial heritage. The MacDonnell family, having grown enormously rich, chose to avoid the rough-and-tumble of the commercial aircraft market, which was growing increasingly competitive.
Actually, there was a final effort to revive the commercial aircraft line. We had in preliminary design the MD-12, which would have been in the same size range as the Airbus A-380, and meant to reach the market a couple of years sooner than the A-380. We had built a two-story cabin mockup, through which we showed potential customers, and the project was progressing smoothly. Then one day it was suddenly cancelled. “That makes no sense” said some of the top designers.
The next day, the Boeing buy-out of MacDonnell-Douglas was announced. “Now, it makes sense,” they said. When Boeing bought MacDonnell-Douglas, it had even less interest than MacDonnell in preserving the “DC” tradition.
So at the completion of the production run of the Boeing 717 (nee MD-95) airplane, the Douglas Commercial airplane era was ended.