Air Transport World

Upheavals as blessings. (strikes at Boeing Co. and Airbus Industrie, reorganization of McDonnell Douglas Corp.)

The commercial-jet manufacturers had a banner year in 1989. Boeing sold 887 aircraft, Airbus 421 and McDonnell Douglas 383. The total was up 33% from the previous year. So how did the companies celebrate? Boeing was struck for two months. British Aerospace, the wingmaking partner of Airbus, experienced an 18-week strike that lasted into 1990, crippling Airbus's efforts to boost production and market share. McDonnell Douglas implemented a reorganization that is designed ultimately to cut production costs and make it more efficient but which inconvenienced key customers in the meantime.

Certainly, these upheavals were costly. The companies suffered right along with their customers' marketing plans and their respective countries'export earnings. Both Boeing and McDonnell Douglas reported lower 1989 earnings than were anticipated. Airbus already was suffering enough political problem over the questions of partner work-sharing and financial independence-before British Aerospace threw its spanner in the works.

But there were some silver linings. The 1989 delivery slowdown came at a time of slower airline traffic in the U.S. Also, the aircraft makers do not have to worry about retaliation by customers. After all, the airlines have nowhere else to turn, at least until Japan or other countries enter the business. in fact, the upheavals probably didn't work out too badly for the companies in that all of them had their problems in the same year. An officially recognized cartel could not have done a better job of orchestration. "Well-deserved rest"

Wall Street, which sometimes views negative factors differently from the way mere mortals do, thinks there were pluses, too. Howard Rubel, senior VP-research for C. J. Lawrence, Morgan Grenfall, suggests: "No one will admit publicly that it was a mixed blessing. …

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