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sun, a dark cloud was looming Chang. With actions described increased market share over
over corporate headquarters in by Chang as “very embarrass- the period, MDC was the odd
St Louis, Missouri. ing,” MDC began to equivocate, man out and couldn’t compete.
and then retreat. The Taiwanese
Ultimately the company decided
According to Chang,
“ thought they were being duped that the MD-12 investment did
not make sense given these
and politics took over. The trade
John McDonnell
media headlines told the story
realities, and even if they had
suddenly found that ‘Taiwanese Waffling’ or ‘Taiwan gone to the next steps, the other
this deal was for real Seeks MD-12 Rethink’. “But partners were leery of the long
time-frame to see returns on
this was simply not the case,”
and that MDC would asserted Chang. their investment. That is some-
have to bet its future Indeed, John McDonnell con- thing that is difficult for investors
on the success of firmed to the author Chang’s outside the aerospace industry
to stomach.”
the MD-12, since MDC would statement than it was MDC that
still be responsible for 51% of abandoned the deal. McDonnell Part of the problem for
Douglas’s future financial needs. said in an email statement, McDonnell was that the US
Such a bold move is complicated “(The) objective was to make stock market, driven by short-
and risky—it was very, very the project a worldwide consor- term profits, never warmed to
sobering for John. tium with Taiwan a big player. the Taiwan association. MDC’s
However, the reasons the pro- stock had slumped from a high
“The problem was simple. You gram didn’t go forward were near $75 in November 1991 to
have to bet the farm every time related to the deterioration of the $38 in June 1992.
you build a new commercial market at that time and MDC’s
aircraft. MDC blamed the Taiwan financial position. With the lever- Steven F Udvar-Hazy,
side, but that is simply not the age Airbus had with government founder and then president of
way it happened,” revealed subsidies and Boeing had with International Lease Finance
Corporation (ILFC), responding
to the collapse of the MD-12
and the slashing of 21,000 jobs
at Douglas, told The Wall Street
Journal early in 1993,
“not only do they
[MDC] have to con-
vince airlines that their
hardware is good but
they must also con-
vince them that the
company has a long-
term commitment to
commercial aviation
and will stand behind
the product—and that
is sometimes tougher.”
In fact, it was too tough with a
McDonnell Douglas executives discuss merger with Boeing the only way
the MD-12 Business Class with airline chiefs. out in 1997.•
ASIAN AIRLINES & AEROSPACE JANUARY - FEBRUARY 2024 | 21
