Printer Friendly

McDONNELL DOUGLAS ANNOUNCES CONSOLIDATION OF SIX GOVERNMENT AEROSPACE COMPANIES

 McDONNELL DOUGLAS ANNOUNCES CONSOLIDATION
 OF SIX GOVERNMENT AEROSPACE COMPANIES
 ST. LOUIS, Aug. 10 /PRNewswire/ -- McDonnell Douglas (NYSE: MD) announced today it will consolidate its six Government Aerospace companies into two groups to streamline operations and create greater efficiencies.
 This realignment, effective immediately, will have no effect on Douglas Aircraft Co.'s commercial aircraft operation, said McDonnell Douglas Chairman and Chief Executive Officer John F. McDonnell.
 The consolidation was one of several actions outlined by McDonnell, who said "changes in today's aerospace industry require a more focused, yet flexible, management approach."
 The new groups will be led by John P. Capellupo, currently president of McDonnell Aircraft Co. in St. Louis, and Kenneth A. Francis, currently president of McDonnell Douglas Space Systems Co. in Huntington Beach, Calif.
 Capellupo will become executive vice president and will be responsible for McDonnell Aircraft, McDonnell Douglas Missile Systems Co. and McDonnell Douglas Helicopter Co.
 Francis will become executive vice president responsible for McDonnell Douglas Space Systems, McDonnell Douglas Electronic Systems Co. and the C-17 program and other military work that were part of Douglas Aircraft.
 As part of the restructuring, Herbert J. Lanese, currently senior vice president-finance, also will become executive vice president and retain his post as chief financial officer of McDonnell Douglas.
 The new management structure will lead to other staff consolidations on a regional basis as duplicated services are eliminated, McDonnell said.
 The three new executive vice presidents -- along with McDonnell and MDC President and Chief Operating Officer Gerald A. Johnston -- will comprise the newly-formed Office of the Chairman.
 The Office of the Chairman will serve as the senior management council and policy-making body for the McDonnell Douglas Government Aerospace business.
 Douglas Aircraft President Robert H. Hood Jr., as well as C. James Dorrenbacher, senior vice president-group executive for McDonnell Douglas' complementary businesses, will continue to report directly to McDonnell and Johnston.
 "Today I am announcing what we are going to do; during the next 90 days the Office of the Chairman will determine how we are going to do it, and it will oversee the actual restructuring processes," McDonnell said.
 "Our strategy is to concentrate on businesses where we are -- or can become -- the No. 1 or No. 2 company worldwide."
 That strategy is the basis for McDonnell Douglas' earlier decision and continuing effort to seek a global alliance for Douglas Aircraft. The company already has a solid base with the MD-80, MD-90 and MD-11 aircraft programs and will continue to actively explore the MD-12 jumbo jet, he said.
 "Even though we have substantial business in the defense helicopter market and good opportunities in the commercial market, the investment and time required to become the No. 1 or No. 2 helicopter company overall is too great to proceed on our own," McDonnell said.
 "Therefore, we will seek a joint venture partner that will enable us to reach that objective for the helicopter company or we will seek a qualified and appropriate buyer for it," McDonnell said. "We will pursue both options for the helicopter company vigorously and simultaneously.
 "Once these goals for Douglas Aircraft and the helicopter company are met, we will be a global leader in every primary McDonnell Douglas business category," McDonnell said.
 As part of the consolidation announced today, McDonnell Douglas will cease operations at its Columbus, Ohio, plant in 1993, a decision based on the continuing need to reduce costs.
 The plant, which manufactures parts for the C-17, MD-11 and MD-80 aircraft, has a workforce of 1,000. That work will be transferred to other company facilities and suppliers.
 The Ohio plant is the third facility slated for closure by McDonnell Douglas for cost reduction reasons. The company already has announced impending plant closures in Torrance and Culver City, Calif.
 "We know that the aerospace industry will be very different in five years with the decline in military spending and the turmoil in the commercial air carrier industry.
 "I noted in our 1991 annual report that 'there will be further restructuring in some of our businesses as we grapple with the problem of excess capacity' in our industry.
 "Even before those words were written, we began taking a close look at our management structure, our operating costs and our ability to compete. The changes I have announced today resulted from that review," McDonnell said.
 "In order for McDonnell Douglas to achieve our strategic business objectives, we must use our resources more efficiently and reduce our costs. These changes will help us accomplish those goals."
 The following is an employee message from John McDonnell, chairman and chief executive officer of McDonnell Douglas, regarding company restructuring announced today.
 Sharpening Our Focus
 To All Teammates: August 10, 1992
 Today we are announcing a series of actions, effective immediately, that will help McDonnell Douglas maintain leadership in our traditional aerospace businesses. The new reality in the aerospace industry demands a management approach that is focused, yet flexible, in light of today's changing market.
 We are going to streamline our operations and create even greater efficiencies for our company. To do that, we are consolidating the six Government Aerospace companies into two groups.
 The new groups will be led by John "Cap" Capellupo, president of McDonnell Aircraft Co., and Ken Francis, president of McDonnell Douglas Space Systems Co.
 Bob Hood will continue to head Douglas Aircraft Co. and report to Gerry Johnston and me. The realignment will have no impact on the company's commercial aircraft operation. In addition, Jim Dorrenbacher will continue as senior vice president-group executive for our complementary businesses.
 Cap becomes executive vice president responsible for McDonnell Aircraft Company, McDonnell Douglas Missile Systems Company and McDonnell Douglas Helicopter Co.
 Ken becomes executive vice president responsible for McDonnell Douglas Space Systems Co., McDonnell Douglas Electronic Systems Co. and DACUs government aircraft segment, which consists primarily of the C-17 program, along with some KC-10 program support activity.
 Placing the C-17 program with other government aerospace operations will provide for a sharper focus on this important program and allow Bob Hood to concentrate on our commercial operations.
 Also, Herb Lanese becomes an executive vice president, and he will retain his duties as chief financial officer for McDonnell Douglas.
 We are creating an Office of the Chairman, consisting of Cap, Ken, Herb, Gerry and me. Together, we will serve as the senior management council and the policy-making body for our Government Aerospace business.
 These changes are based on our strategy of concentrating our business on where we are -- or can become -- the No. 1 or No. 2 company worldwide in all of our principal aerospace businesses.
 That strategy is what led us to seek a global alliance for Douglas Aircraft, which we are continuing to do, and it has prompted us to decide to also seek a joint venture partner for our helicopter company.
 The helicopter company has substantial business in the defense market and good opportunities in the commercial markets, but the time and investment required to become No. 1 or No. 2 is too great. Therefore, we're going to seek a joint venture partner that will enable us to reach that objective, or we will seek a qualified and appropriate buyer for it. We will pursue both options vigorously and simultaneously.
 We know we have to continue to reduce costs and improve efficiency. That requires hard decisions, and one of those hard decisions is to close in 1993 the Columbus, Ohio, plant where parts for the C-17, MD-11 and MD-80 programs are made. The work at that plant, which has a workforce of 1,000, will be transferred to other facilities.
 Our teammates at Columbus have a reputation for skilled craftsmanship, cooperation and high achievement. The decision to stop our work there was even more difficult because of that. These are difficult times in the aerospace industry. There is a declining market base, particularly in the area of defense contracting. The commercial air carrier industry is in turmoil. We know that the aerospace industry will be very different in five years. Just as our plants must retool to meet changing demands, we must sharpen our focus to meet changing market conditions.
 The good news is we have a healthy backlog of work and are prepared to make the changes that will position us to thrive.
 I said in our 1991 annual report that there would be further restructuring in some of our businesses as we grapple with the problems of excess capacity in our industry. We were taking a close look at our management structure long before I wrote those words, and the decisions announced today resulted from that review.
 We know what the challenges are, and we know we must be positioned to meet those challenges. Throughout the next 90 days, we will be developing and implementing our new structure. During this process, we will keep you informed. Working together, we will find ways to use our resources more effectively and reduce our costs.
 Those efforts, coupled with our commitment to customer satisfaction through our total quality management system, will enable us to become the preeminent team of people in aerospace.
 John F. McDonnell
 Chairman and Chief
 Executive Officer
 -0- 8/10/92
 /CONTACT: Pete Sloan, 314-232-2300, or Barbara Anderson, 314-233-2865, both of McDonnell Douglas/
 (MD) CO: McDonnell Douglas Corp. ST: Missouri IN: ARO SU:


AL -- LA010 -- 8472 08/10/92 11:15 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 10, 1992
Words:1552
Previous Article:BANK OF OKLAHOMA AND FOURTH FINANCIAL CORP. OF WICHITA, KANSAS, AGREE TO ACQUIRE SOONER FEDERAL FROM FIRST GIBRALTAR BANK
Next Article:ZDS NAMES BALDWIN TO LEAD DIRECT ORGANIZATION
Topics:


Related Articles
RESTRUCTURING PLANS ANNOUNCED BY MCDONNELL DOUGLAS
U.S. NAVY AUTHORIZES McDONNELL DOUGLAS TO PROCEED WITH PRODUCTION OF SIX HARRIER II PLUS AIRCRAFT
McDONNELL DOUGLAS EXECUTIVE TESTIFIES BEFORE PENTAGON COMMISSION THAT THE COMPANY WILL CONTINUE SHARPENING ITS FOCUS IN AEROSPACE
McDONNELL DOUGLAS ANNOUNCES LEADERSHIP TEAM FOR NEWLY FORMED McDONNELL DOUGLAS DOUGLAS GOVERNMENT AEROSPACE
McDONNELL DOUGLAS ANNOUNCES 300 PRODUCTION WORKER LAY-OFFS
LUCAS EARNS MCDONNELL DOUGLAS PREFERRED SUPPLIER STATUS
THOMAS E. WILLIAMS NAMED DIRECTOR OF EXTERNAL COMMUNICATIONS FOR McDONNELL DOUGLAS
McDONNELL DOUGLAS REALIGNS OFFICE OF THE CHIEF EXECUTIVE
McDonnell Douglas Signs Business Agreement with Government of Hungary

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters