[p_l]

Condit would probably still set in motion the moves that enabled the rot - moving HQ, unrealistic targets for 7X7 (now known as 787), selling off portions of Boeing to skim just the cream at the top, and so on.

Not letting Boeing grab McDonnell-Douglas military projects might have stopped some of that, but it might have also accelerated it.

[m3047]

My impression was that it was a reverse buyout. Where did senior management come from after the merger?

[p_l]

The reverse buyout story is popular, but totally ignores that a bunch of the decisions and policies were established under Condit who was "lifer" at Boeing, and in fact said policies were complained about by engineering from both Boeing and McDonnell-Douglas side, all before Condit was forced by procurement scandal to leave his position

[ablob]

Douglas afaik. Boeing moved HQ and quite a few engineering practices were abandoned.

[p_l]

And all of that was initiated by Condit, who was from Boeing side

[AnthonyMouse]

Except that if it accelerated it then there would still be an independent McDonnel-Douglas to pick up the slack by getting into the passenger airliner business, and in turn the possibility of that would keep pressure on Boeing to clean up their act.

[masklinn]

The reason MDD was merged into Boeing is MDD was in the process of failing: the MD10 was completely outdated, the MD11 was not competitive, and with the Cold War ending the infinite money tap of military projects was closing (it was already quite a ways there, the last supper was in 1993, by the time of the MDD merger half the major contractors were gone)

[runako]

Even so, mergers foreclose options to promote competitiveness. For example: no well-capitalized companies from outside the immediate industry could buy MDD to enter the space (as RocketLab bought Iridium). A failing MDD could have limped along for a decade or more until a tech billionaire (say) decided to buy in and reinvigorate it. It could have been split up, allowing smaller entrants to buy parts of it. It could have been allowed to fail, so any of these types of transactions could have happened at smaller dollar amounts.

Basically, allowing it to merge with its largest competitor was the worst possible outcome for competitiveness and long-term health of the industry.

More to my point, though. There's no real reason our existing anticompetition laws should not have been enforced here. Our culture of selective enforcement of laws is a cancer that manifests in all kinds of negative ways. I strongly advocate that we move towards being a society governed by written laws.

[nradov]

That unlikely hypothetical scenario makes no sense. MDD was going to drop out of the airliner market no matter what. They simply weren't viable. If they hadn't merged with Boeing then it would have been with some other large aerospace or defense company like Raytheon or Lockheed Martin — possibly after a trip through bankruptcy. No "white knight" billionaire was ever going to save them.

[runako]

I laid out a set of scenarios, and it's impossible to know what would have happened had US laws been enforced.

Bankruptcy is a legitimate option -- many companies with productive assets survive and thrive after restructuring. Even a liquidation tends to preserve functioning assets.

Regardless, the larger point stands that it's bad, actually, for the US to selectively enforce laws. In particular, anticompetition enforcement has been notoriously lax for a generation. Hard to make an affirmative case that regulators should continue to ignore existing laws the way they have been doing.

[AnthonyMouse]

> If they hadn't merged with Boeing then it would have been with some other large aerospace or defense company like Raytheon or Lockheed Martin

Which is kind of the idea. You then have Raytheon or Lockheed serving the part of the deep pocket who takes possession of their infrastructure instead of handing it to their only competitor. That company may then notice that they're in a position to take a piece of the huge commercial airliner market if they would make an R&D investment into the thing they just bought, and unlike MDD, they have the resources to do that.

Conversely, the buyer isn't interested in the civilian market at all and only buys them for the military assets and sells the civilian infrastructure at fire sale prices to whoever will take it. That still isn't allowed to be Boeing so you now have someone getting a couple billion dollars worth of infrastructure for 10% of its original creation cost, and that make them a viable company because they're starting off ahead by a large amount of capital infrastructure they didn't have to pay the normal price to get.