Chapter 601: McDonnell Douglas strategy

The 9.13 crash was guided by a caring person. It was more than two months after the accident that the official investigation report was released. It triggered a trend that was extremely unfavorable to McDonnell Douglas and quickly swept the American continent. The Dao Company hated it all over and over, because there were too many problems and pressures to face.
They not only have to face almost all the inquiries from customers, but also do everything possible to explain to the customers who come to ask for a chargeback, hoping to save the order as much as possible.
Unfortunately, more and more customers come with this purpose.
The wave started in the U.S., but it quickly spread to the world. Virgin Atlantic, All Nippon Airways, Korean Air, Lufthansa, Singapore Airlines... Almost all airlines took the U.S. airlines as examples and stopped. I flew the DC-10, and sent someone to negotiate the follow-up issues—that is, ask McDonnell Douglas to cancel the subsequent DC-10 purchase contract and pay compensation in accordance with the contract—
To buy an airplane, you need to pay a large amount of deposit and then queue up. This is the rule. Everyone abides by the rules of the game. However, you, the aircraft manufacturing company, will deliver the aircraft with potential safety hazards to customers because of its own problems. This is you. It’s wrong, so compensation is necessary, and not only the principal must be compensated, but also the huge interest incurred from it!
However, all aircraft manufacturing companies have very tight capital chains. As mentioned earlier, all customers pay according to their own aircraft manufacturing nodes, while aircraft manufacturing companies place orders from component suppliers. But this is not possible, so they always need to use the order as a collateral to make a large amount of financing from the bank to maintain the normal operation of the company.
Well, McDonnell Douglas is currently one of the largest aircraft manufacturing companies in the United States. It produces a large number of civil aviation airliners every year. There is still a large number of military F-15s waiting to be delivered, and the company has just cooperated with British Aerospace Corporation and the "Four The production line for the AV8B that is about to start production is also under intense construction...
These are all gold swallowing beasts. If these users who come to the door have to repay the deposit or even be held accountable for compensation, then these debts with varying maturities are going to die!
It is definitely impossible to hide. McDonnell Douglas is so big that it is impossible to bury his head in the sand to hold an ostrich. There are only two ways to solve the problem.
One, of course, is to try to persuade users to reserve orders and wait for the FAA's further investigation results. As long as it can be delayed for a period of time, it will always win a turn. The public relations department of McDonnell Douglas has been fully activated, whether it is the FAA, the major media or even Congress. Both houses have become the targets of their lobbying. As long as the incident can be concealed for some suitable reason, there is still salvation.
After all, McDonnell Douglas is also one of the few manufacturers on the market that can provide almost all of the civil aviation aircraft models. On the basis of the company's efforts to persuade and give great discounts, it is still very promising to save some orders.
Of course, 100% of that is unnecessary, so for those users who are very determined, only pinch their noses to refund and compensate, and that also means a large amount of cash loss.
The second is to find a way to raise a large amount of cash as soon as possible. In addition to maintaining the normal operation of the company, it is also necessary to pay the due debts normally, so as to avoid the capital market from further interpretation of the difficulties faced by McDonnell Douglas-the stock price has fallen to On the floor, some of the company’s major shareholders pledged their equity to bank loans that are on the verge of liquidation, or some have liquidated their positions. If this continues, McDonnell Douglas will be able to bankrupt himself without any other hands.
However, this one is a bit difficult to implement.
Banks are not fools, and capital is the worst of the poor and loves the rich. When you are boiled with flowers, some people come up on poles to sweetly icing on the cake and lend you money to earn interest from you, but once If you are down, that group of people will inevitably disappear.
This is what McDonnell is facing now.
Everyone can tell that McDonnell Douglas is sad at this level. At this moment, it is really difficult to borrow money from the bank. People do not say not to borrow, but McDonnell, or you Can you clear the old accounts before borrowing the new ones? As the saying goes, it’s not difficult to borrow and borrow again...
McDonnell Douglas has visited almost all the large banks, and the answers it gets are almost always for consideration, research and research, but there are a few small and medium-sized banks willing to take some risk to lend them loans, but unfortunately the credit line they can give is not considered. It was too high, but the interest was quite high, but at this time McDonnell did not care about anything. Something is better than nothing, so they finally got a little life-saving money.
However, not all large banks shut out McDonnell Douglas. One bank gave a positive answer after considering research.
Well, children's shoes, you guessed it again, of course our great philanthropist-Bank Mellon.
However, the bank also said that in view of McDonnell Douglas' current operating and debt situation, your collateral must be set up according to a relatively high standard. According to the bank’s evaluation of all McDonnell’s operating projects, The U.S. Air Force’s F-15 fighter project is a benign asset with relatively safe cash flow, and it is most appropriate to use it as a mortgage.
Although McDonnell Douglas is now willing to pay a very high price in order to get cash, the conditions offered by Mellon Bank are still difficult for them to accept. It is not that they don't want to do it, but it is too harsh.
The F-15 fighter, which started with the NASALFAX-8 fixed-wing program, has received 424 orders from the U.S. Air Force and the National Guard since its first official model F-15A/B was officially finalized and put into production in 1976. Among them, the number of Type A reached 365, and the number of Type B two-seater coaches reached 59. Most of these aircraft have been delivered. The average unit price of delivered bare machines has reached 20 million US dollars, and the profit margin is close to 25%. In other words, only through the F-15 project, McDonnell Douglas has obtained 8.5 billion US dollars in sales and more than 2 billion US dollars in profits in the past few years!
These figures show that the F-15A/B fighter has achieved great success, and looking forward to the future, a larger market and higher profits have actually begun to emerge.
The F-15C/D based on the improvement of F-15A/B has also completed the flight test finalization. It will have more excellent flight capabilities and more advanced electronic equipment, and will also gain stronger combat capabilities as a result. With this comes higher prices and greater profits.
According to the results of the communication between McDonnell Douglas and the US Air Force, the unit price of F-15C/D delivered bare metal will reach 25 million US dollars and the possible order will be as high as 500!
What's more, there are countries such as Waguo, Haosha, Issa, South Korea, Singapore and other countries waving banknotes waiting for the United States to open purchase rights to them, and selling to them, the bare metal unit price set by McDonnell Douglas is absolutely impossible It's $25 million!
What is this? This is a big business that may exceed US$20 billion in sales and US$5 billion in profits in the future!
Moreover, no matter from which aspect, the cash flow of this business will be excellent!
But when Mellon Bank asked McDonnell Douglas to use this business as a guarantee, the credit line was only a mere US$1 billion, and it had to be paid in several years.
This is simply taking advantage of the fire!
Therefore, after hearing about the conditions of Mellon Bank, the McDonnell Douglas board of directors certainly refused to approve the loan immediately. Instead, it adopted a wait-and-see policy of waiting and waiting, hoping to find other countermeasures in the next period of time. To survive this crisis.
After all, a company as big as McDonnell Douglas does not mean that it will collapse if it collapses. It does not have enough cash reserves, nor does it mean that it does not exist without it. If you tighten your belt for a few months, maybe a turning point will come?
After the initial panic, and after receiving some life-saving money at a very high price, McDonnell Douglas gradually stabilized its position. Although the DC-10 was temporarily suspended, it relied on the huge size and market of McDonnell Douglas. Occupation rate has saved many customers' orders, and they agreed to wait a while to evaluate the further development of the situation. Another major airliner series, DC-9, still maintains strong order delivery. The company has many other projects proceeding in an orderly manner. More than 100,000 employees have gradually stabilized their emotions and started normal work. It seems to get better.
Of course, with all this gradually getting back on track, another matter was also brought up by the senior management of McDonnell Douglas.
Obviously, the reason why McDonnell Douglas was in an extremely unfavorable situation in this accident was inseparable from Boeing’s behind-the-scenes promotion. Then, it is time to collect some black materials, and when the opportunity comes, clean up the biggest competition. Opponent, otherwise, I can't swallow this breath.
The relevant departments of McDonnell Douglas were quickly mobilized, gathering intelligence everywhere to prepare for opportunities that might arise at any time.
It’s just a plane. Which airline company can't make planes?
Boeing, let's wait and see!
Unfortunately, what McDonnell didn't know was that the falcons who stared at them this time were definitely not just the Boeing pair.