McDonnell’s Taiwan Suitor Gets New Chairman : * Aerospace: The selection is expected to ease political problems related to the proposed deal.

TAIPEI, Taiwan —  Earle Ho, a Taiwanese steel executive, was named Thursday to replace David Huang as chairman of Taiwan Aerospace, the firm that may buy up to 40% of McDonnell Douglas’ commercial aircraft operations.

Ho, 53, chairman of the private Tung Ho Steel Enterprise Corp., is expected to relieve Taiwan Aerospace of political problems blamed on Huang, 72, who resigned Wednesday.

News reports in Taiwan linked Huang’s resignation to a decision by the government to acquire a smaller stake in McDonnell than the 40% offered by the American aircraft maker. Taiwan Aerospace is 29% government-owned.

Denny Ko, president of Taiwan Aerospace, said Huang stepped down to reduce political pressures over the proposed deal. Opposition legislators have criticized Huang’s ties with Prime Minister Hau Pei-tsun.

In addition, Huang had raised the ire of opposition legislators by asserting to American audiences that the Taiwan government would subsidize the McDonnell deal until it became profitable. The legislature has not given official backing to the deal.

Ko also acknowledged that the company’s investors may buy less than 40% of the Douglas Aircraft commercial operation in Long Beach. “It can be 30 or 25%,” he said.

Previously, McDonnell officials have said they intend to line up other foreign investors in Asia to take up any slack in the Taiwan deal.

McDonnell Douglas signed a memorandum of understanding last November to sell as much as a 40% stake in its commercial airplane business to Taiwan Aerospace for $2 billion. Development of the company’s next-generation aircraft, called the MD-12, could cost an additional $6 billion, analysts have said.

Under the deal, Taiwan Aerospace would build wings and fuselages for the MD-12, a new wide-body passenger plane that would compete with the Boeing 747.

Originally, the deal was expected to be consummated by the end of January, but Taiwan has taken longer to evaluate the feasibility of the venture. Additional delays have resulted from substantial changes in the design of the new aircraft by McDonnell, apparently undertaken after the original design failed to win any orders.

Ho told a news conference that an official evaluation report on the deal, to be made public next Wednesday, might help win financial support from the private sector.

“I think private enterprises will be interested in the joint venture if the findings of the report prove attractive,” he said. “This company alone does not have the money and resources for the deal with McDonnell Douglas.”

On Wednesday, Economics Vice Minister Yang Shih-chien said the Taiwan government might minimize its investment in the proposed deal, adding that interested parties could form a new investing group for the project.

The mass-circulation United Daily News, quoting unidentified officials, said the Taiwan government might not invest directly in the McDonnell Douglas deal because the parliament is unlikely to approve such an investment now.

Opposition legislators have said the government should not buy into a commercial aircraft maker with financial troubles.