BOEING-McDONNELL DOUGLAS TALKS : Changing Aerospace’s Landscape?

The talks between Boeing Co. and McDonnell Douglas Corp. could lead to a variety of scenarios under which assets would be exchanged or shared. Here are a few:

1. Full Merger

* Combines nation’s two biggest aircraft makers.

* New entity builds commercial jets, military fighters, helicopters, missiles.

* Company’s annual sales top $35 billion.

* Company rivals General Motors Corp. as top U.S. exporter.

* Seen as least likely scenario, partly because of antitrust obstacles.

2. Boeing Buys Only McDonnell’s Commercial Operation

* Leaves United States with one commercial jetliner builder.

* Presents a unified U.S. attack against Europe’s Airbus Industrie.

* Reduces need for joint ventures with Asian entities.

* McDonnell’s commercial plant in Long Beach faces changes.

3. Boeing Buys McDonnell, but Spins Off McDonnell’s Commercial Operation

* Meets antitrust objections to having only one U.S. jetliner builder.

* Boeing doesn’t need to finance McDonnell’s struggling Long Beach operation.

* Defense work further diversifies Boeing’s giant commercial business.

* Deal likely would be supported by Defense Department.

* Pressures rival defense contractors, such as Northrop Grumman Corp., to seek further consolidation.

4. Companies Merge Space Operations

* Combines their current work on NASA’s space station.

* Merged entity also builds missiles, Delta rocket launchers now made by McDonnell in Huntington Beach.

* Joins forces to develop new, reusable launch vehicle for space.

5. Other Possibilities

* Joint venture to develop a 500-seat “super jumbo jet.”

* Military helicopter programs merged.

* Marketing / production programs expanded in Asia, notably China.

* Boeing helps McDonnell produce fighter jets, other military planes.

The market

1994 commercial jetliner market share:

Boeing: 55.1%

Airbus Industrie: 35.3%

McDonnell Douglas: 9.6%

Top defense firms worldwide based on 1994 defense revenue, in billions:

Lockheed Martin Corp.: $14.4

McDonnell Douglas Corp.: $9.2

British Aerospace: $7.3

Hughes Electronics Corp.: $6.3

Northrop Grumman Corp.: $5.4

Loral Corp.: $5.2

Boeing Co.: $4.8

Thomson: $4.4

General Electric Co.: $4.3

United Technologies Corp.: $3.8

Sources: Defense News, Aerospace Industries Assn.