RPAGF #520 - Roll up
#520 - Roll up
The news of Airbus's massive capacity expansion was not suppressed but directly conveyed to major airlines, reassuring major clients who had placed orders.
This news reached the other side of the ocean, and the North American aviation giants couldn't sit still, convening again for discussions.
"Gentlemen, Airbus's momentum is now unstoppable. How should we respond? If we don't come up with a solution for regional jets, the market will be dominated by Airbus's A300," Boeing's Vice President Hegel said first.
"If there isn't a new aircraft model with performance close to Airbus's, we'll have no chance in this niche market. Gentlemen, this is a crucial turning point for the North American aviation industry. If we don't respond with strong measures now, our position in the passenger aircraft industry will become increasingly passive," Douglas's Vice President Williams Martinez also expressed pessimism.
However, that wasn't their purpose today.
After they spoke, representatives from McDonnell and Lockheed Martin exchanged glances, remaining silent for a long while. They were already at a disadvantage in passenger aircraft. Although both were developing passenger planes, neither company's aircraft had entered the mainstream. While this situation increased the difficulty of their entry, their main market was in fighter jets, and the passenger aircraft market share hadn't yet affected their survival.
So, they were the least anxious.
They were waiting to see what Boeing and Douglas wanted to do.
Seeing that McDonnell and Lockheed Martin remained silent, creating an awkward silence, Boeing's Vice President Hegel had to speak up, "Gentlemen, the research and development of each passenger aircraft is a huge undertaking. From the current perspective, if we four companies continue to fight on our own and don't unite to cooperate in passenger aircraft, we may not be a match for Airbus's aggressive market offensive. But if we can unite and concentrate all our strength to research new models, our future will be very promising. We have strong capital and production capacity to meet the challenges of any opponent."
After Boeing's Vice President Hegel finished speaking, Tim, the Vice President of McDonnell, showed an incredible expression. Obviously, he hadn't considered this option beforehand. They were currently real market competitors in the domestic market, and domestic antitrust laws didn't support such blatant market monopolies. So, after a moment of silence, Tim, the Vice President of McDonnell, asked, "Sir, if we four companies unite to research passenger aircraft, how do we deal with antitrust laws? How do we allocate to ensure the interests of each company?"
"Given the huge pressure from Airbus and the special research and application situation of the aviation industry, there is no longer a situation where one company dominates after our merger. According to our prior communication with the business antitrust department, it is generally believed that the combination of the civil aviation industry does not constitute a monopoly."
"As for the cooperation model, we think Airbus's model is very good. We will adopt the cooperation method between Dongda and John's family, with the investment funds of the joint research and development company as the basis for the division of equity. In the future, dividends and passenger aircraft production capacity will be distributed according to this share ratio. Now, each of us has aircraft production lines. After appropriate adjustment and transformation, these production lines can be fully adapted to passenger aircraft production and fighter jets. In this way, each of us can protect our own interests."
Vice President Little Martin was too lazy to pretend. He had long lost much interest in this kind of pragmatic meeting.
In the final analysis, they are all trying to compete for dominance. Now that Lockheed does not have the ability to become a civil aviation industry hegemon, then participating in such things is not very meaningful.
"Mr. Martin, everything is negotiable. Please prioritize the overall situation of the North American aviation industry. Airbus in Europe is already putting immense pressure on us in the civil aviation sector. If we don't take action, in ten years, once their Airbus A300 deliveries are complete, the world's civil aviation will be filled with Airbus planes," Boeing's Vice President Hegel said with righteous indignation, elevating himself to the height of an aviation industry savior.
"Mr. Hegel, if you think we're so important, then the best outcome is for each company to hold twenty-five percent of the shares. It's not like Lockheed can't come up with the investment capital. Other than that, I don't think there's any special reason to consider influencing the ownership of the shares. Regarding the after-sales systems of Boeing and Douglas, we can conduct a reasonable acquisition of this after-sales system after establishing a joint civil aviation company. This way, the interests of Boeing and Douglas won't be harmed in the slightest. We will possess the strongest after-sales service system and research and development system on the planet. For our great cause of civil aviation development, this is the most reasonable approach," Vice President Little Martin retorted without any politeness.
"Only when our interests are highly aligned will our actions be coordinated and unified. I believe this is the best way for our North American aviation industry to unite. After uniting in this way, each of us will update and改造 our production lines. Based on the current production line situation, the investment required to update the equipment is estimated to be less than 2 billion US dollars. And Lockheed is willing to bear this production line改造 ourselves. I don't think McDonnell will have any objections, right?" Vice President Little Martin said.
Hearing Vice President Little Martin say this, Vice President Tim of McDonnell gave a flicker of eye, quickly chiming in, "McDonnell completely agrees with Mr. Martin's proposal. We believe this proposal is quite fair and is very beneficial for mobilizing the technical strength of the entire aviation industry to compete against Airbus. We must act in unison only under the condition of aligned interests. Otherwise, if McDonnell contributes a lot but doesn't receive any benefits, McDonnell's shareholders won't agree to such a plan either."
These two, with their back-and-forth remarks, immediately shattered the strategy that Boeing and Douglas had discussed beforehand. Seeing that the situation was not good, Vice President Williams Martinez quickly stood up, "Mr. Martin and Mr. Tim, please calm down. Let's first discuss the matter of the joint venture. Once this matter is settled, then we can discuss the allocation of shares. Let's do things one step at a time, to avoid pulling each other down and making it difficult to negotiate a result."
"Mr. Martinez, this is all one matter. We first finalize the shares, and then discuss the joint venture model. Then things will be very easy to carry out," Vice President Little Martin ignored Vice President Williams Martinez's attempt to smooth things over and delay the situation. In this kind of matter, there's absolutely no way to negotiate a cooperation without discussing the shares.
The four-party talks broke up unhappily.
Of course, this was also because McDonnell and Lockheed were completely unaware of the matter beforehand and were caught off guard by Boeing and Douglas.
However, after both sides reported to their boards of directors, the boards of directors of both companies basically agreed with the opinions of Vice President Little Martin and Vice President Tim, that there was nothing to discuss about the issue of shares, it should be split equally among the four companies. Otherwise, in subsequent production, dividends, and other aspects, the company would suffer great losses. Without reasonable shares, how can the production line capacity allocation of each company be guaranteed to be fair and just in the future? The current equal share ratio among the four companies means that no company can dominate the voting, which is the ideal structure for protecting everyone's interests.
In comparison, the cooperation progress between Dongda and Europe was much smoother. Soon, both parties turned President Robert and General Manager Chen Hanyuan's intentions into thick contracts and cooperation agreements. Several large infrastructure armies from Dongda gathered, carrying equipment and boarding more than a dozen giant ships of tens of thousands of tons, heading straight to Europe. They were to carry out civil engineering construction on the land designated by the other party.
At the same time, more than 100,000 students above the junior year, selected from industrial colleges and universities across the country, mostly entered Yandu Aviation Industry to begin their apprenticeships with masters, and a small number (thousands) were to go to Europe to learn the other party's engineering and manufacturing experience from factories on the European aviation industry chain.
The advantages of the national system are fully reflected in this situation. Large-scale selection and mobilization are orderly and rapid. Even if there are minor twists and turns in the middle, such as some people with ulterior motives hearing about this aviation feast and making small moves to insert their own people, no one can stop this major trend.
Dongda and Europe began large-scale infrastructure construction for the aviation industry.
On the North American side, after some bargaining among the four aviation giants, Douglas and McDonnell actually merged under the promotion of their behind-the-scenes shareholders!
In this way, the four North American giants became three!
Boeing, which originally hoped to secure its position as the leader, did not expect the situation to evolve in this way!
There was no possibility for them to merge with Lockheed, but the merger of McDonnell and Douglas forced Lockheed to find allies and merge with the second-tier Northrop Corporation to become Lockheed Northrop Corporation, further strengthening its own strength to avoid being merged by Boeing.
This is basically consistent with the evolution in the main world timeline, but it is much earlier in time.
This series of changes left the world aviation industry a little overwhelmed. After the reshuffle, the newly established McDonnell Douglas actually jumped to first place in terms of strength! Lockheed Martin and Boeing are now on par. Boeing, which achieved nothing, continued on its own, and Boeing had to independently promote the Boeing 727 three-engine narrow-body jet airliner plan.
McDonnell Douglas is pushing forward with the development of the DC-9. Inspired by the Airbus A300, they chose a twin-engine structure, still equipped with the Pratt \u0026 Whitney JT8D turbofan engine under development, while the three-engine DC-10 airliner entered the pre-research stage. They wanted to wait and see the progress of Boeing's 727 before deciding whether to truly launch it.
Boeing and McDonnell Douglas decided to draw a line with Rolls-Royce in this regard, firmly taking the North American priority technology route.
However, Lockheed Northrop, which was starting from scratch, weighed the pros and cons and decided to follow Boeing's 727 and choose a three-engine architecture, but surprisingly, they wanted to cooperate with Rolls-Royce on the engine, preparing to use the Rolls-Royce RB211 three-spool turbofan engine that Dongda was developing! However, the Super Constellation name was no longer used, and they decided to name this new airliner the L-1011 TriStar.