Mr. Mac Tries Again

Beset by financial woes, California's pioneering Douglas Aircraft Co. last week was 1) negotiating with eight banks for a loan of about $100 million, some $56 million of which the company hopes to have underwritten by the Defense Department, 2) understood to be seeking $175 million more, for a total of $275 million in financing, and 3) taking evasive action from what appears to be a strong takeover effort by the McDonnell Co. of St. Louis.

Although such a move has been rumored for weeks, confirmation of a sizable McDonnell holding of Douglas common stock surprised both Wall Street and Washington. Until early this year, the McDonnell Co. controlled 58,726 shares in Douglas. This block of stock plus Chairman James S. McDonnell's private holdings were all that remained of McDonnell's abortive 1963 effort toward a merger of the two companies. At the time, Douglas turned "Mr. Mac" down cold.

Unloading at the Right Time. In June, McDonnell gave notice that it had sold its Douglas common during the first quarter of 1966, around the time that it reached its peak of 112, reaped a net profit of $2,600,000. But by last week, after the stock had nosedived to 30, then looped back up past 40, sources close to both companies estimated that Mr. Mac and closely associated "interests" had between them amassed 800,000 Douglas shares out of 5,200,000 outstanding. Reportedly, McDonnell himself now owns between 200,000 and 300,000--at least 20 times more than those owned by Chairman Donald W. Douglas, 74, and President Donald W. Douglas Jr., 49, who also unloaded most of their Douglas common early this year. At week's end, Douglas common climbed to 46, and there was talk about an imminent tender offer that would give McDonnell undisputed control.

Cowling-Deep in Red Ink. A merger at this time, some observers feel, might be the best thing that could happen to Douglas. Ironically, nothing has failed the company so much as success. Swamped with a $3 billion backlog of orders, Douglas has burned up its financial resources attempting to accelerate production. In September, the company reported nine-month losses of $16.4 million. And despite a record November output of twelve commercial jet transports worth $38 million, Douglas is four months behind in its delivery dates, slipping further because of continuing shortages of skilled aircraft workers and a lag in deliveries of jet engines and other items from outside suppliers. The marriage Mr. Mac pines for would neatly couple Douglas' essentially commercial output with a McDonnell product line that is mostly military, under a McDonnell management team that is highly regarded throughout the industry.

This file is automatically generated by a robot program, so reader's discretion is required.