Research Paper on:
Merger Between McDonnell Douglas and Boeing

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the two CEOs of the companies met personally. This particular merger had been discussed by groups of lawyers and executives a number of times over the previous three years but  the groups were never able to settle on the price (Whitford, 1997). This merger demonstrates what can happen when two decisive individuals sit down alone. Finally, because of the industry,  this merger had to be approved on an international level. In 1996, Boeing had 120,000 employees and annual revenues in excess of $19.5 billion (Rochelle, 1996). It is headquartered  in Seattle/Puget Sound area in Washington state (Rochelle, 1996). The company was established in 1916 and was among the top three exporters in the United States (Rochelle, 1996). McDonnell Douglas  was created in 1967 when McDonnell Company merged with Douglas Aircraft (Rochelle, 1996). The company had 63,000 employees and falling revenues (Rochelle, 1996). The company has their headquarters in St.  Louis but they also had major facilities in Mesa, Arizona and Long Beach and Huntington Beach in California (Rochelle, 1996). This merger was driven by global forces, the changes in  the defense industry, changing economics, and consolidation. It was really a brilliantly strategic merger of two complementary corporations. Both companies were trying to find a better way to position themselves  in the global economy. This merger accomplished the goal. Boeing had experienced the same deep cuts in defense spending as all other companies but the secular side of the business  was growing (Whitford, 1997). The commercial side, however, tends to experience long-term trends and severe cyclical swings (Whitford, 1997). Boeings revenues were out of balance - 80 percent of the  companys business was commercial and 20 percent was defense and space (Whitford, 1997). Since the commercial side tends to be cyclical, Boeing did not have enough of a cushion. In