Trouble Ahead

The voice was familiar but the words sounded strange. Planemaker Donald Douglas, who has often spoken like a prophet of gloom, was making noises like an optimist. Said he last week: "Long-range prospects in the airline and aircraft manufacturing industries are excellent." Looking at his own business, Donald Douglas had reason to be cheerful. His Douglas Aircraft Co., Inc. had abandoned its plans to build the DC-7 Globemaster and the DC-8 Mixmaster. But it had started delivering its 52-passenger, four-motored DC-6, had orders for some $200 million worth of commercial and military planes, and had made over $3 million for the first nine months of 1946. This week Douglas unveiled its latest hope for profits, a two-engine, five-place, 200-mile-an-hour executive plane.

Conservative Glenn L. Martin agreed with Douglas that things looked good. Martin had orders for 350 of his new two-engine transports (2023 and 3033). The prototype of the 202 was already test-flying. If it turned out well, then Martin had plenty to do. His orders totaled $201 million. Martin was also planning to open a new $3,500,000 plastics plant soon. Said Martin happily: "1947 will be the busiest peacetime year in our history."

But other planemakers were not so happy. Robert Gross, president of the Lockheed Aircraft Corp., announced that his company would show an operating loss this year. Reason: suppliers' strikes, troubles with Constellation production. Because of this and a "diminishing market outlook," Lockheed was abandoning its Saturn feeder plane, on which it had spent some $6 million. Despite a backlog of $156 million, Lockheed expected to cut back in 1948.

Seattle's Boeing Airplane Co. last week rolled out the first of ten stratofreighters for the U.S. Army. It proudly announced that it had $200 million in orders for military and commercial planes. But Boeing had been forced to scrap its plans for a two-engine transport, had lost over $1 million in the first half of 1946.

Consolidated Vultee Aircraft Corp. had $348 million in orders, expected to take two years to fill them. But Convair, strikebound for some three months during the year, reported a deficit of $1.8 million for the first nine months after applying a carryback tax credit of $4 million. Also losing money was Republic Aviation Corp., which had 26 firm orders for its Rainbow but did not expect to start deliveries until late in 1947.

Whether makers of big planes would continue to lose money depended mostly on their Government orders. The Army & Navy hoped to spend some $250 million on research and development in 1947. But planemakers feared that an economy-minded Congress might force the services to cancel those plans, along with a large part of their $679 million worth of orders for new planes already placed. Said one discouraged airman: "When Don Douglas starts saying things are going to be rosy you can bet there's going to be trouble."

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