Mcdonnell Douglas To Join Hands With Tatas

The aerospace giant that produces military tactical aircraft like F-15, F/A-18 and missiles like Harpoon and Tomahawk, is joining hands with Tata Advanced Materials, in Bangalore for a possible joint venture.

McDonnell Douglass said the initial investment will be nearly $5 million, but did not give details on the equity participation in the joint venture. This is the first time that the Douglas Corporation is sourcing these materials outside the US.

Yes, wed have a stake (in it), but, we are still working out the details, Willard C Varner, McDonnell Douglas Corporation vice-president (commercial marketing) in India, said. The aerospace giant is also considering setting up of a marketing wing in the country some time next year, Varner said.

 

The US company is planning a training centre besides a spare parts set up in the country as part of its marketing efforts, he added. McDonnell Douglas would buy the entire products from the Indian company, under a buy-back arrangement with Tata Advanced Materials, he said.

We expect to manufacture about 100 pieces (of ARODMEs) a year, Varner said. Ruling out the marketing of these products in the domestic market, Varner said. Instead, they would be distributed for Douglas Corporations worldwide requirements, he added.

Tata Advanced Materials is involved in the manufacture of advanced materials like carbon filaments, carbon dust films and kevlar-based bullet-proof vests for defence and security purposes besides special protection materials for armoured vehicles for military use. The company also makes telecommunication equipment like reflective antennae for VSAT connectivity.

At present, McDonnell Douglas produces most of its equipment in the US. However, the aerospace giant which manufactures from commercial aircraft to military tactical aircraft, is turning to India now for production of sophisticated equipment. Similar tie-ups in other areas of aersopace industry with Indian companies in future could be possible, said the company.

McDonnell, which saw its global revenues slip from $17 billion in 1990 to the present $14 billion is working hard to sell its MD-11 version of long-haul commercial aircraft to Air India. The company is facing a stiff challenge from other giants in the aerospace industry like Boeing and Airbus Industries for this deal. We have submitted a proposal to Air India. MD-11 has salient features unlike Boeing 777 and Airbus 104, Kenneth G Best, vice-president (quality) McDonnell Corporation, said.

He said the offer included a 100 per cent financing option to Air India. Besides putting up a fight for long-haul models like MD-11, McDonnell is also wooing Indian Airlines and private airlines with its short-haul versions like MD-90 (150-seater with a range of 2,600 nautical miles) and MD-95 (100-seater with 1,500 nautical miles range). We have the greatest flexibility in models for Air Indias requirements. We can give better option, Varner said. While admitting fuel consumption was not a strong point with DC aircraft, he said in the long run, operating costs could considerably be lesser.

Boeing and Airbus aricraft, which have engines under the wings, faced higher threat from bird menace than DC aircraft, he said adding worldover, India ranks high in bird menace for aircraft.