Superiority in the '70s

Because it is intended primarily to knock down other jets, notably the agile Soviet MIG-23, the Air Force calls its forthcoming F-15 an "air superiority" fighter. The designation is doubly meaningful to U.S. aircraft firms. They are finding that big Pentagon contracts, once frequent, are becoming frustratingly scarce. Thus, when the McDonnell Douglas Co. of St. Louis finally won the F-15 award over two competitors last week, it was a considerable coup for the No. 1 firm in the industry since the 1967 merger of McDonnell Co. and Douglas Aircraft. The contract calls for design and production of an initial 20 planes at a cost of $ 1.15 billion not including the cost of the engines, for which a contract has not yet been awarded. But the total order could easily swell by 1975 to some 700 planes and $8 billion. At an average price of $13.5 million per plane, by one estimate, the F-15 would be the costliest fighter in U.S. history.

The award means that McDonnell Douglas will retain the mix of civilian-military sales that have helped make it the nation's most profitable aerospace firm (1968 earnings: $95 million, on revenues of $3.6 billion). Deliveries of Douglas' DC-8 and DC-9 airliners entered a decline this year, and production of McDonnell's phenomenal F-4 Phantom, still the U.S.'s most versatile combat plane, has passed its peak as well. The new business should rebuild the company's backlog, which now stands at $2.6 billion. Still, profits may decline for the next year or so until deliveries of the new DC-10 tri-jet begin in 1971.

The losers in the F-15 race suffered a severe blow. Maryland-based Fairchild Hiller Co. (1968 sales: $244 million) saw its hopes of suddenly becoming a major aerospace firm dashed. Bigger North American Rockwell ($2.6 billion) badly needs new business to offset declines in its Apollo program work. The company spent $25 million on its bid, but now layoffs are in prospect.

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