He left in 1938 to try again with his own firm, McDonnell Aircraft Corporation, based at St. Louis, Missouri in 1939.[3]World War II was a major boost to the new company. It grew from 15 employees in 1939 to 5,000 at the end of the war and became a significant aircraft parts producer, and developed the XP-67 Bat fighter prototype.[4] McDonnell also developed the LBD-1 Gargoyleguided missile.[5] McDonnell Aircraft suffered after the war with an end of government orders and a surplus of aircraft, and heavily cut its workforce. The advent of the Korean War helped push McDonnell into a major military fighter supply role.
An FH-1 Phantom in 1948
In 1943, McDonnell began developing jets when they were invited to bid in a US Navy contest and eventually built the successful FH-1 Phantom in the postwar era. The Phantom introduced McDonnell's telltale design with engines placed forward under the fuselage and exiting just behind the wing, a layout that was used successfully on the F2H Banshee, F3H Demon, and the F-101 Voodoo. David S. Lewis joined the company as Chief of Aerodynamics in 1946. He led the development of the legendary F-4 Phantom II in 1954, which was introduced into service in 1960. Lewis became Executive Vice President in 1958, and finally became President and Chief Operating Officer in 1962.
McDonnell made a number of missiles, including the pioneering Gargoyle and unusual ADM-20 Quail, as well as experimenting with hypersonic flight, research that enabled them to gain a substantial share of the NASA projects Mercury and Gemini. The success of the Mercury capsule led the company adopted a new logo features the capsule circling a globe with the motto "First Free Man in Space".[1] The company was now a major employer, but was having problems. It had almost no civilian business, and was thus vulnerable to any peacetime downturn in procurement.
Meanwhile, Douglas Aircraft was reeling from cash flow problems and development costs. It was also having a hard time meeting demand. The two companies began sounding each other out about a merger in 1963. On paper, they were a good match. Douglas' civilian business would have been more than enough to allow McDonnell to withstand any downturns in military procurement, while the cash flow from McDonnell's military contracts would have given Douglas badly-needed security. Douglas formally accepted McDonnell's offer in December 1966, and the two firms officially merged on April 28, 1967, as the McDonnell Douglas Corporation (MDC). Soon after the merger was announced, McDonnell bought 1.5 million shares of Douglas stock to help Douglas meet "immediate financial requirements".[6] McDonnell management dominated the merged company. It was based at McDonnell's facility in St. Louis, with James McDonnell as chairman and CEO.[7] In 1967, with the merger of McDonnell and Douglas Aircraft, David Lewis, then president of McDonnell, was named chairman of what was called the Douglas Aircraft Division. After managing the turnaround of the division, he returned to St. Louis in 1969 as president of McDonnell Douglas.
