Dutch Treat

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Fokker's challenge to Boeing

When it comes to flying high, few businessmen can measure up to Frans Swarttouw, 49, of The Netherlands. Having built Rotterdam's containership terminal into a key operation of the world's biggest and busiest deepwater port, Swarttouw took command three years ago of Holland's weak and floundering Fokker aircraft company and promptly set about developing a strategy to propel it into the front ranks of the world's airframe manufacturers.

Last week in Amsterdam, Swarttouw announced that Fokker (1980 sales: $450 million) and McDonnell Douglas Corp. of St. Louis (1980 sales: $6.06 billion) were preparing to link up and build a Fokker-designed 150-seat, medium-range passenger jet. The companies hope the plane will grab a share of the emerging new replacement market for the McDonnell Douglas DC-9, the Boeing 737 and the Boeing 727, the aging workhorse of airlines from Singapore to Stockholm.

Analysts estimate the replacement market to be worth $55 billion, yet neither Fokker nor McDonnell Douglas alone has the $1 billion-plus in development costs for such a plane from the wheels up. Fokker, though, has done extensive work on exactly the sort of brand-new fuel-efficient, medium-range jet the market requires. The new venture will be a giant gamble, but Swarttouw calmly says, "There are two ways to go broke. Do nothing, or do something."

Boeing and Lockheed both expressed interest in Fokker's designs, but Lockheed lacked sufficient funds to go ahead with the project, while Boeing proposed a deal that would have relegated Fokker to the role of a subcontractor. In McDonnell Douglas, Swarttouw found a perfect fit. The deal was finally cut during three months of secret meetings earlier this year, many of them taking place in hotel rooms booked under the name of a nonexistent corporation called Pegasus Inc.

Other airframe makers are also eager to grab a piece of the replacement market. Yet not even Boeing, which has manufactured 55% of all commercial planes now in service in the non-Communist world, can afford the escalating prices of building a replacement aircraft. As a result, the company is discussing plans with potential Japanese partners to help pay the development costs. But last week Swarttouw was also in Japan looking for another partner.