Is it really the case that Douglas's two most successful jet airliners were loss makers? Is this by the real books, or is it Hollywood accounting
FlightlessParrot, according to the book you might say perhaps Hollywood accounting. When Douglas management was taken over by Douglas Jr., after the Sr. retired, he introduced the policy of not showing development costs as current expenditure, to be written off gradually and in harmony with receipts. Rolls Royce and Lockheed did the same. Boeing on the other hand absorbed developmental costs as they arose. The result for Douglas was they were facing bankruptcy within a year had McDonnell not pulled them out of the mire by taking Douglas over.
Adding to Douglas cost was the production of too many models of the -8 and -9, which resulted in confusion and production delays, the 9 was selling faster than they could build them, with delivery schedules falling apart as a result, airlines sued successfully for the late deliveries, and to top it all off, the Vietnam war created a shortage of parts and skilled labour. All the time they were struggling financially and the large cash flow created by the 9 did not cover the cost of building them.