On a Dour Note

During the war, Planemaker Donald Douglas half-seriously announced a grim postwar plan: "Shut the damned shop up" (TIME, Nov. 22, 1943). In Los Angeles last week able, dour Donald Douglas, still in business, told his 8,763 stockholders that the Douglas Aircraft Co., Inc.: 1) had made a profit of $8,900,000 in 1945; 2) had a backlog of $219,000,000 in military and commercial orders; 3) could expect no profits in 1946.

Paradoxically, the Douglas profit picture looked dim because the future of aviation was so bright. Aviation is making such tremendous strides that new planes often become obsolete before they get into mass production. Thus the tremendous costs of experimentation and development of new models can no longer be charged off over a long period of production and sales. Starting this year, Douglas will charge all such expenses off as current costs.

Under this sense-making accounting plan, 1946 profits will probably be eaten up by the $7,000,000 which Douglas expects to spend to develop the DC-8 "Mix-master." To make matters worse, in Donald Douglas' characteristically gloomy view, no one has yet ordered any Mix-masters. Stockholders were not so worried: solid, conservative Douglas Aircraft Co. spends no big money without getting a good airplane to sell.

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