Fokker - Post Cold War Turbulence
In April 1993 a contract was signed, finalising the participation of Deutsche Aerospace (Dasa) in Fokker. Such move is a significant contribution to the rationalisation of the European Aerospace industry. Fokker will become the lead-company in Design, Engineering, Manufacturing, Sales and Support of aircraft in the 60-130 seat range. DASA had a 5l-percent share in the Dutch Fokker aircraft group. Fokker products included aircraft in the 50- to 58-seat twin-turboprop category to compete with similar products produced by France's Aerospatiale. According to DASA, this acquisition made it possible for the company to set up an internationally competitive European structure in regional aircraft manufacturing, in which it hoped to include Aerospatiale and other partners.
Certain types of mergers, such as diversifications, tend to yield poor results. Unfortunately, many other acquisitions and mergers yield mediocre results, and some are outright failures. Prominent examples include the Snapple acquisition in which Quaker Oats overpaid and synergies were impossible to find. Others include the failed Kroll-O'Gara merger or the various failed deals in the automobile industry, such as the BMW-Rover acquisition or the Daimler Benz acquisition of Fokker.
In response to the cyclical fluctuations of the aerospace business, a number of aerospace firms have pursued mergers, acquisitions, and other alliances to maintain or increase market share; reduce costs; broaden product scope; and share the risks of program development, manufacturing, and follow-on production activities to strengthen their position in the sector and improve their financial outlook. Other aerospace firms, such as Fokker, closed their doors or discontinued product lines during this turbulent period.
Fokker Aircraft, formerly a Deutsche Aerospace division of Daimler-Benz Aerospace, declared bankruptcy in March 1996. The trustees liquidated the company and no new Fokker jet aircraft were manufactured. Prior to the bankruptcy, the Fokker Aircraft company had three modern aircraft which were considered at the high capacity end of the regional jet spectrum, one of which, in its initial model, was one of the world's first successful jets used by US regional carriers.
In the 14 years leading up to its 1996 bankruptcy, Fokker developed simultaneously two new aircraft (the Fokker 50 and 100) to replace its aging F27 and F28 aircraft after a cooperative arrangement with McDonnell Douglas for the production of a 132- to 138-seat airliner was terminated in February 1982. The so-called twin-track decision proved pivotal to Fokker's closure by taxing an inadequate development process and overextended resources during a period of adverse market conditions. Cost overruns, program delays, and the unprofitability of the two aircraft gradually eroded Fokker's financial condition and led the company to pursue several foreign investors before eventually declaring bankruptcy.
Despite several attempts, Korea failed to find a suitable partner for its regional aircraft program. Samsung Aerospace's efforts in 1996 to invest up to $150 million to revive Fokker from bankruptcy and use the Dutch aircraft maker's proposed 130-seat aircraft program as a venue for its own ambitions in the regional jet market failed because of lack of support from the Korean Government and the decision of one of Fokker's suppliers to terminate wing production for the company's regional jets.
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