Douglas v. Lend-Lease

The flashiest earnings report of the year came out of California last week. Douglas Aircraft Co. earned a record $18,177,000 in 1941, 70% above the preceding year. Sales soared 197% to $180,940,000, also a record. The average U.S. manufacturer's 1941 profits were about 10% over 1940, sales about 35%. Even other big aircraft makers showed no such profit jump as Douglas.

Douglas could thank its foreign customers-largely Britain. Sales abroad last year accounted for 88% of profits v. only 6% for commercial business, another 6% for Army & Navy sales. Most U.S. aircraft export contracts were taken over by Lend-Lease, but not Douglas'. Its export contracts all contained heavy penalties for cancellation-Lend-Lease, war's end, or otherwise.

These lush contracts are running out, are only a "minute fraction" of Douglas' $800,000,000-plus backlog. Future profits will be made from sales to the U.S. Army & Navy, on which Douglas last year earned only 1.36%.

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