It’s hard to imagine today, but there was once a time when many of those involved in the automobile industry owned a number of the nation’s aircraft manufacturers — and airlines. While hubris today is little different from hubris 90 years ago, it’s safe to say that the airline industry might have been delayed by decades had it not been for the foresight of Detroit’s leaders and later of a government determined to make them give up their stratospheric dreams.
Even today, large concrete arrows still protrude from the ground across the country, decades after most have forgotten why they were ever made. In fact, they were among the first navigation aids for pilots flying the mail east and west.
Often a pilot knew what town or city he was approaching only because Henry Ford had ordered all his dealers to paint their towns’ names on their dealership rooftops. While that worked fairly well in the few years after the Great War, it was not a long-term solution to navigating the nation’s airways. Before long Henry Ford’s engineers created the first radio beacon system for aircraft navigation. His radio engineer, Eugene Donovan, patented the beacon transmitter in 1928, and the following year the USPS quit making those big concrete arrows to point airmail pilots on their way.
Certainly, Ford built the first great aircraft used for airline service, his famed Tri-Motor, although fewer than 200 of them were built in the late 1920s. The start of the Great Depression, along with serious issues with the successor to Ford’s Tri-motor, ended any real hope the Ford Motor Company had of staying in aircraft manufacturing.
But Henry’s son Edsel was more excited about the long-term promise of commercial aviation. That’s why he invested, along with Ransom Olds and other automotive giants, in the Detroit Aircraft Company; these gentlemen envisioned it becoming the General Motors of commercial airplane manufacturing. That dream failed quickly, also because of the Great Depression; but one key manufacturer saved from the bankruptcy, Lockheed, is still making planes today.
By the late 1920s E.L. Cord, owner of the Cord and Auburn Motor Companies, created a holding company that controlled over 150 other corporations, including Stinson Aircraft, Lycoming engines and American Airways — now American Airlines.
Fast Eddie, the Ace
Maybe the biggest long-term player, who drifted from autos to aviation fame, back to autos and then to aviation fame again, was Eddie Rickenbacker.
One column years ago told the story of how Rickenbacker’s father was killed on a construction job while Eddie was in 7th grade, forcing him to drop out of school and work full time to help provide for his widowed mother and his other siblings. (Other stories claim his father was killed after a bar fight one night.) At 14 years old, Eddie Rickenbacker was working a 74-hour week for a miserable $3.50 — and yet he still managed to take a correspondence course in engineering to better his education. For that matter, GM’s in-house genius, Charles Kettering (who invented automobile self-starters), was once a lineman for a utility company and he also studied engineering by mail. Many of the men who built America started out poorly educated and learned their vocations the hard way.
At 18 Eddie Rickenbacker, now working for an automobile manufacturer, was assigned to Fife and Miller, one of the earliest car dealerships in Dallas. They had ordered a number of Firestone-Columbus cars, only to find out they overheated and simply seized up in the hot Texas sun. Rickenbacker was the company’s young hotshot problem solver; and he quickly became their best car salesman in Dallas too.
He solved the overheating problem accidentally. He poured some cool water out of a stock tank into an overheated Firestone-Columbus engine, and it was just cool enough to shock and “set” the hot cylinders a bit smaller, thereby allowing them to function properly and without further problems.
One can still see Eddie Rickenbacker’s demonstration route today; he took the dealership’s clients out to drive up Chalk Hill, just west of downtown Dallas, and prove how powerful those vehicles were. His pay was increased to $125 a month, which was substantial for anyone in America in 1908, much less a skinny, towheaded teen.
All about that race: www.star-telegram.com/cars/ed-wallace
Three years later Rickenbacker raced in the first Indy 500; he proved himself fearless on the race track for several years before signing up in the Great War, hoping to fly for the Allied Forces. And fly he did: Racking up 26 kills in short order, he became our greatest fighter ace of that conflict.
Back home as America’s most famous aviator — everyone forgetting that he started as a car salesman in Dallas — Capt. Eddie turned down movie offers and other such high-paying gigs, designed simply to use his fame. Instead, in 1920 he joined with a couple of engineers to create the Rickenbacker Motor Company. It was the first car built with four-wheel braking; and the ad campaign’s slogan was, “The only car worthy of his name.”
Rickenbacker might have been just a bit egocentric.
Well, his car may have been really high tech, but it was really high priced, too. Bad timing: Americans were flocking to dealerships and purchasing their first cars — just not many expensive Rickenbackers. The company failed in 1925 and forced Rickenbacker into bankruptcy. But, along the way, General Motors had come calling. GM first gave him the distribution rights for its soon-to-fail Sheridan car line in California, then hired him to market the LaSalle.
The Netherlands’ Fokker Aircraft
Now, the world’s most successful aircraft manufacturer in the 1920s may well have been the Fokker Aircraft Company of the Netherlands. In fact, Fokker’s F-10, looking a great deal like the Ford Tri-Motor but with wood laminate wings, was used by 54 airlines worldwide. More than that, Anthony Fokker had moved to America in 1923 to start a U.S. branch of his aircraft company. General Motors purchased it in 1930 and quickly merged it into another GM division, North American Aviation, which Eddie Rickenbacker had convinced GM CEO Alfred Sloan was a wise investment. NAA also controlled Eastern Air Transport, later to become Eastern Airlines.
In 1931, however, tired of being someone else’s employee, Anthony Fokker resigned from his position at GM. That was just as well, since that same year a Fokker F-10 crashed in Kansas, killing the famed and beloved Notre Dame football coach, Knute Rockne. (At the time, The Gipper was working for the Studebaker car company.) Turned out the problem was moisture weakening those wood laminate wings, and as a result most airlines left that aircraft during the Depression for all-metal monoplanes. Fokker would carry on in Europe manufacturing aircraft and, in time, satellites.
In 1992 Fokker was purchased by DASA, owned by Daimler Benz, with Daimler’s Juergen Schrempp driving the acquisition. Four years later its losses were so great that DASA took the company into bankruptcy and sold off the parts, for fear the losses would take down all of Daimler Benz. For his brilliance in buying an aircraft company that was literally flying itself into the ground, Schrempp was made CEO of Daimler and — having learned no lessons from his Fokker debacle — immediately purchased Chrysler.
Meanwhile, Back at the Liberty League
Let’s get back to General Motors, North American Aviation and Eddie Rickenbacker in the Great Depression. Then as now, the United States government managed to use taxpayer money to fund what politicians believed would be segments critical to our country’s economic development; among them was our fledgling airline industry. They put up monies to build airfields to encourage the airline and air freight business, and the government’s contracts to carry the mail often made the critical financial difference in an airline’s life or death.
The controlling interest in General Motors in those days was held by the DuPont family; Pierre DuPont had been GM’s chairman during the era in which it became the most powerful corporation in the world. And it was the DuPonts, GM’s Alfred Sloan, and other hugely successful titans of industry who formed the American Liberty League in the Depression, to try to stop the government’s leftward swing under Roosevelt.
Eddie Rickenbacker was as hardcore a conservative as one could find in that generation, but that is often the political outlook of men of great accomplishments. That summed up Rickenbacker: Nearly killed three or four times in his lifetime, he wasn’t really educated but taught himself engineering; he was a world-class car salesman, famed auto racer, and our top ace in the Great War; and, although his car company failed and was forced into bankruptcy, he just kept coming back, doing bigger and greater things.
But when Roosevelt took the mail contract away from our struggling airlines and handed it to the United States Army Air Corps, Rickenbacker told the media that was akin to government murder, because Army pilots weren’t skilled enough to handle that job. He was right. So many Army pilots died trying to deliver the mail that the government quickly reversed itself.
Capt. Eddie, GM, DuPont, and the American Liberty League were doing everything they could to shut down what they saw as a government moving in the direction of Socialism. Yet their biggest, loudest complaint was their demand for corporate Socialism for themselves — the monies they made off the mail contracts.
Eventually, Washington decided that the only way real competition and growth could come to American industry was if aircraft manufacturers could not own airlines and General Motors divested its portfolio of divisions such as Eastern Airlines. In April of 1938 Eddie Rickenbacker heard the rumor that Alfred Sloan was going to sell Eastern to John Hertz for three million dollars. Rickenbacker went out and managed to raise $3.5 million before Hertz could, and Eastern was his.
For many years Rickenbacker’s Eastern was the most profitable airline in the country. But, in the end, it was also Eddie Rickenbacker who sowed the seeds of Eastern’s destruction in the late Fifties. He refused to get into the jet age, believing that it was not a cost-efficient business decision. That made as much sense as if someone had decided to stick with biplanes with fabric wings 30 years earlier, when the first all-metal monoplanes remade the airline industry.
Before the Sixties got started Eddie Rickenbacker was forced to resign as Eastern Airlines’ CEO and closed his chairmanship on the last day of 1963. But by then the entire world had changed. The Baby Boomers, the first of whom turned 18 that year, saw the world in color instead of black and white, and they wanted cars that were slick and low-slung and had huge V-8 engines. Although many airlines still use turbo props, most airlines’ fleets had become mainly jets by then.
It was 1967, in the Boomers’ so-called Summer of Love, when Eddie Rickenbacker published his autobiography. But few wanted to hear the stories of some former Dallas car salesman who’d flown slow, primitive airplanes in a war a half century earlier. That’s why most don’t realize that, without our auto industry, our airline industry might not have cranked up until much later. And without the government’s first intervening to help create it, then forcing automakers to divest of those operations, things might have been very different indeed.
© Ed Wallace 2017
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA, and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. Email: firstname.lastname@example.org