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High up in Manhattan's Graybar Building is a cozy room with a fireplace, bright red & green hunting prints and a volume of Burke's Landed Gentry. Like many a Big Business headquarters, it looks like the hideout of a country squire. This is the home of The Aviation Corp., once as fabulous a flyer in the realm of high finance as the Great Roc itself.
There, this week, amid the old leather and the bright brass, the biggest deal in aviation history was being completed; out of that roc's-egg deal would hatch the biggest aviation company in the world. Consolidated Vultee Aircraft Corp., controlled by Aviation Corp. (AVCO), was being merged with Lockheed Aircraft Corp.
This would make Lockheed a colossus with eight plants, some 44,000 employes, and a $500,000,000 backlog of orders. The deal had more than mere bigness. It was a shrewd move by both planemakers: their products would fit together like clasped hands. Among them were the shark-bodied Constellation; the fat-bellied Constitution; the six-engined XB-36, the "flying cigar"; the Shooting Star. There would be civilian models, from four-seater personal planes to 400-passenger transports; for the Army & Navy everything from "Flying Jeeps" to four-engined jet bombers.
Under the proposed deal, Lockheed would issue new stock, exchange it for that held by Convair stockholders at a ratio not yet determined, but likely to be about seven shares of Convair for six of Lockheed. On its part, AVCO is expected to trade its Convair stock (26%) for Convair's non-aviation interests, including ACF-Brill Motors Co. and its subsidiary, Hall-Scott Motors, and Consolidated's general manufacturing plant at Nashville. In short, Convair's stockholders would get a piece of Lockheed, and AVCO would get out of the planemaking business entirely. It had plenty of other irons in plenty of other fires.
Deals No. 2 & 3. AVCO was planning to take over completely three companies which it already controls: Crosley Corp. (refrigerators, radios, television and broadcasting stations), New Idea, Inc. (farm machinery) and American Central Manufacturing Corp. (jeep bodies, kitchen sinks & cabinets).
In a third deal, AVCO was planning to buy a large broadcasting station in the Midwest, add it to the present stations it owns, Cincinnati's WLW and New York's WINS. (This week FCC will be asked to approve the deal.)
It was a fast-dealing week for AVCO and a turning point in its short (17 years), fantastic, often odorous history. Germinated by the wild enthusiasm for anything with wings that followed Lindbergh's transatlantic flight, AVCO sprouted from gilt-edged seed (Lehman Brothers; Brown Bros., Harriman and Co., etc.) in March 1929, as a holding company for all branches of aviation. For a time it flew high, controlling 81 corporations. But soon it crashed into such a welter of squabbles, proxy fights and plain bad management that Wall Street quipped: "AVCO was begotten in sin and carried on in seduction." Not till 1937 did AVCO turn into an honest woman.