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Said Odlum to himself: Since I cannot beat the ticker tape with the $37,000,000 I have in the market, why shouldn't I let it go to somebody who has a use for it? Why shouldn't I stick to the $25,000,000 of "special situation" money that I can handle profitably?
On Feb. 5, he returned to Manhattan. Last week he announced that Atlas would split, like a cell, into two parts—one to stay with him in the money business, the other to be grafted to the lusty body of U. S. aircraft's Curtiss-Wright Corp.
Wall Street's first reaction was: Odlum has moved again! Its second: Has he turned away from his old hunting grounds (bankrupt utilities, movie companies, stores), moved into the aircraft business —the field in which Wife No. 2 is interested. Friends of the Curtiss-Wright management offered to raise a pool to defend the company against Odlum's raid. Guy Vaughan, president of Curtiss, cooled them off. He told them the smartest thing he had ever done was to get his friend Floyd Odlum on the Curtiss-Wright board.
Curtiss Quandary. As Odlum's problem was to get rid of capital he couldn't use, the main Curtiss-Wright problem has been to get new capital. Like other U. S. aircraft companies, it has grown from small beginnings by ploughing earnings back into new plant capacity. Now its biggest problem is to fill $140,000,000 of new orders quickly and profitably, to find means of taking a great many more new orders which could be bagged by any company with the right product and idle capacity. For three reasons Curtiss-Wright has been unable to raise capital in the usual ways: 1) its common stockholders have had no dividends on Curtiss' recent sales boom; 2) ahead of the common's claim to future dividends is Curtiss-Wright "A" stock, which is entitled to $2 a share (no more) before any dividends are declared on the common; 3) bond financing would be dangerous for a company like Curtiss-Wright, whose earnings to meet fixed charges might be suddenly cut by such unpredictables as sudden peace or losses on new models.
For six months Guy Vaughan and Curtiss' 14 other directors tried to solve the problem by finding a way to get rid of the "A" stock. This has been selling around $30 but, since it is redeemable at $40, the company could not afford to retire it. First sub-committees of the board were formed to work on the problem. Then, in despair, each director was told to tackle it as a committee of one.
Last February the committee named Odlum returned from the desert with its mind made up. At a Curtiss-Wright meeting one day, Odlum asked whether the other 14 committees had a solution. They hadn't. He asked for a day, returned with a description of a hypothetical "X Corporation," told how a marriage with hail of "X Corporation" would solve Curtiss' problem. The directors agreed, but they did not tumble until Odlum spelled out the name of "X Corporation": ATLAS.