Cord Into Avco

Cord Into Avco

Among other big air transport operators the name of smart Errett Lobban Cord has been anything but hallowed. He established Century and Century Pacific Lines parallel to "pioneer" services. Equipping his lines with his own cheaply operated Stinson tri-motors, he forced fares down. In his efforts to get airmail contracts he persuaded many a Congressman that the Government pays too much money to have its mail flown. In no quarter was he less popular than with American Airways (operating subsidiary of Aviation Corp.) which went before the Arizona Corporation Commission to thwart his competition in the Southwest (TIME, March 14). Of the "independents" he was the most potent, the most aggressive. Last week Motormaker Cord ceased to be an independent. He sold his lines to his erstwhile enemy Aviation Corp. and prepared to take a seat on its directorate.

According to Avco, the company is paying Mr. Cord no cash and "less than 140,000 shares of stock" ($2 3/4 per share last week). Avco receives about 30 Stinson planes (all tri-motors except three or four) which have been flying between St. Louis, Chicago, Detroit, Toledo and Cleveland; between El Paso and Los Angeles; and between Sacramento, San Francisco, Los Angeles and San Diego. Also it receives Century's new hangar and shop at Chicago Municipal Airport, valued at $130,000.

The largest part of Century's lines (Los Angeles-El Paso, Chicago-St.Louis) is already covered by American Airways which will discontinue the Century operations as soon as contracts are fulfilled and state utility bodies grant permission. The Century lines east of Chicago will also be erased by American Airways, which withdrew long ago from that highly competitive section. But the western coastwise service will be retained, to join American's southern transcontinental line at Los Angeles. Total new mileage acquired: 553. By accepting an Avco directorship, Motormaker Cord agrees not to engage in other air transport operations for two years. But he sees his position as a manufacturer materially strengthened. Although Avco denied that it was bound in any way to buy more transports from Cord's Stinson factory, Mr. Cord was confident that airmail contractors as a class would be willing to buy from him, now that he is no longer the industry's Bad Boy.

From Mr. Cord Avco also took over a labor problem. Last winter he reduced pilots' wages, came into conflict with the Airline Pilots Association, affiliated with the A. F. of L. (TIME, Feb. 22). The 23 pilots of Century Air Lines quit (they charged a "lock-out") and service was interrupted until a "strikebreaking" crew was trained. By the sale to Avco a complete operating personnel of 350 is thrown out of work. Last week, in his apartment in the tower of Manhattan's swank Waldorf-Astoria, Mr. Cord intimated that the pilots (about 50 including Century Pacific's) would be "taken care of" with "perhaps several months' pay."

Other administrative changes in Avco have followed the election of La Motte Turck Cohu to the presidency. He was also made president of American Airways. And to succeed Vice President Hainer Hinshaw of American Airways was elected Col. Edward Vernon Rickenbacker. Also made a vice president was Avco's able little publicist, Silliman Evans.

To take the American Airways job, Col. Rickenbacker resigned the vice-presidency of General Aviation Corp. (General Motors affiliate) in which his prime job had been to sell Fokker planes. (Since the withdrawal of stormy "Tony"' Fokker, General has quit building the Fokker line.) Hainer Hinshaw had headquarters in Washington where he was one of aviation's most potent lobbyists. He has joined United Air Lines. Vice President Ricken-backer's headquarters will be in Manhattan but his duties may take him frequently to the Capital.

With Cord off the scene, Ludington Lines remains the biggest of the independents. Conversations concerning the absorption of Ludington by "pioneer" Eastern Air Transport last week had led nowhere.

In the past fortnight four big aviation companies reported earnings as follows:

1931 1930

Aviation Corp. $3,205,600 (loss) $4,703,600 (loss)

United Aircraft & Transport 2,907,500 3,302,200

Curtiss-Writght 4,126,000 (loss) 9,012,900 (loss)

Pan-American Airways 105,400 305,200 (loss)

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