Hupp Up

For the six months ending June 30 Hupp Motor Car Corp. last week reported a net loss of $349,966 against a net loss of $479,551 for the first half of 1936. In a year of booming automobile sales this reduction by itself might appear small comfort to an old and long stagnant motor-maker. But the true state of Hupp was discernible last week not in its profit & loss account but in the balance sheet and in its big plant off Detroit's East Grand Boulevard. In both of these stagnation lurked no longer.

When ingenious Promoter Archie Moulton Andrews was finally thrown out of the Hupp management (TIME, Nov. 4, 1935), he left the company's affairs at a lower ebb than they had ever been since young Robert Hupp sat up all one cold night to assemble his first show model in 1908. From $52,500,000 in 1929, Hupp sales had dropped to $6,118,000 in 1933 and recovered only to $6,868,000 in 1935. Depressed by Hupp's million-dollar losses and by Archie Andrews' merchandising schemes, parts supply companies were refusing to extend credit. In January 1936. Hupp 's new board of directors stopped manufacturing Hupmobiles.

They might never have started again had it not been for an aggressive 42-year old Hupp executive named Thomas Bradley. As director of purchases for the company since 1934, bristle-topped, freckled Mr. Bradley had an inside view of the effect of Andrews' cavalier administration. Having been a vice-president and director of the old Paige-Detroit Motor Car Co. and a director of its successor, Graham Paige, he also knew a great deal about the independent automobile business. In the spring of 1936 Bradley took counsel with Hupp's director of sales and chief engineer, drew up an analysis of the company which he put before the directors in June. Gist of it was that with Hupmobile's reputation still high among car-owners* all Hupp needed was working capital and a new car. The company had no funded debt, and drastic write-downs on machinery and equipment made its overheac the lowest in the industry. Brightened by Mr. Bradley's analysis, the directors elected him to succeed President Wallace Zwiener, who died a year ago. The company then dropped a previous proposal to issue some $570,000 worth of stock, adopted a more ambitious plan. Approved by Hupp stockholders last April this provided for a reduction in par value of the outstanding common stock from $10 to $1 a share, exchange of stock on a one for two basis, sale of 988,971 new shares at $3 a share. Marketed through a syndicate headed by F. S. Yantis & Co. of Chicago, these netted the company $2,690,000 last June. Thus Hupp acquired enough cash to start manufacturing. President Bradley immediately ended the 18- month shutdown by resuming production of old type cars for export.

During Hupp's long night its engineering staff stayed on at the closed plant, hopefully working out a new model for production if and when. During the last two months about 450 workers, many of them old Hupp men, have been hired to get the plant ready for full production. This week the new Hupmobile comes off the assembly line in two models, a six, selling for under $1,000 and an eight, listed at around $1,200. President Bradey, whose vacationing this summer has been limited to Sundays with his family in their Ontario cottage, figures that if only 7% of Hupp's faithful owners buy the new car the company will break even on a production of about 1,500 cars a month. A strike is the last thing he looks for from Hupp's prospective 1,200 workers, believing that unionized or not they will "stick with us and help get Hupp going."

*A Bradley survey showed that of 207,000 Hupmobiles licensed in the U. S., 57 % were still being driven by their original owners, that 78% of Hupmobile owners wanted to "stick to Hupp."

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