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Convair: The Rise and Fall of an Aerospace Titan - Part 2
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Convair: The Rise and Fall of an Aerospace Titan - Part 2

General Dynamics Acquires Convair; Gambling with Howard Hughes; and Winning the Cold War and its Aftereffects

Welcome to Episode 18.

In this episode, Doug picks up the story from where we left off in Part 1: its November 1941, when Consolidated Aircraft founder Reuben Fleet decides to sell his personal stake in the company. Doug then shares how Consolidated became Convair, was then acquired by General Dynamics, its disastrous foray into the commercial jetliner market, and its eventual demise in the mid-1990s.


In This Episode

  • (01:26) Reuben Fleet and his decision to sell Consolidated Aircraft.

    • (03:43) Fleet sells his entire personal stake in 1941.

    • (07:53) In 1943, Consolidated merges with Vultee Aircraft and becomes Convair.

    • (09:51) Reasons behind the sale.

  • (13:01) Rapid growth and decline of the aviation industry during and after World War II.

  • (14:50) Floyd Odlum and Atlas Corporation acquire a significant stake in Convair.

  • (16:04) Convair’s success in the 1950s.

    • (17:40) The B-36 bomber's development during World War II and its features, including its long-range capabilities and large crew, are described.

  • (20:01) General Dynamics acquires Convair in a two-step process.

  • (25:56) Convair gambles with Howard Hughes and the development of the Convair 880 jetliner.

    • Hughes runs into financial trouble and causes delays.

    • Convair eventually declares the largest losses in business history in the early 1960s due to its failed efforts in the commercial jetliner business.

  • (37:51) Henry Crown takes charge of General Dynamics to address losses from the Convair program.

  • (38:35) Convair shifts focus and becomes a subcontractor for the big commercial jetliners and also concentrates on its rocket and missile businesses.

  • (39:56) The defense industry consolidation in the post-Cold War era.

  • (42:21) General Dynamics sells off pieces of its Convair business and eventually shuts it all down.

  • (53:06) Reflection on Convair’s decline.

  • (57:42) The difficulty for defense companies trying to venture into the commercial space.

  • (65:14) Upcoming episodes.


1943, the year in which AVCO’s Vultee Aircraft merged with Consolidated Aircraft to become Convair
1951 TIME magazine advertisement for the B-36 bomber
Convair’s B-36 long range bomber, unofficially named “Peacemaker”
Photo of Jay Hopkins (circa 1950s), Chairman and leader of General Dynamics, the “financial genius” who transformed Electric Boat.
Artwork of Convair 880 jetliner from the July 1957 magazine Convair Traveler
Convair ad in the August 22, 1958, edition of Aviation Week magazine showing off the B-58 Hustler, the first bomber capable of Mach 2 flight
1960 General Dynamics ad for the Convair 880
Howard Hughes, the wealthy eccentric who helped cause enormous losses at Convair in the early 1960s

Resources

Periodicals

Articles

Books

  • Sweetman, William. A History of Passenger Aircraft. London: Hamlyn Publishing, 1979.

  • Steele, James B. Howard Hughes: His Life and Madness. New York: W.W. Norton, 1979

Videos and Podcasts


Additional Reading


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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Lawrence Hamtil and clients of Fortune Financial owned the securities of Lockheed Martin and Martin Marietta at the time of this publication. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

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