Hughes Aircraft History 1932-1986 Transcribed by Faith MacPherson

Editor’s note: Recently I was contacted by Jon Wilkman and asked to provide some background information on Hughes Aircraft. His company, Wilkman Productions, has been tasked by an advertising agency to write a book about Hughes to publicize the old Hughes Culver City site to prospective tenants.   In my search for something to give him I found a brochure entitled “at the forefront of technology” produced by Corporate Human Resources in 1986 probably for the benefit of General Motors. I gave this to Jon, but I also thought, even though it isn’t solely concerned with Hughes space activities, that I should post it on our website. Jack Fisher

Hughes Aircraft Company was established in 1932 under the umbrella of the Hughes Tool Company to support Howard Hughes’ interest in aviation. His early success with the H-1 racer brought respect to the handful of designers and craftsmen who worked for the Company. In 1936 and 1937 Hughes Aircraft Company entered the competition for the design of an Army Air Corps interceptor and won. Since Hughes Aircraft Company had no production facilities, the production contract was ultimately awarded to Lockheed Aircraft Company.

During 1937 and ’38 the radio department of Hughes Aircraft Company was working on the equipment for Mr. Hughes’ around-the-world flight. This department, under the direction of Dave Evans, was the seed of the Company as it is now. However, at that time and for the next dozen years, Hughes Aircraft Company anticipated becoming a competing airframe manufacturer. In 1939, design started on an advanced fighter bomber made principally of plywood. Prototype versions were flown in 1943, which led to a contract to build 100 photo reconnaissance planes for the Army Air Corps – the XF-11. When the war ended two years later, the contract was cancelled and Hughes was to complete only the two experimental planes under construction.

In 1941, the Company moved from Glendale to Culver City, where it had purchased a tract of land eventually to total 1,300 acres. At that time there were about 500 employees, 100 of whom were engineers.

During World War II, a Hughes engineer developed a flexible feed chute to speed the operations of machine guns on B-17 bombers. The Company also made electric booster drives, making machine guns less likely to jam, and manufactured wing panels and other part for military planes from Duramold – the patented wood substitute for metal.

In 1942, Hughes and shipping magnate Henry Kaiser won a contract to produce three “flying boats,” the HK-1 cargo plane. Due to the wartime shortage of aluminum and steel, the flying boat was to be built with wood, using the Duramold process. The contract was reduced to one prototype for $18 million. Its gross weight was 200 tons, three times heavier than any plane then in existence. The propellers were seventeen feet in diameter, the hull thirty feet high, and the tail as tall as a five story building. It had a wingspan twenty feet longer than a football field.

A Congressional subcommittee investigation on the operations of defense contractors during World War II was conducted in 1947 and Howard Hughes was the chief target of Committee Chairman Senator Owen Brewster. The investigation focused on the HK-1. With his reputation on the line and $7 million of his own money invested in it, Hughes vowed that if it wouldn’t fly, he would leave the country and never return. Within weeks, he flew the HK-1 for one mile in Long Beach Harbor at an altitude of seventy feet. It was never flown again.

After World War II, Hughes brought in two retired Air Force Generals – Ira Eaker was made a Vice President of the Hughes Tool Company and Liaison with Hughes Aircraft Company, and Harold George as Vice President and General Manager of Hughes Aircraft Company. C.B. Thornton, a retired Air Force colonel and former executive from Ford Motor Company, was hired as Assistant to Mr. George.

In 1945, Hughes Aircraft Company was awarded an Air Force contract for guided missile development. This project soon came under the direction of Dave Evans in the Radio Department. Evans then brought in Dr. Simon Ramo, a Cal Tech graduate and manager of General Electric Company’s Research Laboratory, and Dr. Dean Wooldridge, another Cal Tech graduate who was a Vice-President at Bell Telephone Laboratories. They quickly adopted the objective of building up a Research and Development organization more competent than any other in the electronics industry, and began looking for projects thath only that level of competence could handle. They began to concentrate on electronics, or what soon became known as AVIONICS (AVIation electrONICS).

The Radio Department became the Electronics Department in 1947 and was working on studies of active and passive seekers. In 1948 Hughes Aircraft Company won an $8 million contract to build and install 200 radar units for the Lockheed F-94. Successful accomplishment of that task led to a long succession of radars and radar-based weapon control systems for interceptor aircraft. Hughes also developed the Falcon air-to-air missile, the smallest of the world’s early guided missiles. Six feet in length and weighing 130 pounds, it was part of the weapon system for numerous interceptor aircraft, culminating in the F-102 and F-1-6 supersonic interceptors.

All missile activity was incorporated into the Electronics and Guided Missile Department in 1949. Dr. Allen Puckett came to Hughes that year. In 1950, this Department became the Research and Development Laboratories. Ramo and Wooldridge were appointed Directors of the Laboratories. The following year, 1951, the Guided Missile Department became a Laboratory and the sections became departments. Ramo was appointed Director of Operations. The first guided missiles were tested that year and additional missiles were built at the newly established Manufacturing Division in Tucson in preparation for large-scale production of tactical missiles.

In 1952 Hughes Aircraft Company had 15,000 employees, with 1,000 scientists. Profits after taxes were $5.3 million, its revenues surpassing the Tool Company. At that time the Company was organized into the Aeronautical Division, which included armaments, the Flying Boat and Aeronautics; the Research and Development Laboratories, which had labs for radar, missiles, advanced electronics, electron tubes, and field engineering; Electronics Manufacturing; and the Tucson missile plant.

In 1953 the Company’s sales to the military were $180 million between Culver City and its new missile manufacturing plant in Tucson. Nonetheless, 1953 was a critical year for Hughes Aircraft Company. In the Fall of that year, Ramo and Wooldridge left the Company to form the Ramo-Wooldridge Corporation (later to become TRW). General George joined them and Thornton and Ash also left, soon to start Litton Industries. All of these men cited difficulties in working with Mr. Hughes as a major factor in their decision to leave. The disruption that these top-level departures might be expected to cause was a source of great concern to the Air Force. The Korean War was still going on and Hughes Aircraft Company was the sole supplier of Air Force all weather interceptor fire-control systems.

The Secretary of the Air Force, Harold Talbott, issued an ultimatum – Mr. Hughes had ninety days to reorganize the Company in such a way that he, personally, would not be actively involved in its management, or the Air Force would cancel all its contracts. On the 90th day of that period Mr. Hughes announced the establishment of the electronics portion of Hughes Aircraft Company as a separate corporation (taking with it the name Hughes Aircraft Company) and gave sole ownership of that corporation to the newly founded Howard Hughes Medical Institute. Mr. Hughes had, since his youth, intended to leave the bulk of his estate to medical research; he carried out that intention as a way of satisfying the Air Force ultimatum. The new Medical Institute was to become the most heavily endowed institution of its kind in the world. Following 1953, Howard Hughes essentially divorced himself from the operation of the Hughes Aircraft Company. By the end of 1953, Hughes Aircraft Company ranked 22nd on the DoD contract dollar list.

The aeronautics and armament activities of the Tool Company’s Aircraft Division remained as a subsidiary of the Hughes Tool Company when the new Hughes Aircraft Company was incorporated. In 1955 a two-seat helicopter was designed, put into production in 1960, and received an Army contract in 1964. From 1964 to 1969 Hughes Helicopters delivered 793 such aircraft for use in the Vietnam War.

Lawrence A. (Pat) Hyland from Bendix was appointed Vice President and General Manager of Hughes Aircraft Company in 1954. During the previous twenty-five years Mr. Hyland had established a reputation as a well respected scientist and technical manager. He remained General Manager of Hughes Aircraft Company for the next twenty-two years. He became President of Hughes Aircraft Company after Mr. Hughes died, and then became the CEO.

Mr. Hyland decided to follow the business approach that had been successful for the Company in the past – emphasize the development of integrated avionics for jet interceptors, build an ever-increasing backlog of sales, increase the number of employees and facilities, and increase profits.

One of Mr. Hyland’s major contributions to Hughes Aircraft Company was to decentralize its operations and make those in charge of those operations totally responsible – including responsibility for their own operating budget. They reported to a corporate organization that Mr. Hyland deliberately kept small. He wanted maximum decentralization so that product decisions could be made at level of management as close to the operating level as possible. He also emphasized synergy among the Groups, whereby research developments from one organization would find application in other organizations and product lines.

By 1958, the R&D Labs had split into Research Laboratories and three operating groups, Airborne Systems Group; the largest, consisted of several operating divisions: flight test, field service and support, communications, the Tucson (missiles) and El Segundo (electronics) manufacturing plants, and system development (headed by Dr. Puckett). The second major Group (the first to be designated a “Group”) was Ground Systems (GSG), located in Fullerton. The third operating group was Hughes Products, a component-oriented outgrowth of the Research Laboratories. Santa Barbara Research Center, which had been started by Dave Evans when he left Hughes Aircraft, had been acquired two years earlier as a subsidiary. In 1959, Hughes International was established.

By 1959, HAC had become the eleventh largest defense contractor, had contracts for $350 million and employed over 20,000 people. The Company occupied one million square feet of plant space. That was the year that the world’s first operating laser was build at the Research Labs at Malibu and the 30,000th Falcon missile was delivered to the Air Force.

At this time in our nation’s defense, a large effort was being invested in the development of Inter-Continental Ballistic Missiles (ICBMs). In 1959 the Air Force suddenly cancelled its requirement for the new F-108 long-range interceptor, which would have incorporated the Hughes ASG-18 fire-control system and GAR-9 missile. It was a major blow for the Company. Production runs of the MG-13 and MA-1 systems also came to an end in 1962 and the Company had to lay off about 20% of its employees. That was a particularly painful experience for an organization that had always taken pride in looking out for its employees.   Of all the large aerospace contractors, Hughes Aircraft has, to this day, enjoyed the reputation of being the most stable employer.

Times were hard for the next six years. Mr. Hyland vowed never again to allow the Company to become overly dependent on a single product line. Despite the reduced sales level, he sharply increased the independent research and development budget. He pushed the Company to develop exclusive expertise in a number of exotic, but important areas of defense electronics with long range potential for the future. This resulted in the broad diversification of products for which Hughes is now famous. In 1986, no single program accounts for more tha 6 percent of the Company’s business and the ten largest programs account for about 40 percent.

The next two decades were an exciting period in the history of the Company: the world’s first synchronous orbit satellite was launched; the TOW antitank missile was developed; the Surveyor soft landed on the moon; the ATS III transmitted the first color photographs of Earth; the Maverick TV-guided air-to-ground missile was built; the laser was developed for use in range-finders for tanks, in airborne fire-control systems, and as an industrial cutting tool.

In 1961, Airborne Systems Group became the Aerospace Group, and Hughes Products Group became Hughes Components Group. Allen Puckett and John Richardson (formerly Vice President of Marketing) joined Roy Wendahl as Vice President and Assistant Group Executives of the Aerospace Group. In 1965, Allen Puckett was made an Executive Vice President of Hughes Aircraft Company and in 1969, he was pointed Assistant General Manager to Pat Hyland. That same year, Hughes Components Group became the Industrial Electronics Group (IEG).

In 1971, those who had been working on satellites and communications systems were spilt off from Aerospace to form the Space and Communications Group (SCG). Soon the Aerospace Group became Aerospace Groups consisting of Electro-Optical and Data Systems Group (EDSG), Missile Systems Group (MSG). Radar Avionics—soon to become Radar Systems Group (RSG), and Supports Systems. In 1978, Missile Systems Group was established independent of Aerospace Groups. By 1981 Radar Systems and Electro-Optical and Data Systems became independent Groups.

The current organization consists of the six operating groups—Electro-Optical and Data Systems, Industrial Electronics, Missile Systems, Radar Systems, and Space and Communications. Support Systems provides field engineering support to the latter three operating Groups. The Research Laboratories, as it has for the past four decades, develops new technological areas and as these find applications in product line, those scientists and that technology move into one or more of the operating Groups. Santa Barbara Research Center is a major subsidiary. Hughes International markets Hughes products throughout the free world. By the time Mr. Hughes died in 1976, there were 32 subsidiaries and 12 affiliates throughout the country and the world. Hughes Communications Inc. markets most of the satellites purchased by large companies and other countries for their communications networks.

The Department of Defense (DoD) also changed with the times. Whereas a DoD contractor was previously paid for the cost of efforts or products plus a profit calculated as a percentage of the originally estimated cost, DoD now demanded fixed price contracts. At one time, a contractor that designed a product could expect to be the manufacturer. Now, the design could be given to separate contractors. The design of a product tends to be more costly to the company, while the profit is in production. So competitors who can’t out-design Hughes Aircraft Company, can underbid us on the manufacturing contracts and using Hughes drawings, take away the more profitable end of Hughes business.

Therefore, the management team of Pat Hyland (Chairman and Chief Executive Officer), Allen Puckett (President) and John Richardson (Executive Vice President) decided to modernize our manufacturing facilities to enhance their productivity and competitiveness. In 1977 they embarked upon a five-year $1 billion building program to give the company new facilities and equipment’ in which products could be designed and manufactured more cost effectively.

In 1979 Mr. Hyland retired from the Chairmanship of Hughes. Dr. Allen Puckett, a graduate of Caltech and a Hughes employee for thirty years, became the new Chairman and CEO. John Richardson was appointed as President. Subsequent to Mr. Richardson’s death, Donald White was named to that position.

The defense procurement marketplace had changed drastically and required a new direction in leadership. Dr. Puckett was prepared for the challenge. The Department of Defense (DoD) had tightened up the performance specifications in their contracts, insisting on much greater emphasis on system reliability and demanding vigorous compliance with an ever-increasing volume of detailed contract requirements. High performance. Low cost, schedule deadlines, and detailed compliance had to be met simultaneously. In-plant inspections, random teardown and detailed inspection of hardware, as well as field audits were increased to ensure consistency between written procedures and work practices.

Dr. Puckett’s response was a formal commitment to Total Quality—to create and provide affordable products of superior quality, reliability, and performance, and to allow no operating decision to impact negatively on the quality of our products and operations.

From 1980 to 1986 employment grew from 56,000 to 80,000, one third of whom were scientists and engineers. Floor space totaled a staggering 22 million square feet, more than twice the amount just six years previously. Sales reached the $6.2 billion, with a backlog of $10.7 billion. Almost half a billion dollars was spent on capital expenditures in 1985 alone. At the same time the Company’s long term debt was reduced to under $100 million. The challenges had been met and the commitment to excellence continued. Since 1980, Hughes Aircraft Company has been one of the top tne defense contractors in the country and the leading electronics Contractor. It is California’s largest manufacturing employer.

After Howard Hughes died in 1976 the state of Delaware, in which both the Hughes Aircraft Company and its sole owner, the Howard Hughes Medical Institute (HHMI), were incorporated, contested the trusteeship of the Institute. The bylaws contained no provision for naming trustees to succeed Mr. Hughes.

The court charged that the Howard Hughes Medical Institute was not effectively discharging its fiduciary responsibility by owning only one asset, Hughes Aircraft Company, which paid a relatively small dividend, considering the valuable assets and sales of the Company. By selling the Company, HHMI could invest in a broader portfolio producing more income for medical research.

In June 1985 HHMI accepted an offer to sell Hughes Aircraft Company to General Motors for $5.2 billion. The GM-Hughes Electronics Corporation was established as a wholly owned subsidiary of GM and itself has two subsidiaries: Hughes Aircraft Company and Delco Electronics Corporation. With this acquisition General Motors became the largest corporation in the world. The basic mission of General Motors-Hughes Electronics is to accelerate the use of advanced electronics in GM products and production environments and, at the same time, to maintain our leadership in the arenas of defense and space.

2 thoughts on “Hughes Aircraft History 1932-1986 Transcribed by Faith MacPherson

  1. Jack, thanks so much for posting another fascinating insight into the history of Hughes.