Beechcraft – Diversify or Die

During the late 1940s and into the 1950s the cyclical nature of the commercial and military aviation business forced the Beech Aircraft Corporation
to seek new sources of revenue to survive.

“It is said – not by us at Beechcraft but by those whose profession it is to know such things, that the history of general aviation is, in the main, the history of Beechcraft,” said Frank E. Hedrick, executive vice president of the company during his address to the Newcomen Society September 28, 1967.¹

Hedrick’s statement was bold and to a great extent, true – but the company founded by Walter and Olive Ann Beech in 1932 was only one of many that helped put wings on the world. Hedrick, who already had extensive experience in sales when he went to work at Beech Aircraft in 1940, arrived on the scene when the company was undergoing an extensive expansion of its manufacturing capabilities to meet military contracts for training airplanes. Facing an uphill struggle to meet demand, in July 1940 the decision had been made to terminate production of commercial airplanes, except for priority orders already on hand.

As 1941 approached, Beech Aircraft, along with the Cessna Aircraft Company and the Wichita Division of the Boeing Airplane Company, were hiring massive numbers of workers to build President Franklin D. Roosevelt’s “Arsenal of Democracy” aimed at supplying Great Britain with the weapons it needed to fight Adolf Hitler and his Nazi regime. Included in that arsenal was the goal of manufacturing 50,000 military aircraft. Such seemingly impossible targets would require a workforce of millions, and Americans quickly signed up and went to work. For example, at Beech Aircraft in November 1940, there were 1,935 men and women toiling on the production lines to build the AT-11-, C-45-, SNB- and GB-series aircraft for the United States War Department. By contrast, by June 1945 employment had peaked at more than 14,000. As the war neared its end in 1945, Hedrick had already been heavily involved in the planning and executing of a transition from wartime to peacetime production.

In his speech at the Newcomen Society, Hedrick summed up the situation: “With Japan’s surrender, total United States industry faced a grim and uncompromising assignment: the transition from military to civilian production. Time was of the essence – time to solidify dormant civilian markets, time to reestablish product lines and time to let the economic laws of supply and demand adjust to a climate of peacetime coexistence.”

Walter and Olive Ann Beech needed that time to pull together their company’s resources, both material and personal, before launching two airplanes that had been quietly designed and developed during 1944 and 1945 – the Model D18S and the Model 35 Bonanza. The two company co-founders believed both aircraft would put the company back on a firm commercial footing.

In October 1945, only two months after Japan’s capitulation, Walter Beech had his engineers and production managers, including Frank Hedrick, focused on manufacturing the Model D18S and the Model 35. One other airplane, the Model G17S, a postwar upgrade of the venerable Model D17S biplane, was offered in limited numbers and only 20 were eventually built. It is worthy of mention that the D18S was the first postwar commercial airplane to receive an Approved Type Certificate.

Meanwhile, in addition to building new airplanes, Beech Aircraft management “sought out several avenues of diversification” to keep the company solvent and skilled workers on the payroll. Among these “avenues of diversification” was the manufacture of prefabricated homes. In the wake of the war there was an enormous shortage of housing – a shortage so severe that some experts claimed demand could not be met until the mid-1950s.

According to Hedrick, “So it was that Beech Aircraft temporarily entered the fringes of the real estate industry with a prototype of [an] all-metal house.” He was referring to a design created by famed inventor and architect, R. Buckminster Fuller. Dubbed the Dymaxion House (shown on page 21), it was developed chiefly to address shortcomings found in the construction of homes during the late 1930s and into the early 1940s. Fuller’s plan was to mass produce the Dymaxion design as kits that could be assembled on-site, with an emphasis placed on the ease of shipping and assembly.

The first house was completed in 1930 but was redesigned in 1945 and represented one of the first major efforts to construct an autonomous building in the 20^th century. A postwar version of the Dymaxion design became known locally as the “Wichita House” and was Fuller’s latest attempt to provide a cost-effective dwelling for the masses.

Hedrick described the house as resembling a pumpkin, “suspended on a center post that permitted it to be rotated so that any of its segments could be aimed into the sun to absorb the latent energies of solar heat.” In addition to the potential of commercial sales, the U.S. military expressed some interest in Fuller’s creation as portable housing for troops both domestically and internationally.

As for Beech Aircraft’s involvement, the company’s experience working with sheet metal structures, coupled with its core workforce of skilled craftsmen, made it an ideal subcontractor, as were other American airframe manufacturers. A Beech Aircraft promotion of the house proudly proclaimed that, “Using the very same materials and tools, even the same workers, assembly lines can turn them out at a clip never before seen in home construction. A quarter of a million a year in Wichita’s plants, 60,000 at Beech Aircraft alone. A complete house for $6,500 – the price of a Cadillac.”

Unfortunately, no production contracts were forthcoming and Beech Aircraft built only one example of the highly touted Dymaxion House – the sole example ever constructed. As of 2020 it resides at the Henry Ford Museum in Dearborn, Michigan. The house did serve as a family dwelling for about 40 years near Wichita before it was disassembled and transported to the museum for restoration.

After the war there was great optimism throughout the light airplane industry that demand for personal aircraft would skyrocket, with some overly optimistic prophets going so far as to boldly predict that by 1947 every garage would house a car and an aircraft. The economic recession that struck America in 1948-1949 quickly ended such unattainable fantasies. Hedrick summed it up well: “The personal aircraft market declined rapidly, and as a result, sales of the popular Bonanza plummeted to fewer than 350 from a high of 1,000 per year in 1947.” Many small aircraft companies such as Taylor craft, Piper, Stinson and others struggled to stay in business or entered into bankruptcy proceedings.

Once again, Walter and Olive Ann Beech were confronted with a serious financial situation that had to be addressed in hopes that better times would soon return. The sales doldrums of 1949 bled over into 1950. Hedrick recalled how sales slowed “to a disquieting tempo.” Fortunately, Mr. Beech once again “toyed with a sprinkling of projects as far removed from airplanes as “A” was from “Z.” This time, it would be farm implements, not prefabricated houses.

In 1949 the company entered into contracts with the Chicago, Illinois-based Great American Harvester Company to manufacture corn thre-sh-ers. Wichitans who drove past the Beech factory campus suddenly saw row upon row of red corn picker machines spread all over the airfield. Sadly, as with the Fuller house project, the timing was wrong for an agricultural-related business venture. As Hedrick pointed out, “The corn pickers were produced in late fall and early summer and it was not until the next February that a most remarkable inventory was ready to go to market. But this being the offseason, there were no customers.”

Undaunted, in 1949 Walter and Olive Ann had also secured contracts with the Seeger Refrigerator Corporation to produce aluminum vegetable crispers and meat preservers and topped off that year by securing work building components for cotton pickers and hay balers from the world-famous International Harvester Company. In addition to work from Seeger, Hedrick said the company “Actively sought out and accepted a scattering of similar contracts: plastic nozzles for hair dryers, a new type of individual-piece aluminum pans, parts for automatic dishwashers, and later, in a more basic military flavor, the production of thousands of 110-gallon casings that, when primed with special inflammables, would serve as fire bombs in front-line trouble zones.”

Although these and other contracts were helpful in retaining workers and meeting the payroll, Hedrick emphasized that Beech Aircraft Company’s primary objective remained the “design and manufacture of high-performance aircraft.” By 1952 Beechcrafters were busy building not only the piston-powered T-34 Mentor primary trainer for the U.S. Air Force and the Navy but were also engaged in manufacturing fuel tanks for jet aircraft at facilities in Herrington, Kansas, that were leased to meet that demand.

In 1951, however, the Air Force had issued the company a highly lucrative contract to design and develop a pressurized, twin-engine trainer designated the T-36A. The airplane could also be operated as a transport and was to be powered by two Pratt & Whitney R-2800 static, air-cooled radial engines. Plans called for a crew of one instructor and three students, or two crewmembers and as many as 12 passengers. Performance requirements called for a maximum speed of 350 mph at 30,000 feet.

It was estimated that production contracts for the T-36A would generate about $300 million annually and would have required a 200% increase in the workforce. As plans progressed 500 new employees were hired each month, eventually leading to a company-wide total of 13,000 people. To meet projected demand for the new Beechcraft, the company constructed a new building with 110,00 square feet to house manufacturing, production, final assembly and delivery.

During 1952 a mock-up and a pre-production prototype of the proposed T-36A was completed. Then suddenly, and without any warning, in June 1953 the Air Force abruptly canceled the entire program. It was a major financial blow to the company. As Hedrick described the situation, “There was not to be another dollar spent or another rivet driven. So abrupt was the cancellation that, much to the chagrin of engineers and test pilots alike, not one flight in the prototype airplane was permitted” although it was only hours from its maiden flight. In the wake of the T-36A disaster, employment quickly plummeted to only 6,800 workers. “This was an economic disaster that might have collapsed some companies, but under the direction of Mrs. Beech we pulled ourselves together and went forward,” Hedrick said.

To make matters worse, in 1953 the general aviation market remained soft and sales of new Beechcrafts were insufficient to adequately support the company’s facilities and employees. Despite the fact that subcontract opportunities after the war “had not been too successful,” workers soon began manufacturing wings, flaps, ailerons and fuselage sections for other airframe builders. These included The Boeing Company, Bell Helicopter Company, Convair, Douglas Aircraft Company, Grumman Aircraft Engineering Corporation, Lockheed Aircraft Corporation, North American Aviation and the McDonnell Company.

By 1955 these subcontracts were providing Beech Aircraft with sales amounting to $25 million – about 30% of gross sales – and continued to be a reliable source of revenue contributing $36.5 million by 1966. One year later Hedrick was able to report that for fiscal year 1967, total military and aerospace sales approached $75 million and export sales of commercial and military aircraft for the previous year totaled more than $25.5 million. A significant part of that amount was due to the company’s worldwide network of 32 distributors and 48 dealerships in 80 countries.

Hedrick was once asked by a reporter to summarize the Beech Aircraft Corporation in 15 words or less. Instead, he did it in only 10: “Beech Aircraft’s business is the movement of people and products.” From its humble beginnings in 1932, Walter and Olive Ann Beech never strayed from that creed. In 1933 sales amounted to a mere $17,552 and employment stood at 10 people, including Walter, Olive Ann and engineer Ted Wells. By 1967 sales totaled $175 million and 10,000 men and women were on the payroll.

Hedrick summed up potential of the years ahead this way: “Because of the past we are better prepared today to meet the challenges of the future. We shall continue a planned, steady growth, relying to a great degree upon one of our most precious assets – flexibility – which is the result of diversification of activities.” Although the company has become a part of Textron Aviation, Hedrick’s words still ring equally true today.                 

Notes:

In 1968 Frank E. Hedrick was elected president of Beech Aircraft
Corporation. He retired in 1982 and died at age 76 in June 1987.
Hedrick did not learn to fly but in 1932 did hold a student pilot certificate.