Word: avco
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Seven months ago William Averell Har- riman. then board chairman of potent Aviation Corp.. was persuaded to invite Motormaker Errett Lobban Cord into the directorate of Avco. Mr. Cord had been a painful nuisance to Avco and other ''pioneer'' operators with his low-fare Century Air Lines, his rambunctious efforts in Washington to get mail contracts. Avco took over Century, gave Mr. Cord 5% of the Corporation's stock. There were expressions of esteem on both sides. But the industry, aware of Mr. Cord as a shrewd, aggressive operator, accustomed to running things...
Last week came the explosion, with a loud bang. Mr. Cord, who had increased his ownership of Avco stock to 30% was now openly clamoring for control of the company. He charged the present management with the loss of $38,000,000 in three years through "extravagance, waste, speculation, shrinkage of properties, cancellation of officers' debts.'' For whatever economies the company effected since April, he claimed full credit. He accused the "reigning clique" of transacting all important business in "secret meetings" unknown to him, the biggest single stockholder: of plotting to perpetuate its own regime for another...
...explosion was touched off by Avco's quiet negotiations to acquire the assets of another big holding company, North American Aviation Inc. To pay for the property, Avco was to issue nearly 2,000,000 new shares of stock. Chief among North American's assets is a transport system covering the Atlantic seaboard below New York, joining Avco's transcontinental line at Atlanta and meeting its Boston-Montreal sector at Newark. Integrated, the network would blanket the East and South. But whatever the merits of the deal, its effect would be the reduction of the Cord share...
When Mr. Cord in Beverly Hills. Calif, saw the imminence of that threat last week he fairly popped with rage, sent his lawyers rushing into court at Wilmington. Del. Just as the Avco directors sat down to complete their merger plans for submission to stockholders, the Wilmington court granted a temporary injunction restraining the board from further action. Avco pried loose the injunction, but agreed not to consider the deal further until next week when Mr. Cord would be back in New York...
...holds a 12% interest in P. A. A. It was organized in 1929 by the late Carl Ben Eielson, father of aviation in Alaska. While it enjoyed a romantic, lusty existence in a land where the airplane is an immeasurable boon, Alaskan Airways never made money. Prime reasons were Avco's lack of facility for remote control of operations; and Alaskan Airways' unprofitable mail contracts. These are not true airmail contracts but "star routes"* won from the dogsled contractors by underbidding. The contractor is required only to carry the mail, receives no extra compensation for flying...