Cord into Ships

One day last week Errett Lobban Cord, who has grown very rich supplying transportation on land and in air, ventured out upon the sea. He announced that he had added New York Shipbuilding to the lengthening list of Cord companies, most important of which are Auburn Automobile and Aviation Corp. Next day the Navy Department dished out its New Deal contracts and Mr. Cord's shipyard got the biggest slice of all--a $38,450,000 order for two 10,000-ton cruisers and four destroyers (see p. 10). The youngish onetime automobile salesman was at his home in Beverly Hills, Calif. when these things happened. In Manhattan, his hardworking, hard-bitten second-in-command, Lucius Bass ("Lou"') Manning, swore that it was no more than a happy coincidence. In his big suite in the Waldorf-Astoria, Lou Manning told newsmen that Mr. Cord & friends were interested in all forms of transportation-- except those that run on rails. They began hunting for a shipyard long before President Roosevelt launched the Big Navy program. A shipyard would round out their setup. But Wall Street sized up the deal thus: Mr. Cord had shrewdly perceived that shipbuilding (in which labor is nearly 85% of the total costs) would bulk large in any public works program, that by buying one of the biggest U. S. shipyards he was sure to get some of the biggest contracts. New York Shipbuilding's capitalization made it easy for Lou Manning to negotiate the deal for his boss. Sole voting power in the $15,000,000 concern rests with 185,500 founders' shares. And a majority was available in two blocks-- one owned by the old partners of Blair & Co. (Bancamerica-Blair), one by Chase National Bank which salvaged the shares from the wreck of Pynchon & Co. For the two blocks Cord Corp. paid about $2,000,000. Though New York Shipbuilding founders' shares soared from $2 to $20 a share this year, Lou Manning denied any open market operations. Chairman William Mowat Flook stepped down to vice chairman to make way for Mr. Cord and Lou Manning became chairman of the executive committee. Venerable President Clinton Lloyd Bardo stayed on to build the ships. Andrew William Mellon founded New York Shipbuilding in 1899 (see p. 47). Astute, he sold it out at the height of the Wartime shipbuilding boom. After the War when marine construction dwindled almost to nil, it branched into electrical equipment under license agreements with the famed Swiss firm of Brown, Boveri & Co. Ltd. In 1925 it changed its name to American Brown Boveri Electric Corp. Diversification proved to be illadvised. In 1931 it sold its electrical business to Allis-Chalmers, resumed its old name, began to make money. Profits jumped from $1,528 in 1930 to $1,205,000 in 1931, $1,328,000 last year. Much of this came from contracts from U. S. Lines for the Manhattan and the Washington, largest liners ever built in the U. S. Mr. Cord's first ship, the U. S. S. Tuscaloosa, now on the ways, will be New York Shipbuilding's 407th.

No two ships are exactly alike; any ship is an exceedingly complex mechanical device. For a 10,000-ton cruiser a shipyard spends $900,000 on plans alone before the keel is laid. And because New York Ship building's engineers can design, and its shops turn out, anything from a bilge pump to a 17-ton propeller, Messrs. Cord & Manning believe they can set the latest member of the Cord family to new tasks should shipbuilding ever return to the doldrums of the 1920's.

This file is automatically generated by a robot program, so reader's discretion is required.