Business & Finance: Comeback at El Segundo

When jovial, ruddy-faced, six-foot Donald Perell Smith suddenly quit as Vultee Aircraft general manager in 1938, airport wiseacres said his luck had run out, figured he was through with aviation for good. Yet last week Don Smith was playing his biggest role ever: president and spark plug of California’s Interstate Aircraft & Engineering Corp.—a smart, fast-growing aviation concern which has produced a plane so good the whole aviation industry is buzzing.

Borrow $80,000. Only a few months after he left his swanky Vultee office, Don Smith got a strange offer: take charge of Interstate Aircraft, a year-old, struggling parts maker with no cash, $186,000 debts and a two-by-six plant at El Segundo, Calif. Smith grabbed the job, went to work with $80,000 borrowed capital and a pair of young, bright, production-minded cronies from Vultee. In no time at all Smith had the parts business booming with sales of precision equipment like hydraulic units, bomb shackles, anti-aircraft gun sights. Then Smith got interested in light planes, turned out a breezy, low-winged monoplane called the Cadet, which quickly became the best selling light plane on the whole West Coast.

Sales $36,000,000. When war broke out Interstate’s parts business soared anew, its little Cadet was ordered by the hundreds for the Government pilot-training program. Meanwhile Smith and Navy engineers sweated hours over a bigger & batter plane, finally got one. Last May a cluster of Navy aviation experts flew to the little El Segundo plant, ogled a radically designed plywood plane. The Navy promptly placed huge orders. To take care of the rush, Smith expanded into Los Angeles, leased a huge furniture plant at De Kalb, Ill., handed multimillion-dollar aviation subcontracts to ex-jukebox makers Rudolph Wurlitzer Co. and ex-civilian producer Singer Sewing Machine, gave full plane contracts to a batch of war contract hungry New York State furniture makers.

This week Don Smith was a happy man. Interstate Aircraft was mushrooming all over the U.S. Within five months its sales may hit $36,000,000 annually—more than 100 times four years ago. Besides helping his own company, Smith is also feeding fat contracts to woodworking outfits which might otherwise rest in World War II’s economic graveyard. In doing all this Smith is sitting pretty—he is Interstate’s biggest stockholder.