Business & Finance: Fairchild Fission

Stockholders willing, a corporate fission will occur this autumn in a notable aviation name. Fairchild Aviation Corp. announced plans last week to divorce its engine and aircraft units from its aerial camera and survey business. The latter will be carried on by the present company. Shares in a new concern to be known as Fairchild Engine & Airplane Corp. will be distributed share-for-share to stockholders in Fairchild Aviation.

To most people Fairchild still means a high-wing, cabin monoplane popular with sporting brokers and airport joyriders in the twilight of the 1920’s. Depression hit the company as hard as it hit the rest of the industry, and in the last five years planes, on the average, have accounted for only one-fourth of Fairchild sales. The balance was derived from the aerial camera and survey divisions, in both of which fields Fairchild is an undisputed leader.

Fact is, Fairchild planes were simply an outgrowth of the original camera business founded by Sherman Mills Fairchild in 1921. Son of the first president of International Business Machines, Sherman Fairchild had the money and the talent to indulge his precocious interest in photography. Ordered to Arizona for his health after a futile attempt to get into the Army during the War, he set out to improve the crude cameras then used in aerial photography. Within a few years he had developed a precision instrument as far removed from the ordinary camera as a micrometer from a tape measure.

Not for amateur snapshotters are Fairchild cameras. An inexpensive model costs more than $1,000, and the most popular number sells for about $4,000. This model has one lens, is operated automatically by electricity. After the camera is set for the amount of overlap desired on successive pictures, the shutter clicks at regular intervals in the plane’s flight. Coincidentally with each click a little subsidiary camera records on the negative the time, temperature, altitude, bubble level reading and identification number. Then a vacuum, holding the film firmly flat during exposure, is released, and the roll is wound for the next exposure.

For about $13,000 one can buy a five-lens Fairchild for mapping larger areas. One lens shoots straight down, the other four at oblique angles. Distortion in scale caused by photographing at an angle is accurately corrected by a special instrument called a transforming printer. With one of the few nine-lens cameras Fairchild has built for surveying, an area of nearly 600 sq. mi. can be snapped at one exposure.

So advanced are Fairchild’s aerial cameras that the company now has the field entirely to itself in the U. S., and its equipment is standard in the civil and military services of no less than 21 for eign lands. Eastman Kodak is quite content to supply film. One growing use for film is in Fairchild’s machine-gun camera, an instrument for training combat pilots.

It is built, mounted and operated like a machine gun except that a trigger squeeze shoots a number of frames on a 16 mm. cinema film instead of a burst of bullets. After a sham battle, the pilots can see, precisely, where shots would have gone had they been firing a real gun. If there is any argument as to who “hit” first, the question is instantly settled by the time recorded to a split second on the film. List price of a machine-gun camera : $500.

Some of the most spectacular uses of Fairchild cameras are by Fairchild itself. Fairchild Aerial Surveys will take on any job from photographing an industrial plant or large estate to mapping 68,000 sq. mi. of the Southwest’s “dust bowl” as it is now doing for the Government. Power companies use the service in planning transmission lines, oil companies in surveying pipe-line right-of-way. Connecticut’s highway department Fairchild mapped the whole State for some $20,000. The Connecticut survey still provides Fairchild with revenues through sale of enlargements to towns and individuals. For less than $10 a picture nearly a yard square with a ground scale as large as 100 ft. to 1 in. can be obtained of any spot in the State. Connecticut towns use the maps for tax assessing.

Not the least of the Fairchild aerial wonders are aerial contour maps, now made in a big way for the Department of Agriculture in connection with soil conservation work. In a vertical aerial photograph the earth’s surface looks perfectly flat. Third dimensional relief can be obtained by the principle employed in the oldtime stereoscope. Pictures of the same area are shot from two slightly different positions, thus providing a parallax in the same way that a person’s two eyes do in normal sight. The two pictures are then inserted in a super-glorified stereoscope (built with Zeiss for $50,000). So accurate are the controls, so precise the instruments, that with the aid of another optical illusion it is possible on a flat map to trace from the apparent relief shown by the stereoscope the contour lines passing through points of the same elevation. Relatively limited is the demand for Fairchild’s highly-specialized goods and services. Sales of the camera division last year were only $776,000, of the survey division $245,000. Staffed and equipped to turn out almost any kind of precision instrument, Fairchild’s Woodside (N. Y.) plant has lately added sound and recording equipment. Lens-making it has never tried, preferring to purchase the types it needs from famed grinders like Bausch & Lomb.

Profitable though it has been, the camera and survey division has not been able to offset the aircraft losses. Founder Fairchild built his first plane because he could not find one that suited him for photographic work, starting commercial production in 1926. During Depression engine and aircraft sales shrank to a low of $72,000 (in 1931). Since then Fairchild has entered the transport field, has developed a high-speed amphibian popular with Pan American Airways, is developing for the Navy an in-line air-cooled motor. Sales recovered to $511,000 last year, and a comfortable backlog of orders is now on the books.

As a whole the company has been in the red for years, though losses in any one year since 1930 have never exceeded $100,000. By splitting into its two component parts, Fairchild will give stockholders the benefits of the camera and survey earnings, leave the engines and aircraft to stand or fall by themselves. Another reason for the split is that the expanding aircraft division will require additional capital, which would dilute the equity in the self-sufficient camera and survey business.

The proposed split is not the first but the second time that Founder Fairchild has made little corporations out of big ones. The tall, husky, 40-year-old inventor took his enterprises into Aviation Corp. when that big holding company was formed in 1929. At the end of two years Mr. Fairchild had had enough of the boomtime merger, arranged for his company to regain its independence. Since then he has collected for Fairchild a notable roster of executive and engineering talent, including such names as Col. John H. Jouett, famed “father of the Chinese air force”; James S. Ogsbury, a high-powered onetime International Business Machine executive; Col. Virginius Evans Clark, successively chief aeronautics engineer to the U. S. Army, to General Motors Corp., to Consolidated Aircraft Corp. to Aviation Corp.