Business & Finance: Crosley Cars

Every time Powel Crosley Jr. gets sidetracked, he builds the side line into a main line. Having built five main lines, he appeared last week about ready to shunt into a sixth.

Powel Sr. wanted Powel Jr. to follow him into law. But young Crosley liked to tinker with automobiles. By 1906 he was a private chauffeur (although his father was a prosperous attorney). By 1909, at 23, he was president of an automobile manufacturing company. It was his idea to make a low-priced, six-cylinder car, but bad financing wrecked the venture and for eleven years he drifted from job to job, automobiles to advertising to gadgets.

In 1921 Powel Jr. wanted to buy a radio for Powel III. Asked to pay $130 for a one-tube set, he found he could buy parts and make one himself for $35. Result was Crosley Radio Corp. of Cincinnati, Ohio, now approximately fourth largest U.S. radio producer. From the vocation of making radios to the avocation of radio broadcasting was a short shunt and the upshot was station WLW, most powerful in the world along with Moscow’s RVI. WLW sends out such big charges (500,000 watts) that neighbors report hearing hillbilly bands in their drainpipes and lighting electric bulbs with wires stuck in nearby ground.

In 1927 Mr. Crosley became interested in iceboxes. Now Crosley Refrigerators are turned out on an assembly belt at a rate of nearly 2,000 a day. An old baseball fan, Mr. Crosley had long been disturbed by the Cincinnati Reds consistently losing money and games. So in 1934 he bought Line No. 5. He has since carried the Reds out of the red and into the first division of the National League.

A few Crosley sidings have remained sidings. Soon after he went on the air with WLW he went into it with biplanes which he called Moonbeams. Now he no longer makes planes but owns three airfields, always travels by private plane. He produces washing machines, ironers, ranges, bottle coolers, and a strange gadget called the Xervac, designed to stimulate hair growth by alternate vacuum and pressure. These big and little lines are all gathered under an $8,800,000 corporation, Crosley Radio Corp., which last year lost $376,915 (partly because of damage by fire and flood), but which had average net profits of $820,000 for the three previous years. About 33% of sales are radios, 50% refrigerators.

All through his experiments and expansions, Mr. Crosley has been wistful about his first and least successful love, the automobile. For some time he has been reported toying with a little two-cylinder car, to sell at about $200. Last month stockholders received a letter proposing that the company change its name—leaving out the word Radio—and alter articles of incorporation “so that the company will be able, if conditions warrant, to enter the automobile industry when, as and if, such entry into the automobile industry appears desirable.”

Last week, as Mr. Crosley left Cincinnati for a ten-day trip on his 100-foot yacht, Sea Owl, he denied that his company was ready to produce automobiles, but admitted “experiments.” Stockholders, having ratified the proposed changes, met this week to discuss next moves. Cincinnatians, believing Powel Crosley had crossed the switch into a new siding, expected to see the new car before the New Year.