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Fairchild Aviation Corporation - Lehman Brothers Collection

Fairchild Aviation Corporation

List of Deals

Fairchild Camera & Instrument Corporation was incorporated in Delaware in 1927 as the Fairchild Aviation Corporation. Fairchild Aviation was formed as a holding company to bring together a group of seven aircraft businesses that were the outgrowth of Fairchild Aerial Camera Corporation, which was incorporated in 1920. As a result of this merger, Fairchild Aviation became the second-largest manufacturer of commercial airplanes and the fourth-largest aviation organization in the United States.

One of the better known companies involved in this merger was Fairchild Aerial Camera. Fairchild manufactured aerial cameras for military and commercial aerial mapping that were used in Russia, Poland, and throughout South America. They were the official cameras of the United States Army and Navy Air Services.

During the 1930s and 1940s the company continued to reorganize. It created the Fairchild Engine and Airplane Corporation in 1936 to hold its aircraft and engine businesses as well as its interests in Canada. In 1943 Fairchild sold Taylorcraft Aviation Corporation, and in 1944 Fairchild changed the company name from Fairchild Aviation to Fairchild Camera and Instrument Company.

The period during World War II was a busy time for Fairchild, as the demand for many of its products were used in the war effort. The product line expanded to include machine gun cameras, x-ray cameras, radar cameras, gun synchronizers, and radio compasses. In 1941 the company had a backlog of $22.8 million in government order, the bulk of which was for aerial photography equipment. The number of employees also grew from 400 in 1940 to 580 in 1941 and 650 in 1942.

In the post World War II years, military sales still represented a large portion of Fairchild's earnings and revenue. In 1947, approximately 67 percent of company revenues were derived from the sale of C-82 Packet cargo and troop-carrying airplanes and spare parts under contract with the U.S. Air Force.

The company also began to develop products for the commercial sector such as manufacturing x-ray equipment. In 1948, Fairchild announced that it had gone into limited production of the Fairchild Lithotype, which was described as a revolutionary electrically driven machine that types standard printers' type in a great variety of faces and sizes. This product could be used by newspaper and other publishers.

Fairchild attained the highest earnings in its history with net income in 1950 of $3,094,768 on sales of $59.9 million, as compared to 1949 when it earned $1,575,328 on sales of $48.1 million.

During the 1950s, Fairchild invested heavily in research and development. In 1958 alone, R&D expense amounted to $1.5 million, a 3-fold increase from the previous year. The result of this investment in research was the development of new products that ranged from devices combining radar and photography for training pilots to automatic corrected color engraving machines. In 1958 it developed high-speed processing equipment for motion pictures that could develop 500 feet of film almost instantly. During this period it also established Fairchild Semi-Conductors Corporation, a West Coast subsidiary that made transistors and similar components.

Fairchild sales exceeded the $100 million level in 1961, and the company began a decade of acquiring new companies and investing a large part of its earnings into the development of new products.

In 1960 Fairchild merged with Allan B. DuMont Laboratories and acquired a one-third interest in Societa Generate Semiconduttori, S.p.a., and Italian semiconductor producer that gave Fairchild access to European markets. It acquired the printing press business and other assets of Waste King Corporation of Los Angeles in 1961. In May 1961 it also added Circle Weld Manufacturing Corporation, producers of heat exchangers, ducts, flexible joints, sensors, and other similar products, as well as Curtis Laboratories, designer and manufacturer of precision optical and photographic equipment.

Fairchild added seven more companies in 1962: Cosmic Corporation of El Cajon, California; the Addressing Machine division of Dashew Machines of Los Angeles; Di-Tran Corporation of Los Angeles; the Central Electronic Manufacturers division of Nuclear Corporation of America; two Davidson Company divisions of Mergenthaler Linotype Company; and Winston Research Company of Los Angeles.

It purchased Electro Sensative Products of Amsterdam, New York in 1964, and in 1965 Fairchild acquired White Avionics of Plainview, New York. In 1967 Fairchild added Pro-Tech, producers of water quality monitoring equipment and acquired substantially all of the assets of World Magnetics of Michigan, makers of magnetic heads for electronic reading of printed magnetic ink characters.

In 1970 Fairchild acquired Inland Manufacturing Inc., Inland Molding Inc., and Inland Machine Inc., Walnut, California producers of precision molding equipment. Fairchild had sales of $193.1 million by 1972, however it lost of $7.8 million. It had lost $32.6 million in the previous year as well.

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