Issued after a day in which the companies at first refused comment, then denied knowledge of merger plans, the statement is as follows: "Of our own volition, we have for some time been mutually exploring the business aspects of a possible future association of our companies. The facilities, products, proximity of location and experience of Consolidated and Vultee so complement each other as to make possible the more expeditious completion of their defense assignments. However, the initial steps of this transaction, the terms of which are not fully agreed upon, contemplate the purchase by Vultee Aircraft, Inc., of the Consolidated stock holdings of Maj. Fleet and others. The present negotiations are between Vultee and Maj. Fleet as an Individual and not with Consolidated as a corporation. In the event the transaction is consummated, it would be the desire that the extensive knowledge and long experience of Maj. Fleet be made available in an advisory capacity for a substantial period of time. Any other statements are premature and were not authorized by either party."
The first paragraph of the statement was taken by observers as an effort to refute intimations that the move had been inspired by a war department desire "to effect a change in management" at Consair.
News of the Vultee-Fleet deal came over the wires in advance notices of a story the American Aviation Daily planned to print at Washington. Confronted with the story, a Vultee spokesman early yesterday morning said the deal was under way. Consair officials steadfastly denied any knowledge of the transaction, while Maj. Fleet was reported "unavailable" for comment on reports that he and members of his family had sold their stock holdings to Vultee for $10,000,000. Later Vultee asserted the company spokesman who had issued the "premature" confirmation of the merger had been discharged. While there were no official reports on financial powers behind the merger plan, It was rumored in aircraft circles that Tom Girdler, chairmen of the board of the Republic Steel Corp., might be interested in the transaction.
Another name mentioned was that of Victor Emanuel, New York investment banker, director of Vultee and Republic and a navy pilot during the World war. Meanwhile reports were current in local aircraft circles that Girdler was at Downey or on the way there in connection with the big aircraft deal. Talk of such a transaction has been heard in financial circles in Los Angeles and in Washington for weeks one authority said. Vultee was prepared to take over the huge Consolidated plant Dec. 1.
He said Vultee was purchasing the 348,822 shares of Consair stock owned by Maj. Fleet and an undisclosed number of shares held by other members of the Fleet family.. Consolidated's common stock totals 1,291,574 shares. We added that the purchase would give Vultee control of Consair.
Consolidated has $750,000,000 in orders from the United States and British governments for multi-engined bombers. Vultee has $162,000,000 in orders from the United States, Peru and China for training planes. W. J. Chudleigh, president of Aircraft Local 1125 of the A.F.L. Machinists union, which holds bargaining rights for most of Consair's 30,000 workers, said the contract between his union and the plane plant would continue if there is a change in management. He said that, while Vultee at Downey has a labor contract with the C.I.O. United Auto Workers, a Vultee plant in the east has an A.F.L. contract. The Consair-A.F.L. contract expires May 27, 1943, or at the end of President Roosevelt's unlimited national emergency, whichever is shorter.
The company now planning to obtain control of Consair is named after the late Jerry Vultee, aircraft designer, who founded the company, but who died in an air crash three years ago while honeymooning in Arizona. Following reorganization two years ago, Vultee began expanding. A year ago it increase its facilities by a merger with the Stinson Co., which had plants in Tennessee and Michigan. Its Downey plant employs 10,000 workers. Its president is Richard W. Miller. Consair was formed in East Greenwich, R. I., and moved to Buffalo N. Y. in 1924, and came to San Diego in 1935.
Developer of the quantity-production B-24 bomber known to the British as the Liberator, and the PBY navy patrol plane, called the Catalina by the British, Consair is one of the largest airplane factories in the world. Its home plant is estimated to have cost $20,000,000, while a $20,000,000 estimate also has been placed on a recently completed parts plant. In addition the company has a contract to provide management for a huge plant at Ft. Worth, Tex., designed to build B-24 bombers from parts manufactured by Henry Ford in Ypsilanti, Mich.