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Hughes Tool Company
Hughes Tool Company was an American manufacturer of drill bits. Founded in 1908, it was merged into Baker Hughes Incorporated in 1987.
The company was established in December 1908 as Sharp-Hughes Tool Company when Howard R. Hughes Sr. patented a roller cutter bit that dramatically improved the rotary drilling process for oil drilling rigs. He partnered with longtime business associate Walter Benona Sharp to manufacture and market the bit. Following her husband's death in 1912, Sharp's widow Estelle Sharp sold her 50% share in the company to Howard Hughes Sr. in 1914. The company was renamed Hughes Tool Company on February 3, 1915.
After Hughes Sr. died of a heart attack in 1924, his son Howard Hughes [Jr.] inherited the majority interest in the company, and then convinced his relatives to sell their shares to him as well. Legally emancipated at the age of 18, Howard began using the profits from Hughes Tool to fund his other ventures. The company paid Hughes an annual salary of $50,000, and Hughes charged all major expenses such as planes, automobiles, and houses, to the company. In 1937, Hughes used Hughes Tool to buy a controlling interest in TWA.
In 1932, Hughes formed Hughes Aircraft Company as a division of the Hughes Tool Company. Hughes Aircraft thrived on wartime contracts during World War II (though not on the only two contracts it received to actually build airplanes), and by the early 1950s was one of America's largest defense contractors and aerospace companies with revenues far outpacing the original oil tools business. In 1953, Hughes Aircraft became a separate company and was donated to the Howard Hughes Medical Institute as its endowment. Hughes Aircraft's helicopter manufacturing business was retained by Hughes Tool Co. as its Aircraft Division until 1972.
At the end of Prohibition in the United States, Hughes agreed to construct a brewery on company property. Gulf Brewing Co. brewed Grand Prize beer for a number of years.
For a period of time in the 1940s to late-1950s, Hughes Tool owned the RKO companies, including RKO Pictures, RKO Studios, RKO Theatres, and the RKO Radio Network.
In 1946, Hughes gave Noah Dietrich "full charge at Toolco." Dietrich hired Fred Ayers to bring order to the production line, and Dietrich invested more than $5,000,000 of the company reserves modernizing the plant. Automation replaced handiwork, and the company standardized on drill bit sizes, while embarking on an advertising campaign. The company also opened plants in Ireland and West Germany, taking advantage of cheaper labor, and lower transportation costs to clients in Saudi Arabia and Russia. Profits for the next 8 years amounted to $285,000,000.
During the early 1960s, a wholly owned subsidiary Hughes Dynamics was created, that offered consulting and services in data processing, information technology, credit information processing, and advanced business techniques and management methods. After some $9.5 million of Hughes Tool money was invested in it, results were deemed not acceptable, and it was quickly shut down.
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Hughes Tool Company
Hughes Tool Company was an American manufacturer of drill bits. Founded in 1908, it was merged into Baker Hughes Incorporated in 1987.
The company was established in December 1908 as Sharp-Hughes Tool Company when Howard R. Hughes Sr. patented a roller cutter bit that dramatically improved the rotary drilling process for oil drilling rigs. He partnered with longtime business associate Walter Benona Sharp to manufacture and market the bit. Following her husband's death in 1912, Sharp's widow Estelle Sharp sold her 50% share in the company to Howard Hughes Sr. in 1914. The company was renamed Hughes Tool Company on February 3, 1915.
After Hughes Sr. died of a heart attack in 1924, his son Howard Hughes [Jr.] inherited the majority interest in the company, and then convinced his relatives to sell their shares to him as well. Legally emancipated at the age of 18, Howard began using the profits from Hughes Tool to fund his other ventures. The company paid Hughes an annual salary of $50,000, and Hughes charged all major expenses such as planes, automobiles, and houses, to the company. In 1937, Hughes used Hughes Tool to buy a controlling interest in TWA.
In 1932, Hughes formed Hughes Aircraft Company as a division of the Hughes Tool Company. Hughes Aircraft thrived on wartime contracts during World War II (though not on the only two contracts it received to actually build airplanes), and by the early 1950s was one of America's largest defense contractors and aerospace companies with revenues far outpacing the original oil tools business. In 1953, Hughes Aircraft became a separate company and was donated to the Howard Hughes Medical Institute as its endowment. Hughes Aircraft's helicopter manufacturing business was retained by Hughes Tool Co. as its Aircraft Division until 1972.
At the end of Prohibition in the United States, Hughes agreed to construct a brewery on company property. Gulf Brewing Co. brewed Grand Prize beer for a number of years.
For a period of time in the 1940s to late-1950s, Hughes Tool owned the RKO companies, including RKO Pictures, RKO Studios, RKO Theatres, and the RKO Radio Network.
In 1946, Hughes gave Noah Dietrich "full charge at Toolco." Dietrich hired Fred Ayers to bring order to the production line, and Dietrich invested more than $5,000,000 of the company reserves modernizing the plant. Automation replaced handiwork, and the company standardized on drill bit sizes, while embarking on an advertising campaign. The company also opened plants in Ireland and West Germany, taking advantage of cheaper labor, and lower transportation costs to clients in Saudi Arabia and Russia. Profits for the next 8 years amounted to $285,000,000.
During the early 1960s, a wholly owned subsidiary Hughes Dynamics was created, that offered consulting and services in data processing, information technology, credit information processing, and advanced business techniques and management methods. After some $9.5 million of Hughes Tool money was invested in it, results were deemed not acceptable, and it was quickly shut down.
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