Hughes, Howard

views updated May 23 2018

Hughes, Howard

(1905-1976)
Hughes Aircraft Company

Overview

Howard Hughes was one of the world's wealthiest men; he was also one of its most eccentric. After a flamboyant career as a Hollywood film director, Hughes indulged in his passion for flying by founding a company to manufacture innovative planes. He owned most of Trans World Airlines (TWA) until 1966. During the 1960s he invested in real estate, particularly in Las Vegas, where he owned, for example, the well known Sands Hotel. But drug addiction and deteriorating mental and physical health forced Hughes into seclusion, even from his own business associates. In the last years of his life he was in hiding from the world, plagued by strange obsessions. After living as a recluse for more than 20 years, Hughes left no direct heir to his substantial fortune.

Personal Life

Howard Robard Hughes, Jr., was an only child. His father had developed and patented an important oil drilling bit and founded the Hughes Tool Company. Hughes' mother died when he was 16, and when his father died three years later, he found himself sole heir to his father's industrial fortune. Hughes convinced a Texas court to declare him of legal age, and he took control of the family business. He married Ella Rice in 1925; they divorced four years later. During the 1930s and 1940s Hughes had many love affairs, some with prominent actresses. Then he married Jean Peters in 1957. That union was a marriage in name only, and they divorced in 1971. Having spent most of his final years addicted to drugs and avoiding publicity, Hughes died while in route from Acapulco, Mexico to a hospital in Houston.

Howard Hughes is remembered for his money and his eccentricity. In the early part of his career, he was known as a flamboyant daredevil. He was a man who had everything, and followed his dreams. He was a shrewd businessman, a movie maker, a pilot, and an inventor. The wealth he inherited as a youth allowed him to do far more than most people dream of. And he had an overwhelming desire to become a legend in his own time. He wanted to do more than anybody else did. This compulsion led him to test-fly the planes he built and direct the films he produced. He wanted to be viewed as a man who would succeed at whatever he attempted to do.

But as he became ill, Hughes felt he had to control everything in his life. Increasingly he lost touch with his grander schemes and focused on his immediate surroundings. His obsession with germs is legendary—having doors and windows sealed with tape, forcing attendants to follow daily rituals, and spreading paper towels on everything around him as a form of insulation—and is now considered a classic case of an obsessive-compulsive disorder. In the last 20 years of his life, Hughes was a prisoner of his obsessions.

Most of the empire Hughes presided over dissolved at his death. Because he left no will, the estate was tied up in litigation for years. Most of his money went to his arch enemy, the Internal Revenue Service (IRS). Concrete evidence surfaced after Hughes' death of his many underworld ties, both to the CIA and to the Mafia. He was involved in Watergate through secret contributions to the Nixon administration, and documents stolen from his California headquarters showed Hughes' intent to defraud, bribe, and intimidate in a variety of instances to promote his schemes.

Career Details

Howard Hughes was not a particularly strong student, though he did have considerable mechanical aptitude. Although he took courses at the Rice Institute in Houston and at the California Institute of Technology (Cal Tech), he never earned a bachelor's degree. Instead he left school to take over his family business at age 19. But Hughes apparently felt that he was not needed at Hughes Tools, and he soon left to embark on a career in Hollywood. Hughes was not an immediate success, but he persevered. Of his many accomplishments in the movie industry, some of the most-noteworthy were discovering Jean Harlow, introducing Jane Russell, and purchasing controlling interest in RKO Pictures Corporation. He produced and directed many films, some of the most successful ones being Hell's Angels, Two Arabian Knights, Scarface, and The Outlaw. During his years in Hollywood, Hughes was linked romantically to many women, among them Katharine Hepburn, Olivia DeHavilland, Lana Turner, Ava Gardner, and Ginger Rogers.

During his movie-making career, Hughes developed an interest in aviation. He received his first pilot's license in 1928. Shortly after receiving his license, he attempted to fly a Thomas Morse scout plane, a plane he had never flown before, and subsequently crashed. The legend of Howard Hughes states that he walked away from the crash unhurt, but as reported by Donald L. Barlett and James B. Steele in Empire: The Life, Legend, and Madness of Howard Hughes, "actually, Hughes was pulled unconscious from the crumpled plane, one cheekbone crushed. He spent days in hospitals and underwent facial surgery."

Hughes' fascination with planes led to his founding of the Hughes Aircraft Company in 1932. One of Hughes' dreams was to set aircraft records, and he did. He established several speed and endurance records in the 1930s. He set a world speed record in 1935, transcontinental speed records in 1936 and 1937, and a world flight record in 1938. In 1939 he began work on an experimental military aircraft, and in 1942 he received a contract to design and build the world's largest plane, a wooden seaplane, later nicknamed the "Spruce Goose," which was supposed to serve as a troop carrier in the second world war.

These successes enabled the Hughes Aircraft Company to become a major defense contractor after World War II. Working for the government proved quite profitable, but Hughes did not want to pay taxes on his earnings, so he created a sophisticated tax shelter, the non-profit Howard Hughes Medical Institute. Later he sold his home in Los Angeles to avoid paying California income tax.

Hughes wasn't only interested in military aircraft; he was involved in commercial airlines as well. In 1939 he first acquired stock in Transcontinental & Western Airlines—later named Trans World Airlines (TWA). By the end of the next year, Hughes owned 78 percent of the company. His large stake in the company sparked an antitrust suit in 1963. By that time, Hughes was so unwilling to show himself in public that he missed his court appearances. This led to a default ruling against him, and he was forced to sell his TWA stock. But Hughes used the $566 million accumulated from this sale to fund a new venture in Las Vegas real estate.

By the late 1960s Hughes' empire was one of the most powerful private political machines ever in operation in the United States. According to Barlett and Steele, "For more than two decades the IRS had granted it one special favor after another. So, too, had the Department of Justice, the Civil Aeronautics Board, the Department of the Interior, the army, the navy, the airforce, and any number of lesser agencies and departments." Hughes used money to get his way and avoid the laws and regulations that ruled other corporations. This network of connections was a mix of alliances, secret deals, understandings, and secret contributions. When Hughes started using drugs, however, he lost a good deal of control over the running of his businesses.

In 1970 Hughes lost control of his empire altogether. During the height of his power and control, nobody in his organization would do a thing without prior approval; now executives began to use his name freely and make decisions in his stead. Hughes was addicted to codeine, and his mental illness was becoming more and more apparent.

Behind the scenes, many of his associates were jockeying for position, attempting to gain control of Hughes' vast network of operations. Hughes eventually ended up assigning attorneys of his choosing as his proxies, giving them the power to do everything but sell the stock or change the names of his businesses. Having given up dayto-day control, Hughes secretly moved to the Bahamas. After this he lived in luxury hotels in several countries, always under conditions of extreme secrecy, until his death in 1976.

Chronology: Howard Hughes

1905: Born.

1908: Father filed patent for revolutionary oil-drilling bit.

1924: Acquired 100 percent control of Hughes Tool.

1938: Established new record for around-the-world flight.

1955: Sold RKO to General Tire for an estimated $25 million.

1966: Sold 6.5 million shares of TWA for $546 million.

1967: Acquired control of Desert Inn Hotel and Casino.

1972: Sold oil-tool division of Hughes Tool for $150 million.

1976: Died aboard airplane en route to Houston hospital.

Social and Economic Impact

Perhaps Howard Hughes' most lasting contribution was Hughes Aircraft, one of the most prominent defense manufacturers in the United States. The company was responsible for many innovative designs in weapons systems, missiles, satellites, and lasers. But Hughes Aircraft was badly managed, both during Hughes' lifetime and after his demise. Hughes' dictatorial meddling caused many of his leading executives to quit the company, and several of them went on to found rival companies. After Hughes' death, Hughes Aircraft continued to be a major industry player. But sloppy management led to costly and perhaps unsafe products. In 1984 the Department of Defense suddenly announced it would not take delivery on any more Hughes missiles, citing outrageous cost over-runs and shoddy quality control. A government audit revealed scores of abuses at the company, and it was quickly sold. General Motors ran it as GM Hughes Electronics—later named Hughes Electronics. By the late 1990s, Hughes Electronics had become the world's leading manufacturer of satellites.

Sources of Information

Bibliography

Barlett, Donald L. and James B. Steele. Empire: The Life, Legend, and Madness of Howard Hughes. New York: W.W. Norton & Company, 1979.

Brown, Peter Harry and Pat H. Broeske. The Untold Story of Howard Hughes. New York: Penguin, 1996.

Byers, Paula K. and Suzanne M. Bourgoin, eds. Encyclopedia of World Biography. Detroit: Gale Research, 1998.

Drosnin, Michael. Citizen Hughes. New York: Holt, Rinehart and Winston, 1985.

Phelan, James. Howard Hughes: The Hidden Years. New York: Random House, 1976.

Business Leader Profiles for Students

Hughes, Howard

views updated May 29 2018

Howard Hughes

Born: December 24, 1905
Houston, Texas
Died: April 5, 1976
Houston, Texas
American entrepreneur and inventor

Howard Hughes was a colorful and flashy businessman and inventor who used an inherited fortune to achieve a national reputation in the motion picture and aviation industries.

Childhood

Howard Robard Hughes was born in Houston, Texas, on December 24, 1905, the only child of Howard Robard Hughes and Alene Gano Hughes. His father earned millions by inventing special machinery for the oil industry. He attended private schools in California and Massachusetts and was very inventive as a child. At the age of twelve he made a radio transmitter out of an electric doorbell, and later he made a self-starting motor for his bicycle. At the age of fourteen he made his first airplane flight.

Hughes then attended the Rice Institute in Houston, and the California Institute of Technology. His mother died when Hughes was sixteen and his father just two years later, leaving him an orphan with an estate worth $871,000 and a patent (right to ownership) for a drill bit used in most oil and gas drilling that brought large revenues to the family's Hughes Tool Company, manufacturers of the bit.

The movie business

Hughes left school to take control of the company, using its profits to finance a variety of projects, which he hoped would make him a legend in his own time. In 1925, at age twenty, Hughes married Ella Rice and moved to Los Angeles, California, (they separated in 1928). In 1927 Hughes entered the motion picture business and produced such films as Scarface (1932), and The Outlaw (1941), and the box-office smash Hell's Angels (1930). He discovered actors Jean Harlow (1911–1937) and Paul Muni and made Jane Russell (1921–) a well-known star.

While living in Hollywood, California, the multimillionaire movie producer led a relatively quiet lifestyle. He lived in small apartments or rented homes and rarely participated in Hollywood's social world of the rich and famous.

Aviation

In 1928 Hughes obtained a pilot's license. His interest in aviation (flying) led him to found the Hughes Aircraft Company in Glendale, California, in 1932 and to design, build, and fly record-breaking airplanes. He set a world speed record in 1935, transcontinental (crossing a continent) speed records in 1936 and 1937, and a world flight record in 1938. Hughes was honored with the Harmon Trophy and a New York City ticker-tape parade after his world flight. He was awarded the Collier Trophy in 1939, the Octave Chanute Award in 1940, and a Congressional Medal in 1941.

In 1939 Hughes began work on an experimental military aircraft, and in 1942 he received a contract to design and build the world's largest plane, a wooden seaplane, later nicknamed the "Spruce Goose." It was supposed to serve as a troop carrier in World War II (1939–45).

Hughes suffered a nervous breakdown in 1944 and was critically injured in the crash of his experimental military plane in 1946, but he recovered and flew the huge seaplane the next year. As a result of these aviation activities, Hughes became a popular public figure because his image represented the traditional American qualities of individuality, daring, and imagination. He was named to the Aviation Hall of Fame in 1973.

The Hughes Aircraft Company became a major defense contractor after World War II. As the profits of the company increased, Hughes became obsessed with avoiding taxes and in 1953 created the Howard Hughes Medical Institute as a sophisticated tax shelter to which he transferred the profits of the aircraft company. In 1956 Hughes loaned $205,000 to future President Richard Nixon's (1913–1994) brother Donald in a successful effort to influence an Internal Revenue Service (IRS) ruling on the medical institute. Hughes made secret contributions of $100,000 to the successful Nixon presidential campaign in 1970 and was able to prevent enforcement of the Tax Reform Act against the medical institute. Hughes continued to use profits from the tool company for other ventures, including the creation of Trans World Airlines (TWA), in which he had begun investing in 1939.

Life in seclusion

In 1950 Hughes began a strange life of isolation, beginning a lifestyle which would ultimately turn him into a recluse (one who retreats from the world), although he did marry actress Jean Peters in 1957, divorcing her in 1971. Hughes refused to appear in court or even give a statement, and in a 1963 antitrust case over his ownership of 78 percent of TWA, his failure to appear resulted in a ruling that led him to sell his holdings in 1966. The $566 million received from this sale was invested by Hughes in hotels, gambling casinos, golf courses, a television station, an airport, and land in Las Vegas, Nevada. In 1972 the Hughes Tool Division, the basis of the Hughes fortune, was sold. The holding company was renamed Summa Corporation and its headquarters relocated to Las Vegas, where Hughes had moved his residence.

From this point on Hughes's career accomplishments were minimal. His obsession to control every aspect of his environment turned him into a recluse. He was seen only by a few associates and remained isolated from the operations of his company. In 1970 he left the United States, and moved from place to place—the Bahamas, Nicaragua, Canada, England, and Mexico. He always arrived unannounced in luxury hotels and took extreme precautions to ensure privacy. Hughes saw only a few male aides, worked for days without sleep in a black-curtained room, and became emaciated (thin from starvation) from the effects of his diet and the excessive use of drugs.

Hughes's concern for privacy ultimately caused controversy, resulting in a scandal over his supposed memoirs (writings of personal experiences) by author Clifford Irving that sold for $1 million before being proven to be fake. The Hughes conglomerate (a group of diverse businesses) became involved with the Central Intelligence Agency (CIA), and in 1975, built an undersea exploratory drilling ship which was actually used by the CIA to attempt to recover a sunken Soviet (Russian) submarine. The company retained a Washington, D.C., public relations firm that was also involved with the CIA, which led the Hughes corporation to become involved in the "Watergate" affair, a scandal that ultimately lead to the resignation of President Nixon in 1973.

Hughes died on April 5, 1976, on an airplane that was taking him from Acapulco, Mexico, to a hospital in Houston for medical attention. Hughes was controversial even after his death. Several wills appeared, one of which was found in the Mormon church in Salt Lake City, Utah, but all were later declared to be forgeries.