“These factors had made it impossible for anyone to make a successful business out of converting old bombers to useful civilian aircraft. But that was before Charles Ryterband persuaded his brother-in-law to try it.
“By the end of nineteen sixty-three Craycroft had blueprinted two complete redesigns-for the B-17 and the B-24-which for the first time showed how these models could be rebuilt for passenger and air-cargo use.
“Two prototypes were completed and flown in July, nineteen sixty-four. Performance and economy figures were analyzed. Craycroft made further adjustments in his designs, and in August the two planes were flown again. Ryterband and Craycroft pronounced them satisfactory, and the four-man sales force was sent out into the world to secure orders.
“Craycroft had achieved nearly the impossible. By the astute use of new lightweight metal alloys (very expensive but used sparingly) and the almost total redesign of the Wright engines, using the original engine blocks and essential parts, Craycroft had devised inexpensive ways to reduce the bombers’ fuel-consumption by more than one-half. Performance suffered to a remarkably small degree. The service ceiling was cut from thirty-five thousand feet to twenty-four thousand but for normal commercial purposes that was still ample. Top speed was reduced by more than forty mph, but cruising speed-the important element-was actually increased: to two hundred and thirty-five mph at ten thousand feet.
“In fact, the most extensive and costly part of the redesign program was neither in the power plants nor in the mechanical components of the airframes. It was in the field of comfort and convenience. By sealing windows, building an interior skin and installing recirculation and heating systems (most of them acquired from parts-dealers specializing in scrap components from obsolete ruined civilian planes), Craycroft succeeded in building modern heating and pressurization systems into these airplanes which had never been designed for them. This was the crucial item in the design, because it meant the planes now could be used to carry passengers or live-animal cargo in comfort.
“In many cases the original instrument systems had to be updated to meet the requirements of international and domestic regulations. Radio-navigation devices had to be incorporated, to supplant or replace the original gyrocompass and magnetic gauges. LORAN and communications systems had to be installed. Even radar was built into some of the later models.
“It was inevitable that the end result would be far more expensive than the restorations in which ACA had specialized before. These new cross-breed aircraft weren’t dirt-cheap. But they were competitive, and that was the important thing. Craycroft’s converted bombers had cargo and passenger capacities which compared with those of the secondhand DC-6s and Constellations, which airlines were selling in order to make way for their new jets. He was able to undersell the airlines by about thirty percent in purchase price-and this made his planes very attractive to charter airlines, small governments, and business concerns which didn’t need jet transports or gigantic machines.
“ACA’s first customers included the government of Morocco, three group-charter airlines in the United States and one in London, and a fruit-plantation company which owned several islands off the coast of eastern South America. The latter concern bought Craycroft’s planes for fast delivery of fresh fruit to Florida and Texas markets; they chose Craycroft’s planes over the competition because their runways on the islands were of limited length and the Craycroft planes required considerably less runway than did standard transports for landing and taking off.
“A Greek intranational feeder line bought three planes in nineteen sixty-five, and this purchase pumped enough capital into ACA to convince Ryterband and Craycroft that they had made the right decision. Construction and sales efforts were intensified; ACA’s Burbank facility was expanded onto a leasehold next door, and at considerable expense the old buildings there were razed to make way for enlargement of the assembly shops and offices.
“Given Craycroft’s track record as a businessman, however, it was inevitable that a fly settle in the ointment.
“According to recent testimony by Fredric Phelps (then office-manager and treasurer of ACA), ‘We never had anything much better than a rickety jerry-built financial structure.’ Craycroft and Ryterband had built the initial company on investment capital they had raised by selling stock to four motion-picture producers. Each of the four producers had been in preproduction with war movies at the time. For the first few years the relationship between ACA and the four producers had been successful and symbiotic. But the producers were no longer making war movies. (One of them, in fact, was no longer in the film business at all.) ‘And ACA was no longer a Hollywood outfit,’ Phelps recalls. ‘I guess they felt they had no further reason to go on lending us the support and encouragement of the movie community.’
“To build the company in the first place, Craycroft and Ryterband had made an initial stock tender of ten thousand shares. By the time they got done raising capital, they ended up-between them-owning only twenty-six percent of the company. The remaining seventy-four percent belonged to the four producers.
“But the bylaws and articles of incorporation of ACA’s charter had left operational corporate decisions to the absolute authority of Craycroft and Ryterband so long as they, between them, controlled more stock than any other single stockholder.
“Since the company’s inception it had been the policy of the brothers-in-law to plow profits back into the company. By nineteen sixty-seven ACA had sold or contracted more than seventy converted bombers. In small-business terms they were doing a tremendous volume, considering that each sale meant gross receipts from forty thousand dollars up. But the large expansion of facilities between nineteen sixty-five and sixty-six still hadn’t been paid off, and operating expenses were climbing because of inflation and labor costs.
“By 1968 the producers were arguing that business was falling off because of the increasing obsolescence of propeller-driven aircraft. The world was well into its second and even third generation of jet passenger and cargo planes. Even the smaller countries and businesses were buying jets now. The invention of new, economical jets like the Lear and the Boeing 727 had made a large competitive dent in the market that had previously been dominated by the venerable DC-3 Dakota and the Craycroft conversions.
“Phelps recalls, ‘Back at the beginning, when we were doing mainly mock-ups and restorations for air-war movies, there was a time when I tried to persuade Harold and Charlie to restructure the financial setup. They could have gone public even then. It was a sound operation. It was making good money. If they’d gone public, they’d have ended up in absolute control of the company, with very little additional investment of their own. Or, I told them, they had the alternative of buying out a couple of the producers. If they’d bought that stock back then, they could have got it for ten bucks a share, and they’d have ended up owning more than fifty-one percent of ACA.
“‘But I couldn’t talk them into it. They didn’t want to go public because they didn’t want to hassle with the SEC and all that crap-they were both kind of naive, they didn’t want to get mixed up in the big bad world of high finance. And they didn’t want to buy out any of the other stockholders because that was money they’d rather plow back into the company to keep expanding. Hell, you couldn’t help seeing the handwriting on the wall.’
“The four producers soon reached loggerheads with the brothers-in-law; and a relationship that had begun at arm’s length ended up at sword’s point.