Profit and Loss

CCLXIX

Two things happened just as Juan Trippe settled back into his role as virtual monarch of Pan American Airways. Both cemented his position as the company’s autocrat. 

First off, the airline posted an impressive profit of almost two million dollars (equivalent to over 36 million 2018 dollars) in the first quarter of 1940. At last, Trippe’s heavy, bank-breaking investment in equipment, infrastructure, and marketing finally began to pay off. He was suddenly a hero to the Board of Directors who turned from adversaries to toadies as soon as their dividends were paid. Sonny Vanderbilt got no credit for the turnaround.

The Pan American marker in Horta, Azores

Second, there was an accident in Horta when a big new Boeing belly-flopped into the harbor, causing extensive structural damage to the flying boat. The flight happened to be full of journalists and the journalists were full of whiskey, so the accident was downplayed --- especially when a second flying boat was dispatched immediately from New York to fly them home. Still, the accident highlighted a serious design problem. Although the rather ungainly B-314 flew majestically, its landing and takeoff and water taxiing characteristics had been causing the pilots concern. The airflow above and water flow below the big sponsons made the flying boat dangerously unstable at about 200 m.p.h. on the water, a number too close for comfort to its liftoff speed “on the step.” The flaw was corrected by redesigning the aft belly of the beast, fixed one plane at a time, and logged as routine maintenance by Trippe’s orders. The public, and indeed most Pan American employees, never came to know how potentially dangerous the B-314 had been. Trippe garnered Boardroom praise for his cool handling of what might otherwise have been a public relations disaster. 

His power assured, Trippe began going after his perceived enemies within the Pan Am corporate structure. Anyone who had treated Sonny Vanderbilt with the deference his title deserved became a marked man. 

There was no purge, no bloodbath in the Chrysler Building. Few people were fired outright. Instead, Trippe’s targets, regardless of title or past history, simply ceased to matter within the organization. Trippe ignored them to death. With no access to Trippe more than one high-level executive rotted on the vine. 

Comptroller J.H. Johnston, who had been with Trippe since the Key West days, was sent to Dinner Key as a bookkeeper. Hugo Leuteritz, who had invented Pan Am’s Radio Direction Finder, was sent down to the Maintenance Division. He quit not long afterward. Andre Priester, his mentor and one of Trippe’s closest and oldest associates, was bypassed in the chain of command. Although Priester retained his title and his salary, his job became a sinecure. A few lesser people were transferred hither and yon to remote Pan American Airways outposts where they, like Miss Havisham’s wedding cake, ended up covered in dust and cobwebs.  

More than one Board member fled. As for Sonny himself, he sold his Pan American stock and resigned as CEO just after Pearl Harbor. During the war he remained, as might be expected, involved in aviation, joining the Army Air Forces in 1941 (ranked a Colonel). After the war he became Assistant Secretary of the Air Force and later held other appointed positions at the pleasure of several Presidents. But he never mended his breach with Juan Trippe.