C. R. Smith - Business Career

Business Career

Born in Minerva, Texas, Smith attended the University of Texas despite never having graduated from high school. Upon graduation, Smith worked as an accountant for the accounting firm of Peat Marwick Mitchell and later ran a number of businesses, including a Western apparel store and a firm that sold state records of new mothers to manufacturers of baby supplies. He joined Southern Air Transport as a vice president in 1929, and through a series of mergers SAT became part of American Airlines. In 1934, he became president of American Airlines.

In business, he was known for an informal, no-nonsense leadership style that stressed close relationships with both executives and employees. Convair president Jack Naish noted that "you can close a $100 million deal on his word alone." He generally communicated through personally typed one-page memos. Smith was said to know every American employee by name until the end of his first term as CEO. He fostered a close relationship with Douglas Aircraft that led American to become a key adopter of the Douglas DC-3 and DC-6: he was also one of the early proponents of what is now LaGuardia Airport in New York City.

One of Smith's most famous acts was the publication of an advertisement entitled "Why Dodge This Question: Afraid To Fly?" in 1934. Airline safety had been a taboo subject at the time, and Smith was credited with being the first airline manager to discuss it openly with the public.

During World War II, Smith left American to become a colonel in the United States Army Air Forces, eventually rising to the rank of major general in the Air Transport Command; he immediately left the AAF in 1945 and returned to his airline.

Following the war, Smith dabbled in international air travel through American Overseas Airlines. He also set up the Admirals Club, the first airline lounge system. In the 1950s, he helped American become the first domestic jet carrier in the US by selecting the Boeing 707 aircraft, which came out months before its rival Douglas DC-8.

He was instrumental in the mandatory retirement age provision for airline pilots or "Age Sixty Rule". He attempted to enforce a company policy of that at American Airlines in the 1950's, when younger pilots were getting out of the Air Force and Navy after Korea. He felt that the senior pilots were too highly paid, and replacing them with younger, lower paid ones, would be economically advantageous to the company. The older pilots working for American took him to court and won, but when Eisenhower appointed Elwood R.Quesada as the first administrator of the FAA (the three knew each other from WWII, all were generals), one of Quesada's first actions was to declare the age sixty retirement as regulatory. There was never any scientific study or even data to back up such an action, but it rather helped out Smith's plan.

Smith left American in 1968. He returned in 1973 following a period of corporate mismanagement and scandal, although he retired again less than a year later, stating that he was "working in a 747 era with a DC-6 state of mind." In 1976, Smith was the recipient of the Tony Jannus Award for his distinguished contributions to commercial aviation.