Cover Story - May 3, 2006

Cover story: Stanley Hiller: Nice guy finishes first

Stanley Hiller of Atherton made history in aviation and a mark as a corporate-turnaround artist; yet his employees were his biggest fans

by John F. Straubel

From teenage aviation genius to rescuer of failing corporations, Stanley Hiller of Atherton, who died April 20 at age 81, made a life of his career and a family of his employees.

In 1942, Stan Hiller's employees were 14- and 15-year-old kids. They were the production line of a $100,000 business, making gas-engine-powered toy race cars out of a barn behind his parents' Berkeley home. Nation's Business magazine called him the "Henry Ford of the Spindizzies." He was 17.

Before leaving his teens, the inventor-entrepreneur was in Time and Life, and many other magazines that reveled in boy-genius stories.

In those days, as in the last years of his six-decade career, Stanley Hiller was all business, intensely focused, and consumed by the vision thing. Pageant magazine observed in 1946: "He is so utterly humorless that he never makes a joke and looks bewildered when anyone else does."

Yet the young Hiller came to be adored by people who worked under his scrawny wings. This week, Almanac reporter Marion Softky, who'd written about Hiller in the past, mused: "It's a wonder how such a nice guy achieved so much in that tough business world."

After a half-century of working with him, my guess is Marion's question contains an answer: It was his palpable respect for people and their ideas that motivated so many to perform for him.

As hundreds of former employees and cohorts will agree, Stan Hiller's life debunks the adage about nice guys finishing last. If he were here today, he'd warn his old PR man about overstatement. Sorry, boss; I did it again.

Bill McSherry, a former Woodside councilman, and the man who diagnosed the potential of companies Hiller sought to turn around, said when he heard of his buddy's death April 20: "Stan taught me how to live with possibility — something I just would not have learned that well on my own."

In Hiller's enterprises — from Hiller Aircraft Corp. in Palo Alto during the 1950s and 1960s, to his corporate turnaround projects in the 1990s — we Hillerites acquired our vision of what American enterprise can be. It's governed my own career.

Stan impressed on us the dangers of corporate greed. He was an early opponent of board chairmen and CEOs being the same person, and of what he called the "feudal system at the top." He once told me as he drove at his characteristic terrifying speeds to Dulles airport: "If the country can't trust corporate managements to respect and give back to the system, then the market system won't work, and there'll be a period of precipitous socialistic legislation." He would have hated that.

Like father

Stanley Hiller Jr. was born in 1924 in Berkeley to Stanley and Opal. Dad was an engineer and dedicated inventor, building and flying his own airplane in 1910 at age 20. When son Stanley was asked by a reporter years later how he had achieved so much in so few years, the 23-year-old replied: "I was fortunate in my choice of a father."

At age 8, Stanley connected an old family washing machine engine to a home-made buggy frame and was seen driving it recklessly on neighborhood sidewalks. Before he was 10, he learned to fly, sitting in his father's lap in a small cockpit.

Frustrated with building powered model planes that consistently crashed, he applied one of their tiny gas engines to a model racing car. It was a starting point in the boy's career: he was soon selling 250 Comets a month to department stores.

With some help from his father and a draftsman, he invented a die-casting machine based on a cooling process that increased the strength of aluminum castings for the Comet. The result was clearly an improvement in casting state-of-the-art.

Stanley had finished high school at 16 despite these extracurricular activities in his life, and entered the University of California at Berkeley. With America now in World War II, the U.S. military "discovered" the young entrepreneur-inventor — not as a draftee — but as a resource for aluminum fighter-plane parts. Although major aircraft builders hesitated signing subcontracts with a schoolboy, Hiller Industries was soon working seven casting machines in two shifts, generating a $300,000-a-year payroll.

Young Stan had earlier read about Igor Sikorsky's experiments with helicopters, noting that the first vehicles were compromised by inherent instability. "I have ideas about how to correct that," the boy told his father, who in turn suggested he try out the ideas in some hardware.

Stanley's concept seemed to work when he dropped a miniature helicopter from his father's ninth-story office window. Schoolmates cheering below were now witnessing the birth of a new era in aviation.

Making history

As a freshman at Berkeley, he was consumed with visions about vertical flight and preoccupied with his aluminum casting business. Having met at Berkeley the love of his life, Carolyn Balsdon, there was clearly too much going on to continue college. He was out after a year. He married Carolyn when they were both 22. They moved into their current Atherton home in 1951.

Teaming with a draftsman, a welder and an auto mechanic, 17-year-old Stanley set about designing and building a full-scale helicopter. The design was discouraged at first by Army officials to whom he showed it. Higher authorities in Washington, D.C., however, not only permitted his proposed XH-44 helicopter to be finished, but granted Stanley a temporary deferment from World War II's draft.

On the flight back to California, he found he was seated across the aisle from the famed Charles Lindbergh. They spoke only briefly, but young Hiller felt it was a good omen.

In 1944, Stan had completed the first successful flight of a helicopter in the western United States. He flew his yellow fabric-covered contraption himself, although he had never flown a helicopter nor seen one fly.

Later, in August of that year, Hiller demonstrated the XH-44 at San Francisco's Marina Green, where a plaque today commemorates the 20-year-old's historic flight. The event propelled him into international headlines. He became the youngest person ever to receive the coveted Fawcett Aviation Award for major contributions to the advancement of aviation.

Eventually, the little co-axial XH-44 "Hiller-Copter" would become a permanent exhibit at the Smithsonian's National Air & Space Museum.

Hiller 360

Now Hiller's goal was no less than a new age of commercial vertical flight, starting hopefully with the Hiller "Commuter" helicopter. Soon his single-rotor-plus-tailrotor configuration achieved remarkable stability with a simple and direct parts arrangement of his design that recaptured the attention of the aviation world.

It was upon this design platform that began the Hiller ascendance to one of the few full-production helicopter companies in the world. The "Hiller 360" was the third helicopter qualified by the Civil Aeronautics Administration in U.S. history.

The stable reliability of the 360 in commercial utility jobs resulted in the helicopter's recruitment as a medical evacuation vehicle in the French Indochinese war starting in 1949. The UH12-360 became the first light helicopter applied to that task under jungle warfare conditions.

When the Korean Conflict broke out in 1950, the U.S. Army visited upon Hiller a sudden onslaught of Army orders and in months, Hiller Aircraft was delivering a helicopter each day for the Korean battlefronts.

But Hiller's prolific contribution to vertical flight technology is what came to differentiate the company in succeeding years.

While happily buying into the Army H-23 series as the first helicopter of any type to be approved to fly 1,000 hours between overhauls, military services were coming to depend on Hiller staff to convert desires into successful flying hardware.

American military planners had learned in Korea that its troops were at a disadvantage in guerrilla warfare, and would need specialized air vehicles to gain mobility and stealth. Hiller saw in it a market that would elevate the company to be an essential source of tactical solutions.

By 1951 Hiller was flying a two-place "Hornet" powered by ramjets in rotor-blade tips.

Another innovation — the Hiller "Flying Platform" — put a pilot on a platform above ducted propellers, giving him the power to climb straight up, hover and dart. The pilot simply leaned in the direction he wanted to go, freeing both arms to fire a rifle or take photographs of ground emplacements.

In 1954, an evaluation fleet of Hiller XROE-1 one-man foldable "Rotorcycles" was flying for the services in weather given a wide berth by full-grown helicopters.

In 1956 Hiller chose a daring step for his Palo Alto company: development of a high-speed vertical takeoff transport turboprop airplane. Given its "operate anywhere" capability by a tilting wing and engine package, the plane would fly at four times the speed of helicopters and deposit troops and equipment into battlefields.

The test bed for this transport — Hiller's X-18 — was made of pirated engines and fuselage parts, and was at times scary as hell, but the 17-ton plane managed to complete test flights at Edwards Air Force Base in 1959-60, and justify production of an evaluation fleet of Air Force tilt-wing XC-142 transports by the consortium of Hiller, Chance-Vought and Ryan.

Challenged in jungle and aircraft carrier tests, the XC-142 made the point — as did all Hiller's experimental hardware surprises: they did what they were supposed to do, without the accidents that often characterize new concepts. It was the cut-and-try period of vertical flight aviation, characterized by predictions of things to come.

There were only a few companies willing to cope with that uncertainty. Hiller thrived on it.

Back from the future

Predictive of his oncoming career as a corporate turnaround specialist, Stanley Hiller was asked in the mid-1960s when he was president of the U.S. Army Aviation Association, to describe how he managed people to perform in that environment of possibility.

Hiller's "Art of Looking Backward from the Future" eschewed the common way of advancing technology based on the rate of existing progress. His technique was to choose — for any technology — the ideal future goal, and from that goal draw a performance timeline back to the present. Establishing individual roles in the timeline embodied Hiller's management technique.

"That way," he was fond of saying, "each person owns the plan."

In 1968, merging Hiller Aircraft into what became Fairchild Hiller Corp., Stan Hiller left aviation to open the Hiller Group. Its purpose was to bring together his associate managers and directors to revitalize companies with large asset bases not being employed effectively.

Asked if he was entering the venture capital field, Hiller replied: "We roll up our sleeves and get into the companies, so we are not passive investors. I become chairman or CEO, and don't take any money until the corporate patient has a turnaround, and its shareholders realize promised returns."

Following this singularly personal approach, and backed by a reservoir of strong managers eager to participate in such non-hostile corporate rebuilds, the Hiller Group launched a 20-year progression of spectacular turnarounds, among them mini-conglomerate G.W. Murphy Industries and Reed Tool Co.

Bekins — the nation's largest moving and storage company — was rebuilt, reversing 20 years of decline. Later, energy giant Baker International was redirected into a strategic combination with its arch-rival Hughes Tool Co.

One of Stan Hiller's most successful turnarounds came near the end of his career. In his 60s when most people think retirement, he persuaded Borg-Warner's directors to spin off its unprofitable York International, one of the world's largest air conditioning firms, which he took charge of as CEO.

"The challenges are intimidating," Business Week reported at the outset. Borg-Warner Vice President Donald Trauscht said: "I sincerely doubt we would be doing this with anybody else. ... In all my years in business ... I've never run into anyone like Stan."

A year after Hiller took the helm of the floundering company he affectionately called "Yorkie," the company posted a five-fold increase in profits, a 130 percent rise in stock price, and a stable employment.

Through my years with Stan, I came to realize he was never preoccupied by a particular industry or product, even though he always seemed to be. He once startled a reporter saying he hadn't even cared that much about aviation. He just saw it as a new opportunity in those early days.

That might shock former Hiller Aircraft employees who cherished their nearly 40 years of annual reunions after Hiller closed in Palo Alto.

What he loved, I concluded, wasn't the helicopters. He loved the people. They were his family.

In his 78th year, Stanley Hiller was awarded Smithsonian's 2002 National Air and Space Museum Trophy for Lifetime Achievement: a "distinguished career as a leader in aviation innovation and excellence."

That year also, his aviation community in California honored his lifelong contribution to the progress of aviation with its Medal of Achievement, presented by the San Francisco Aeronautical Society.

The late Bill Bronson, writer and founder of the environmentalist publication California Tomorrow, and a passionate liberal who was once a publication manager for Hiller Aircraft, knew his former boss was a philosophical conservative. But near the end of his own life, Bronson asked me: "How is Stan Hiller? I adored that man!"

Memorial service at aviation museum

A memorial service for Stanley Hiller Jr. of Atherton, who died April 20 at age 81 from complications of Alzheimer's disease, will be held at the Hiller Aviation Museum at 1 p.m. Friday, May 5.

The museum, which the helicopter pioneer founded in 1998, is at the San Carlos Airport at 601 Skyway Road.

Mr. Hiller considered his investment in the museum and its affiliated aviation research institute as his contribution to the community that nurtured his own success, says longtime associate John Straubel.

"Exhibited there are the often unheralded achievements in aviation technology by Americans of the West, some even before the Wright brothers," said Mr. Straubel. "The museum and institute also embodies Mr. Hiller's interest in transportation's future."

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Posted by Shannon Borri, a resident of another community
on May 5, 2008 at 7:15 am

I own a Hiller Comet that still runs today as it did for my father, I'am 62 years young. God bles the man!

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