Hughes Tool Company
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Hughes Tool Company was an American manufacturer of drill bits. Founded in 1908, it was merged into Baker Hughes Incorporated in 1987.


History

The company was established in December 1908 as Sharp-Hughes Tool Company when Howard R. Hughes Sr. patented a roller cutter bit that dramatically improved the rotary
drilling Drilling is a cutting process where a drill bit is spun to cut a hole of circular cross-section in solid materials. The drill bit is usually a rotary cutting tool, often multi-point. The bit is pressed against the work-piece and rotated at ra ...
process for oil
drilling rig A drilling rig is an integrated system that drills wells, such as oil or water wells, or holes for piling and other construction purposes, into the earth's subsurface. Drilling rigs can be massive structures housing equipment used to drill wat ...
s. He partnered with longtime business associate
Walter Benona Sharp Walter Benona Sharp (12 December 1870 - 28 November 1912) was an American oilman and innovator in drilling techniques. Early life Sharp was born in Tipton County, Tennessee to James R. and Amanda Forrest Sharp. His mother died when he was eight an ...
to manufacture and market the bit. Following her husband's death in 1912, Sharp's widow Estelle Sharp sold her 50% share in the company to Howard Hughes Sr. in 1914. The company was renamed Hughes Tool Company on February 3, 1915. After Hughes Sr. died of a heart attack in 1924, the younger Howard inherited the majority interest in the company, and then convinced his relatives to sell their shares to him as well. Legally emancipated at the age of 18, Howard began using the profits from Hughes Tool to fund his other ventures. Toolco paid Hughes an annual salary of $50,000, and Hughes charged all major expenses such as planes, automobiles, and houses, to the company. In 1937, Hughes used Hughes Tool to buy a controlling interest in
TWA Trans World Airlines (TWA) was a major American airline which operated from 1930 until 2001. It was formed as Transcontinental & Western Air to operate a route from New York City to Los Angeles via St. Louis, Kansas City, and other stops, with ...
. In 1932, Hughes formed
Hughes Aircraft Company The Hughes Aircraft Company was a major American aerospace and defense contractor founded on February 14, 1934 by Howard Hughes in Glendale, California, as a division of Hughes Tool Company. The company was known for producing, among other produ ...
as a division of the Hughes Tool Company. Hughes Aircraft thrived on wartime contracts during World War II (though not on the only two contracts it received to actually build airplanes), and by the early 1950s was one of America's largest defense contractors and aerospace companies with revenues far outpacing the original oil tools business. In 1953, Hughes Aircraft became a separate company and was donated to the
Howard Hughes Medical Institute The Howard Hughes Medical Institute (HHMI) is an American non-profit medical research organization based in Chevy Chase, Maryland. It was founded in 1953 by Howard Hughes, an American business magnate, investor, record-setting pilot, engineer, fil ...
as its endowment. Hughes Aircraft's helicopter manufacturing business was retained by Hughes Tool Co. as its Aircraft Division until 1972. At the end of
Prohibition in the United States In the United States from 1920 to 1933, a Constitution of the United States, nationwide constitutional law prohibition, prohibited the production, importation, transportation, and sale of alcoholic beverages. The alcohol industry was curtai ...
, Hughes agreed to construct a brewery on company property. Gulf Brewing Co. brewed Grand Prize beer for a number of years. For a period of time in the 1940s to late-1950s, Hughes Tool owned the RKO companies, including
RKO Pictures RKO Radio Pictures Inc., commonly known as RKO Pictures or simply RKO, was an American film production and distribution company, one of the "Big Five" film studios of Hollywood's Golden Age. The business was formed after the Keith-Albee-Orphe ...
, RKO Studios, RKO Theatres, and the
RKO Radio Network The RKO Radio Network, a subsidiary of RKO General, was the first commercial radio network to distribute programming entirely by satellite. When it began operations on October 1, 1979, the initial RKO network was the first new full-service Ameri ...
. In 1946, Hughes gave
Noah Dietrich Noah Dietrich (February 28, 1889 – February 15, 1982) was an American businessman, who was the chief executive officer of the Howard Hughes business empire from 1925 to 1957. (Even though these dates have been recorded as the official period of e ...
"full charge at Toolco." Dietrich hired Fred Ayers to bring order to the production line, and Dietrich invested more than $5,000,000 of the company reserves modernizing the plant. Automation replaced handiwork, and the company standardized on drill bit sizes, while embarking on an advertising campaign. The company also opened plants in Ireland and West Germany, taking advantage of cheaper labor, and lower transportation costs to clients in Saudi Arabia and Russia. Profits for the next 8 years amounted to $285,000,000. During the early 1960s, a wholly owned subsidiary
Hughes Dynamics Hughes Dynamics, Inc. was an American computer firm that was a wholly owned subsidiary of the Hughes Tool Company. It existed from 1962 to around 1965. It offered consulting and services in data processing, information technology, credit informati ...
was created, that offered consulting and services in data processing, information technology, credit information processing, and advanced business techniques and management methods. After some $9.5 million of Hughes Tool money was invested in it, results were deemed not acceptable, and it was quickly shut down. For a brief period in the early-1960s, Hughes Tool held a minority stake in
Northeast Airlines Northeast Airlines was an American airline based in Boston, Massachusetts that chiefly operated in the northeastern United States, and later to Canada, Florida, the Bahamas, Los Angeles and other cities. It was acquired by and merged into Del ...
. Hughes Tool's majority stake in TWA was sold off in 1966. Two years later, in 1968, Hughes Tool Company purchased the North Las Vegas Air Terminal. In the late-1960s, Hughes Tool ventured into the hotel and casino business with the acquisition of the Sands,
Castaways A castaway is a person cast adrift or ashore. Castaway or Cast Away may also refer to: Literature * "The Castaways" (short story), P.G. Wodehouse * ''Castaway'' (book), a 1984 memoir by Lucy Irvine *''The Castaway'', Hallie Erminie Rives's 1904 ...
,
Landmark A landmark is a recognizable natural or artificial feature used for navigation, a feature that stands out from its near environment and is often visible from long distances. In modern use, the term can also be applied to smaller structures or f ...
,
Frontier A frontier is the political and geographical area near or beyond a boundary. A frontier can also be referred to as a "front". The term came from French in the 15th century, with the meaning "borderland"—the region of a country that fronts o ...
,
Silver Slipper The Silver Slipper was a casino in Paradise, Nevada, that operated from September 1950 to November 29, 1988. The building was designed by architect Martin Stern, Jr. History Opened in 1950, the casino was built on the grounds of the Last Fron ...
, and Desert Inn, all in
Las Vegas Las Vegas (; Spanish for "The Meadows"), often known simply as Vegas, is the 25th-most populous city in the United States, the most populous city in the state of Nevada, and the county seat of Clark County. The city anchors the Las Vegas ...
. Hughes Tool also purchased
KLAS-TV KLAS-TV (channel 8) is a television station in Las Vegas, Nevada, United States, affiliated with CBS and owned by Nexstar Media Group. The station's studios are located on Channel 8 Drive near the northern portion of the Las Vegas Strip in the u ...
, Las Vegas'
CBS CBS Broadcasting Inc., commonly shortened to CBS, the abbreviation of its former legal name Columbia Broadcasting System, is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainm ...
affiliate. In the early-1970s, Hughes Tool ventured back into the airline industry with the takeover of the largest regional air carrier in the western United States: Air West, renamed
Hughes Airwest Hughes Airwest was a regional airline in the western United States, backed by Howard Hughes' Summa Corporation. Its original name in 1968 was Air West and the air carrier was owned by Nick Bez. Hughes Airwest flew routes in the w ...
following the purchase. Hughes Tool also briefly owned
Los Angeles Airways Los Angeles Airways (LAA) was a helicopter airline founded in October 1947 and based in Westchester, Los Angeles, Westchester, California, which offered service to area airports throughout Southern California. History Los Angeles Airways comme ...
, a small airline operating a commuter service with a fleet of helicopters. In 1968, Hughes Tool purchased Sports Network Incorporated and renamed it the
Hughes Television Network HTN Communications, better known as Hughes Television Network (HTN) and formerly Sports Network, was an American television network created by Richard Eugene Bailey. The company is now in the business of providing video and audio services to spo ...
, with Dick Bailey continuing as president. The huge main plant for Hughes Tool located in
Houston Houston (; ) is the most populous city in Texas, the most populous city in the Southern United States, the fourth-most populous city in the United States, and the sixth-most populous city in North America, with a population of 2,304,580 in ...
, Texas, fronting Harrisburg Blvd., had grown to be one of the biggest oil tool manufacturers in the world. It had the latest, largest, and most automated equipment for foundries, forging, heat treating, and machining anywhere. At its peak during the
Texas oil boom The Texas oil boom, sometimes called the gusher age, was a period of dramatic change and economic growth in the U.S. state of Texas during the early 20th century that began with the discovery of a large petroleum reserve near Beaumont, Texas. T ...
, it was a center for manufacturing, design, research, metallurgy, and engineering for oil field technologies. This included the
drill bit (well) In the oil and gas industry, a drill bit is a tool designed to produce a generally cylindrical hole ( wellbore) in the earth’s crust by the rotary drilling method for the discovery and extraction of hydrocarbons such as crude oil and natural ga ...
and tool joint product lines critical for oil and gas drilling, some of the first technologies for ram blast bits for drilling in mines,
geothermal drilling A ground source heat pump (also geothermal heat pump) is a heating/cooling system for buildings that uses a type of heat pump to transfer heat to or from the ground, taking advantage of the relative constancy of temperatures of the earth through ...
, and a hydraulic powered
jackhammer A jackhammer (pneumatic drill or demolition hammer in British English) is a pneumatic or electro-mechanical tool that combines a hammer directly with a chisel. It was invented by William Mcreavy, who then sold the patent to Charles Brady Kin ...
known as the Hughes Impactor. It also manufactured a line of truck and crane-mounted earth augering machines ("diggers") that were most commonly used to produce holes up to a depth of about for building and bridge foundations. It even had a fully functioning drilling simulator inside its main research lab where production or prototype drill bits could be tested on any kind of rock at temperatures and pressures normally encountered in actual drilling operations. In 1972, Howard Hughes sold the Hughes Tool Company; it had been the consistently profitable part of his empire, and produced the profits that built all the rest from the very beginning. This became the "new" Hughes Tool Company while the remaining divisions of the business were placed in a new holding company, the Summa Corporation. Hughes Tool Company
merged Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
with
Baker International Reuben Carlton "Carl" Baker, Sr.California Death Records. - California Department of Health Services Office of Health Information and Research. (July 18, 1872 – September 29, 1957) was an American oil industry drilling pioneer. He established B ...
to form Baker Hughes Incorporated in 1987.


References

{{Authority control Howard Hughes Hughes Aircraft Company Oilfield services companies Petroleum in Texas Manufacturing companies based in Houston American companies established in 1908 Manufacturing companies established in 1908 Non-renewable resource companies established in 1908 Manufacturing companies disestablished in 1987 1908 establishments in Texas 1987 disestablishments in Texas Defunct manufacturing companies based in Texas American companies disestablished in 1987