THE ART OF THE DEAL: HULMAN'S PURCHASE SAVED SPEEDWAY IN 1945
Indy legend Shaw helped connect quiet Indiana businessman with IMS ownership
INDIANAPOLIS, Tuesday, Nov. 8, 2005 -- Wilbur Shaw could hardly believe his eyes.
His beloved Indianapolis Motor Speedway had fallen into a terrible state of disrepair.
During the World War II years, Shaw, the Shelbyville, Ind.-born three-time winner of the Indianapolis 500, had temporarily relocated to Akron, Ohio, for the purpose of heading up Firestone Tire and Rubber Company's new aircraft division. He, along with all of the other race drivers, looked forward to the time when the war would end so that they could return to their first love: driving in the "500."
On Dec. 29, 1941, three weeks after the United States had suddenly found itself drawn into the Second World War, World War I flying "ace" Captain Eddie Rickenbacker, the track's owner since 1927, canceled the 1942 "500," stating that there would be no further activities there until after the hostilities had been resolved. During the First World War, Rickenbacker's predecessors, Carl Fisher and James Allison, had made the track available to the government as an aviation repair depot. The infield had served as a refueling stop for military aircraft flying between Dayton, Ohio, and Rantoul, Ill., and several experimental aircraft were test-flown there.
When Rickenbacker made a similar offer in the closing days of 1941, however, it was politely declined, the Speedway's infield considered not spacious enough to accommodate the much larger and faster aircraft of WWII.
With that, Rickenbacker ordered the facility padlocked for the duration, and on July 31, 1942, due to the government's vastly increased demand for fuel, rubber and other supplies, all forms of motorsport were ended by federal mandate.
Firestone, meanwhile, had experimented for quite some time with a synthetic rubber tire. Looking forward to the time when the war would be over and the national speed limit of only 35 mph would be lifted, the company sought to prove that the new tire would be able to exceed that speed, not only by a considerable amount, but also over long distances. Firestone sought permission from the government to conduct the tests at the Indianapolis Motor Speedway, and permission was granted.
Although the tests took place with much secrecy, it is believed that one or more passenger cars made runs at speeds of approximately 30 mph in late November 1944, and that on Nov. 29, Shaw took to the Speedway in the Firestone test car, an ex-Mike Boyle-owned Miller.
In what Shaw described in his excellent memoir, "Gentlemen, Start Your Engines," as "the longest, coldest 500-mile high speed run I ever made in my life," he is understood to have averaged 100.34 mph, finishing in just under five hours and stopping only for replenishments.
But the condition in which Shaw found the Speedway during the Firestone test was of considerable alarm to him. One version of the story has attempts at opening the locked entry gate resulting in the entire thing collapsing to the ground. Literally ignored since the day the facility had been shut down, the infield had grown into a virtual jungle, and the old wooden grandstands were rotting and on the verge of collapse. Weeds had forced their way up through the crumbling mortar between the bricks on the main straight, and a few of the locals told of having recently been able to hunt rabbits in the waist-high overgrowth of the pit area.
It was apparently necessary to "weed the groove" before the tests could even begin.
Shaw also learned from the locals that the track was generally thought to be done for, and that as soon as the war was over, it would probably be sold to developers and subdivided in preparation for the anticipated post-war housing boom.
As soon as the test was over, Shaw arranged to travel to New York to meet with Rickenbacker. A race driver in the "500" before he ever learned to fly a plane, Rickenbacker had taken over the track from two of the four original owners, Carl Fisher and James Allison, by floating bonds in a transaction solidified on July 31, 1927. Since the time of the track's founding in early 1909, it had been owned and operated by the Indianapolis Motor Speedway Company, but Rickenbacker immediately established the Indianapolis Motor Speedway Corporation, and the Company was eventually dissolved in 1930.
Although it is understood that there had been several shareholders, including at least a couple with far larger holdings than that of Rickenbacker, it is further understood that Rickenbacker had steadily bought up the shares of his colleagues over the years and that, on paper at least, he was now the sole owner.
Rickenbacker also had become involved in a variety of other activities, particularly in commercial aviation, and after having served as an executive with Eastern Airlines since 1934, had purchased that company in 1938. Not only that, but, behind the scenes at least, he had been playing an even greater role in WWII than he had in WWI.
Shaw quickly determined that while Rickenbacker had been quoted as saying the track would be opened for business as soon as the hostilities were over, he would not, in fact, be averse to entertaining proposals of sale. For several months during 1944, in fact, it was known that a group from the American Legion had been making overtures for purchase. Nothing came of it. Another plan suggested Rickenbacker would continue to own the track but that it would be operated by Seth Klein, the longtime chief starter for the "500" who had been employed for some time by the Indianapolis-based Marmon-Herrington Company, producer of military vehicles.
Shaw -- who had come from fairly meager beginnings to become quite comfortably fixed, thanks to three victories and a trio of second-place finishes in the "500" between 1933 and 1940, and who had done well with public appearances and product endorsements, not to mention his executive position with Firestone -- evidently did not, at this point, envision attempting to make the purchase himself.
Shaw sent out approximately 30 letters to a variety of companies involved in racing -- one version of the story has him typing the letters himself -- and he was thrilled to receive immediate enthusiastic responses. This cooled when he began to read between the lines and sense what has been referred to as "product exclusivity." In other words, he realized that certain companies saw themselves taking over the track, making it their own and then preventing any rival company from participating. What he sought, instead, was someone who would be prepared to operate the track in a more benevolent fashion so that no reasonable participant would be excluded.
Among Shaw's many friends and associates was an investment broker named Homer Cochran, about whom little is known. That was apparently by his choice. A very quiet and private individual, Cochran had a longtime interest in racing and is believed to have briefly tried dirt-track racing himself. This was during the early 1920s, when a very young Wilbur Shaw was just starting out and working at Bill Hunt's Speedway Engineering Company on North Illinois Street in Indianapolis. The two had met at that time and had remained friends ever since.
Cochran had been telling Shaw for quite some time of a gentleman in Terre Haute, Ind., with whom he had been involved in several deals and who in recent years had been gaining a reputation for purchasing potentially successful companies that had fallen on hard times and rebuilding them.
That gentleman was Anton Hulman Jr.
The grandson of a German immigrant, whose wholesale company owned the now extremely successful Clabber Girl Baking Powder products, "Tony" Hulman, as he preferred to be called, turned out to be just the person Shaw sought.
While no specific date has been established, the meeting is believed to have taken place in October 1945, presumably toward the beginning of the month. Shaw and Cochran drove over to Terre Haute to meet in Tony's office at Hulman and Company. Along with Tony were Joseph R. Cloutier, the company's treasurer; Leonard Marshall, an attorney; Joseph Quinn, head of the Hulman-owned Terre Haute Gas Company; and Tom Doherty, a real estate broker who was a longtime friend of the family.
Shaw was delighted to find that the remarkably shy but polite Hulman had an almost boyish enthusiasm for the track. He spoke fondly of having attended the 1914 race with his father, and he was to recall on numerous occasions in later years, the then rather challenging journey to and from Terre Haute to Indianapolis on Highway 40 to which Tony always referred as The Old National Road. And he seemed especially nostalgic about the stop on the way home after each year's race at what he called "The Halfway House."
Tony proved to be an extremely proud Hoosier, and associates always marveled at the knack he seemed to possess for being able to look into the future when it came to business ventures. He expressed great interest in seeing the track and the 500-Mile Race return to its former glory and be to Indiana what the Derby at Churchill Downs was to Kentucky.
Hulman told Shaw that should he be involved, he would not plan to take any profits out of the track but rather would apply them toward renovation and improvements. He also stated that, on the other hand, as a businessman, he did not wish to enter a situation in which the track would lose money. He was assured, both by Shaw and later by longtime General Manager T. E. "Pop" Myers, that the track, properly run, should prove to be a sound and wise investment.
At his first opportunity, Tony made the trip over to take a look at the track. What he found did not seem to discourage him in any way. He is believed to have made several more visits in quick succession to show friends, and when they would look over at him with alarm and concern, the grin on his face would indicate that his mind was already made up.
Things began to come together in a hurry.
Shaw quickly contacted Paul Y. Davis, an Indianapolis attorney and Rickenbacker confidant who had been the IMS Board secretary throughout the Rickenbacker regime. A meeting involving all of the principals was set up for 11:30 a.m. Wednesday, Nov. 14, 1945, in the privacy of Parlor D at the Indianapolis Athletic Club.
Details of the sale never have been made public, but it is believed that by the time Shaw originally went to meet Hulman, Wilbur had begun to see himself as owner of the track after all, with a sizeable investment of his own, plus the help of others. Thus, Hulman was originally considered as merely the principal backer.
It is believed that Rickenbacker was prepared to sell the track for what he had raised to pay for it -- approximately $750,000 -- thereby waiving all of the not-inconsiderable amount that had been spent during his stewardship, namely the installation of a golf course in 1929 and, immediately after the Great Depression, vast amounts pumped into the area of track safety innovations.
Rickenbacker had planned to fly in a day early to meet privately with Davis, but the flight was delayed and he did not arrive until about 9 p.m. Instead, Rickenbacker spent all of Wednesday morning with Davis, and he was an hour late to the luncheon meeting.
Negotiations began in earnest.
Shortly before 5 p.m., Rickenbacker, who just days earlier had come to accept that he probably would reopen the track himself, came out of the meeting and prepared to head for the airport, indicating that a deal had been made and that only a few final details were still being worked out by the others. A formal announcement could be expected any time.
Whatever the advance speculation on what the new setup might have been, the end result was that Hulman had reportedly purchased the track himself and that Shaw had been named president and general manager with Hulman as chairman of the board. Pop Myers, whom some had believed would be offered the presidency, was given the title of vice president. The fact that he had served as general manager effectively since about 1910, and officially since 1914, put both Shaw and Myers in awkward positions. Myers even offered to resign on more than occasion during the next few years, but it was never accepted, and he was still on the staff when he passed away on March 13, 1954, at the age of 80.
Hulman, in the meantime, could generally move around town without being approached because even for quite some time after the purchase, many people in Indianapolis did not even know who he was. Instead, he seemed perfectly happy to remain in the wings and have the internationally known and positively dynamic Shaw "front" the management team and begin the seemingly impossible task of getting the track into shape for the reopening -- which was due to take place in less than six months.