Hughes Tool Company
| Industry | Drilling, manufacturing |
|---|---|
| Founded | 1908 |
| Founder | Howard R. Hughes Sr. |
| Defunct | 1987 |
| Headquarters | Texas, United States |
|
Key people
|
Howard Hughes |
| Products | Drill bits |
| Owner | Howard Hughes |
Hughes Tool Company was an American manufacturer of drill bits. Founded in 1908, it was merged into Baker Hughes Incorporated in 1987.
The company was established in 1908 as Sharp-Hughes Tool Company when Howard R. Hughes Sr. patented a roller cutter bit that dramatically improved the rotary drilling process for oil drilling rigs. He partnered with longtime business associate Walter Benona Sharp 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.
When Hughes Sr. died in 1924, 75% of the company was left to Howard Hughes Jr., who at the time was a student at William Marsh Rice Institute (now Rice University). According to Howard Sr.'s will, his son was to initially receive a 25% share, his wife 50%, and the remaining 25% was to be divided between various family members. Since Howard Sr.'s wife had died some years earlier, and the will had not been updated to reflect that, Howard Jr. automatically inherited his mother's shares. Resentful of his relatives' attempts to run the business, Howard Hughes Jr. had himself declared a legal adult (21 being the age of majority at the time), and bought out his relatives' minority share in the business.
Under Howard Jr.'s ownership, Hughes Tool ventured into the motion picture business via Hughes Productions during the 1920s, and into the airline business in 1939 with the acquisition of a controlling interest in Transcontinental and Western Air (later renamed Trans World Airlines).
In 1932, Hughes formed Hughes Aircraft Company 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 as its endowment. Hughes Aircraft's helicopter manufacturing business was retained by Hughes Tool Co. as its Aircraft Division until 1972.
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