The Rise and Decline of Cobb & Co: An American Business Venture in the Colonial Australian Outback – Part I

Posted on by E Curb Nottus
Commerce & Business, Heritage & Conservation, Old technology, Popular Culture, Regional History, Social History, Society & Culture

❝Such days as when the Royal Mail was run by Cobb & Co❞ ~ Henry Lawson

🌀-🌀-🌀

Cobb and Co is a name that still has much currency within Australian and New Zealand society. In New South Wales in the rural tourist industry there is the “Cobb & Co Heritage Trail” which invites travellers to take the “historical self-drive” following the outback route from Bathurst to Bourke that the celebrated erstwhile coach service once trekked. Queensland holds a Cobb & Co festival each year to honour the historic Surat to Yuleba route. There are touring bus and coach businesses operating that have also appropriated the name…in addition there are “Cobb & Co hotels” and “Cobb and Co bottle shops” scattered around regional areas of the eastern states※.

⇓ Cobb & Co Heritage Trail

All of this is testimony to the fame of the original Cobb & Company which was once a household transport name, etching for itself a place in the folklore of Australia’s outback regions. The company’s story begins in the goldfields of Victoria in the 1850s. In 1853 the American Adams & Co coach firm despatched Freeman Cobb and three American colleagues⚀ to Melbourne with the objective of establishing a local operation which would capitalise on the hordes of fortune seekers flocking to the Victorian gold rushes. As things transpired, Cobb ended up starting his own coach service together with the other Americans🔰, thus was born Cobb & Co.

Freeman Cobb ⇑ (Photo: www.geni.com)

The first trip (January 1854) of Cobb & Co carrying passengers, goods and equipment went from Collins Street (Melbourne city) to the Forest Creek goldfields (now Castlemaine) and to Bendigo✫. Cobb & Co was a winner pretty much from the outset…by 1856 the company was worth £16,000 (in 2011 values around $2.1 million). Freeman Cobb however didn’t stick around to see the full flowering of it’s success, after three years he sold out of his eponymous company, moving on to other (less successful) ventures. Cobb & Co changed hands a couple of times, and then in 1861 it was purchased by a consortium of nine US and Canadian businessmen for £23,000 ($3.4m in 2011) [‘Cobb & Co: historical transport’, (Kathy Riley), Australian Geographic, 18-Oct-2011, www.australian geographic.com.au].

The driving force of the firm under the consortium was another American immigrant, James Rutherford. Rutherford began by organising all of the company’s lines (the different routes), making them more profitable concerns. Under his leadership Cobb & Co expanded into NSW and Queensland (the NSW operations were based at Bathurst). At the company’s peak in the 1870s, it’s coaches were covering a distance of nearly 45,000km a week with routes stretching from the very top of Queensland (the Gulf of Carpentaria and Cooktown) down to southern Victoria [ibid.; ‘In the Days of Cobb & Co’, Sydney Mail, 20-Apr-1921, www.trove.nla.gov.au]. As one one chronicler of the iconic transport company’s story observed, Cobb & Co was many things combined – “the Qantas, the Australia Post, the TNT and the Holden of its day” [Sam Everingham, Wild Ride, The Rise and Fall of Cobb and Co, (2007)].

James Rutherford ⇓

(Photo source: State Library of Queensland)

What accounted for Cobb & Co’s spectacular success in the coach transportation business?

The decisive factors were manifold but basically Cobb & Co beat it’s competitors in several logistical areas. It’s coaches were faster and more efficient…while the rivals used heavy, rigid English coaches for their runs, Cobb imported American Concord coaches (made in New Hampshire and used in the American West) which were rounded and lightweight and had supple coach bodies – far more suited to the rugged Australian landscape than the cumbersome English coaches. Consequently Cobb & Co’s coaches gave a smoother, faster ride [Riley, loc.cit.] (the Concords, though superior, apparently didn’t always deliver that smooth a ride as they were known colloquially as the “red bone-shakers”).

A replica C & C Concord coach on display at Timbertown, NSW ⇓

The Concord coaches were fitted with leather braces and straps in place of the inflexible iron ones used on other horse-drawn vehicles which had a tendency to snap too easily (leather also provided greatly superior suspension for the carriage). Concord coaches were made to last the rugged journey and so contributed to a reputation for reliability that the Cobb service was able to establish [‘Days of Cobb & Co’, loc.cit.].

A master stroke by Cobb was to establish a series of changing stations every 16-32km along the routes. This gave Cobb & Co journeys the big advantage of always having fresh horses, enabling the drivers to maintain high speeds over long distances.

Cobb & Co coachmen – risky adventures, pitfalls and hazards of the job

The drivers themselves employed by the company were possessed of extraordinary skills in managing their horses and vehicles. They had to be to negotiate all the difficulties and obstacles in their paths and still keep on schedule…atrocious roads made worse by inclement weather, flooding of creeks and rivers, and unpredictable encounters with dangerous bushrangers◘, were all recurring events that challenged the mettle of the coach drivers. The dangers aside, experiencing the thrills and (near) spills and the full-on ‘wildness’ of a Cobb & Co journey through “the bush”, must have been an exhilarating experience for colonial travellers in the day.

Many of the drivers, some of which Cobb and (later) Rutherford recruited from the US, were colourful characters in addition to being accomplished horse handlers…blokes such as Dick Houston, Jim Conroy, ‘Silent’ Bob Bates, H Barnes, and not least “Cabbage Tree” Ned Devine. Devine, with his team of distinctive light grey horses, was by all accounts a particularly exceptional driver (earning himself a very good wage of £17 a week)…when the first English cricket team toured Australia (HH Stephenson’s, 1862), Devine was their driver on the Victorian leg of the tour [K. A. Austin, ‘Devine, Edward (Ned) (1833–1908)’, Australian Dictionary of Biography, National Centre of Biography, Australian National University, http://adb.anu.edu.au/biography/devine-edward-ned-3405/text5169, published first in hardcopy 1972, accessed online 31 May 2019].

Ned ‘Cabbage Tree’ Devine ⇓

(Photo source: State Library of Victoria)

Similarly, Cobb & Co’s grooms played an integral role in the highly organised operation…each groom was personally responsible for eight to ten horses and for their gear. The clockwork operation saw the drivers sound a bugle when they were one mile from the next staging post, this alerted the grooms to have the fresh team of horses primed and ready the minute the coach arrived. The pay-off for such a high level of efficiency, superior speed and dependability was that Cobb & Co scored lucrative mail contracts from the colonial governments [ibid.].

Cobb diversifies from its passenger and goods transport base

General manager Rutherford was the catalyst for Cobb & Co’s diversification into new businesses. Initially this payed dividends with its first move, appropriately enough, into coach and buggy building at Bathurst, NSW. Just four years into this activity Cobb & Co could boast that it was the largest coach-maker in Australia [ibid.].

Rutherford also acquired pastoral properties for the company, another profitably step for Cobb & Co. By 1877 they had nine sheep and cattle stations across NSW and Queensland covering an area of 11,000 square kilometres and turning a net profit of £77,500 (equivalent to $11.3M in 2011)…this was at a time that the company’s revenue from coaching – the principal business – was yielding only £11,500 ($1.7M) a year by comparison [ibid.].

By the end of the 1870s Cobb & Co had been in business for 25 years and had already established itself in the eastern mainland states as something of an institution in the “wide, brown land”. It had undergone diversification and experienced growth, but as I will show in Part II, the remarkable good fortunes of Cobb & Co was about to take a decided turn for the worse.

💫 –💫 –💫

PostScript: Exporting the Cobb & Co model

Unsurprisingly, the spectacular trajectory of Cobb & Co’s rise in fortune and fame drew imitators elsewhere. A number of coaching services, some using the same name (although totally unrelated to the original eastern Australian company), sprang up independently in South Australia, Western Australia, New Zealand, Japan and South Africa. This last concern was started up by Freeman Cobb himself in 1871, hoping to cash in on the discoveries of diamonds and gold in the Kimberley and the Transvaal (unfortunately Cobb couldn’t reproduce his Australian success, dying in South Africa still in his 40s) [K. A. Austin, ‘Cobb, Freeman (1830–1878)’, Australian Dictionary of Biography, National Centre of Biography, Australian National University, http://adb.anu.edu.au/biography/cobb-freeman-3237/text4883, published first in hardcopy 1969, accessed online 29 May 2019].

‘Kiwi’ Cobb & Co

The New Zealand version was begun by Charles Cole, who’d previously ran Cobb & Co’s Smyth’s Creek to Ballarat line in Australia❎. As in Victoria and NSW the impetus for the initiative in NZ was the gold rush in Otago (1861). Cole’s Otago coach proprietorship was in partnership with the Hoyts brothers (operating as Cole, Hoyt & Co., proprietors of Cobb & Co. Telegraph Line of Coaches)…later the service was extended to Christchurch and Canterbury. The legendary Ned ‘Cabbage Tree’ Devine worked at one time for the New Zealand outfit, driving the Dunedin to Palmerston and Oamaru routes [Austin, ‘Ned Devine’, loc.cit.; ‘Cobb & Co (New Zealand)’, Wikipedia, http://en.m.wikipedia.org].

⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛⏛

※ in fact there are all manner of commercial enterprises in Australasia using the “Cobb & Co” handle as a trading name – restaurants, bars, B ‘n Bs, screen printers, clockmakers, kitchen manufacturers, etc.

⚀ the others were James Swanson, Anthony Blake and John Murray Peck (who later became a successful stock and station agent in Melbourne and a vice-president of the Essendon Australian Football Club)

🔰 the average age of the four American founders was just 22 – although they did have combined experience working for Adams, Wells Fargo and other coach companies in the US

✫ Cobb charged £5 per passenger for the roughly 110 ml journey [‘Days of Cobb & Co’, loc.cit.]

◘ one of the best known bushranging incidents involving Cobb & Co was the 1863 holdup at Eugowra (in the NSW central west)…notorious bushranging gang led by Frank Gardiner and Ben Hall robbed a Ford & Co coach (the firm was takes over by Cobb & Co one week later) of £14,000 in gold and banknotes from the goldfields [‘Details of the Robbery’, (Welcome to Eugowra in the heart of bushranger country), www.eugowra.aus.net]

❎ Cole brought one of the custom built Concord coaches across the Tasman with him to Otago

Empires Built of Chocolate: The Quaker Dynasties of English Chocolatiers

Posted on by Sloane Snodgrasse
Commerce & Business, Memorabilia, Popular Culture, Regional History, Retailing history, Social History

First World problem – Cadbury’s or Nestlé’s?
For children of the Fifties and Sixties growing up in the West, the preference of chocolate usually came down to a shelf choice between Cadbury and Nestlé. My recollection is that my own juvenile palate tended towards Nestlé, but only partly due to taste…yes I did have an oral appreciation of Nestlé’s slim, pocket-size milk chocolate bars but Nestlé was also great for youthful card collectors. Each bar contained a different colour card that you could paste into your Nestlé Car Club book or Sky Club book or into their “Conquest of Space” series book. A glance at the enduring popularity of Cadbury’s chocolate is confirmation that the British confectioner did not miss my preference for their Swiss rival.

(photo courtesy of www.historyworld.co.uk)

As a child I was very aware that Cadbury’s had a chocolate factory in Tasmania (known as “the factory in the garden”)…the idyllic image of rustic Claremont was imprinted in my head courtesy of innumerable Cadbury TV ads (as a visual treat great scenery plus chocolate is always hard to top!) What I wasn’t aware of as a young chocolate consumer was that that Cadbury’s (nay, almost all of the English pioneering chocolate manufacturing industry!) was a Quaker company. Cadbury’s kicked off from a small shop in Birmingham, England, in 1824, but before Cadbury’s there was Fry’s Chocolates which opened its first shop in Bristol in 1761, and after it Rowntree’s (established 1862, in York✲). All of these chocolatiers were founded by English Quakers and the companies business ethos imbued with the Quaker philosophy.

(photo courtesy of www.historyworld.co.uk)

In business by circumstance and conviction British Quakers in the 19th century not only cornered the chocolate market, they excelled in business in a multiplicity of fields, ranging from banking (Barclays, Lloyds) to biscuit manufacturing (Huntley and Palmers, Carrs) to footwear (Clarks’ Shoes) to match manufacturing (Bryant and May) [‘How did Quakers conquer the British sweet shop?’, (Peter Jackson), BBC News Magazine, 20-Jan-2010, www.bbc.com].

The circumstance that Quakers found themselves in guided their decision to embrace the world of business. As a Christian non-conformist group in a sea of English Anglicanism, adherents of the Quaker faith in the 1800s were subjected to the systematic discrimination befalling religious outsiders – exclusion from the universities (until the 1870s) meant the leading professions of medicine and law was barred to them. Naturally enough, this barrier to the industrious, go-ahead Quaker person, turned them towards business and commerce [ibid.].

The senior Cadbury ⤋


 Kings of the chocolate business ❇
The Quaker philosophy incorporates a commitment to social reform and the pursuit of justice and equality. This ethos informed their business practices, Cadbury’s and other Quaker firms established a reputation for being honest and reliable. This gave them a competitive advantage over their non-Quaker competitors. The perceived ethical nature of Quaker confectionery firms was rewarded with customer loyalty. John Cadbury and his successors were among the first to set a firm (and fair) price – this was a clear departure from the hitherto customary retail practice of point-of-sale price bartering [ibid.]✥.

Cocoa the health drink
Founder Cadbury started off mainly selling cocoa drinks (solid chocolate came later)…this was borne out of 19th century social concerns – a Quaker (by definition teetotal) response to the “perceived misery and deprivation caused by alcohol” in British society (Helen Rowlands, Quaker historian)⍓. The Cadburys marketed cocoa as a cheap available drink, one that was healthy (the process involved boiling thus removing the impurities lurking in the dubious public water supplies of the day)[ibid.]☯.

Democratising cocoa and drinking chocolate Cocoa and drinking chocolate had been around in England since the 1650s but before Cadbury’s came along it had been a luxury beverage for the elite. John Cadbury’s improvements to the product gave it more varieties and made it a more palatable drink, and after the Gladstone government reduced taxes on imported cocoa beans in the mid 1850s, the cost of cocoa became within the reach of the greater majority of Britons. Cadbury’s introduction of unadulterated “cocoa essence” in the 1870s coincided with a government crackdown on the widespread adulteration of food in the UK. The upshot was free ‘plugs’ for the purer Cadbury product and a boost in fortunes for the Quaker business [‘The Story of Cadbury. Early Days – A One Man Business’, www.cadbury.com.au].


Even ‘Lancet’ was lavish in it’s praise of Cadbury’s Cocoa ⤋(photo courtesy of www.historyworld.co.uk)

Worker welfare and satisfaction a priority The Cadbury brothers (Richard and George, sons of the founder) placed an uncommon degree of emphasis on the fitness and health of their workforce (again philosophically driven by their faith). After moving their factory to a greenfields site south of Birmingham to cope with the business’ growth, George built the Bourneville village in the vicinity – this was a model village community for Cadbury’s workers – replete with schools, leisure facilities (including a lido) and parks, canteen, a carillon and its Friends meeting house. Cadbury’s employed doctors and dentists for the benefit of Bourneville employees and was among the first to pioneer pension schemes for their workforce [Jackson, loc.cit.]. The village included attractive “Arts and Crafts” style cottages in picturesque surrounds, but no pubs were permitted on the Bourneville estate⍟.The Bourneville factory ⤊

Chocolate you can eat! Cadbury Dairy Milk Richard and George’s acquisition of a new cocoa press reduced the cocoa butter content, further improving the taste of the Cadbury cocoa drink. The press also helped Cadbury’s make a breakthrough with eating chocolate in the 1890s…learning from the Swiss prototype (Nestlé), it started to create milk chocolate bars to rival those on the Continent. In 1905 Cadbury’s introduced Dairy Milk Chocolate which would go on to become it’s and the UK’s top selling chocolate bar (60% UK market share in 1936). DCM, together with Bourneville Cocoa, have established themselves as Cadbury’s two stand-out, iconic products in the history of the company [‘The Story of Cadbury’, loc.cit.; Deborah Cadbury, The Chocolate Wars: The 150-Year Rivalry Between the World’s Greatest Chocolate Makers, (2010)].

(photo courtesy of www.historyworld.co.uk)

Following success came expansion – in 1918 Cadbury’s opened a new factory in Tasmania (the first outside the UK). In 1910 Cadbury’s finally overtook J.S.Fry & Sons in chocolate and cocoa sales…Fry’s got the block of solid chocolate right before Cadbury’s but the legendary “glass and a half” merchants surged ahead in the end. [ibid.]. So much so that Cadbury’s acquired its biggest domestic rival in 1919 (giving it Fry’s top lines, ‘Chocolate Cream’ and ‘Turkish Delight’). In 1967 Cadbury’s added the Australian chocolate manufacturer MacRobertson (‘Freddo’, ‘Snack’)✴

Family Fry and partners
The Fry chocolate business was another dynastic Anglo-Quaker confectioner. The original Joseph Fry started the company in the mid Georgian period in Britain, taking on a partner, John Vaughan. Upon Fry’s death his widow Anna Fry took over the family business and the firm name changed to Anna Fry & Son. Joseph Storrs Fry succeeded her and partnered with a Dr Hunt. Storrs Fry patented a method of grinding cocoa beans using a Watt steam engine. The company then devolved to his sons, Joseph, Francis and Richard, as joint partners. Under the next generation of Frys (Joseph Storrs Fry II), the business reached its commercial pinnacle before it got absorbed into the vast Cadbury empire [‘J.S.Fry & Sons’, Wikipedia, http://en.m.wikipedia.org].

Shadowing Cadbury’s, the rise of Rowntree’s Rowntree’s, Cadbury’s other domestic rival in the sweets trade, was the creation of Henry Rowntree. Like Cadbury’s Rowntree applied Quaker principles to his business and always insisted on the best quality ingredients [‘Rowntree’s’, Wikipedia, http://en.m.wikipedia.org]. Joseph Rowntree, Henry’s brother, joined as partner in 1869, and being a staunch advocate of social reform, steered some of the firm’s profits towards his Quaker philanthropy. The company’s first big success was with ‘Fruit Pastilles’ and ‘Fruit Gums’ which allowed it to follow Cadbury’s earlier move in purchasing a Van Houten press. This enabled Rowntree’s to produce chocolate sans cocoa butter, so as to compete with Cadbury’s successful ‘Cocoa Essence’ [Robert Fitzgerald, Rowntree and the Marketing Revolution, 1862-1969, (2007)].Rowntree’s, as their rival Cadbury’s did, created a dynasty of chocolatiers, merchants, philanthropists and social reformers – succeeding sons and brothers kept the family name at the helm of the company (Joseph Rowntree Jr, Henry Issac Rowntree, John Stephenson Rowntree).

Rowntree’s later created the consumer favourites ‘Kit Kat’, ‘Aero’ and ‘Smarties’, and went on its own expansion journey, merging with the Halifax “Toffee King” Mackintosh in 1969 (which added ‘Quality Street’ and ‘Rolo’ to its product inventory). Rowntree’s (rebranded Rowntree Mackintosh Confectionery) then acquired Australian chocolate manufacturer Hoadley’s (1972) which gave RMC Hoadley’s ‘Violet Crumble’ bar.

Rowntree’s introduced the ‘Yorkie’ bar in the Seventies which put a serious dent in Cadbury Dairy Milk’s market share and contributed to Rowntree’s reaching fourth spot in the world chocolate manufacturers’ ladder by the Eighties▣. This was Rowntree’s apogee however as it’s underperforming shares saw it fall victim to a successful takeover from the Swiss giant Nestlé in 1988 [‘Rowntree’s’, op.cit.].

Nestlé’s Yorkie and a dubious sales pitch – the “Nestlé Goliath” was clearly tone deaf to the value of being inclusive when they designed this, a chocolate bar which discriminates on the grounds of gender? ⤋

A British institution undone
Cadbury’s, despite its continuing success, in 2010 suffered the same fate as Rowntree – swallowed up by another Goliath of the food business, US’ Kraft Foods (operating now as Mondelēz International). The loss of Cadbury’s, a household name in British manufacturing for 186 years, was highly controversial, causing an outcry in the UK. What was especially galling to many patriotic Brits was that Kraft had to borrow £7bn to seal the acquisition deal, and the banker brokering the financial transaction was itself British – the Royal Bank of Scotland [Deborah Cadbury, op.cit].


FN: Pseudo-Quakers
The runaway commercial success of Quaker food and confectionery companies did inevitably lead to imitation. A US food manufacturer in the 1870s introduced “Quaker Oats” to the cereal market…on the packets and in product advertising are images of a man dressed in Quaker garb, despite the US company having NO connexion with the Religious Society of Friends (Quakers) whatsoever♉. The company states that it chose the “Quaker Man” as its figurehead “because the Quaker faith projected the values of honesty, integrity, purity and strength”, [‘Quaker Oats website’, (FAQ 2009), www.quakeroats.com] (an early example of retail “identity theft’ to try to cash in commercially on the high regard Quaker businessmen were held in).

تتتتتﭢ ت ﭢ تتتتت

PostScript: Third World cocoa beans and the Quaker chocolatiers – an uncomfortable association
In the late 19th century the Cadbury brothers and other British chocolate-makers started exporting a large proportion of their cocoa beans from the islands of São Tomé and Príncipe (Portuguese West Africa)…by the turn of the century this amounted to 55% of Cadbury’s total supply of beans. Although Portugal had abolished slavery in its colonies, the rigid labour contract system which replaced left the African labourers working the plantations in a de facto slave status. This uncomfortable connexion of an ethical Quaker business to neo-slavery prompted one of the managing grandsons, William Cadbury, to commission an investigation of worker conditions in São Tomé and Príncipe in the 1900s. Cadbury eventually found an alternative source of cocoa beans (the Gold Coast) and organised a boycott of the two Portuguese plantations, but not before he had to fend off a spate of newspaper attacks on Cadbury’s alleging that it profited from the labour of slaves [‘William Cadbury, Chocolate, and Slavery in Portuguese West Africa’, (Lindsey Flewelling), 11-May-2016, https://britishandirishhistory.wordpress.com/2016/05/11/william-cadbury-chocolate-and-slavery-in-portuguese-west-africa/].

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(photo courtesy of www.historyworld.co.uk)

✲ the non-Quaker exception to this was Terry’s (established 1767, York, UK), famous for “Terry’s Chocolate Orange” and now owned by Kraft Foods

❇ the Quaker chocolatiers’ success was remarkably out of proportion to their numbers…with Quakers just one in fourteen out of a total UK population of 21M in 1851, they comprised >0.1% of the population [Jackson, loc.cit.]

✥ descendant and family historian Deborah Cadbury states that the Cadbury founder practiced a brand of “Quaker capitalism” that valued hard work and “wealth creation for the benefit of the workers, the local community, and society at large” [Cadbury, op.cit.]

⍓ John Cadbury had a long connexion with the Temperance Society

☯ later with the move into making chocolate bars, what gave the Quaker confectionery businesses an added edge over rival manufacturers was their preparedness to invest in new, state-of-the-art machinery [Jackson, loc.cit.]

⍟ the Cadbury village inspired the American non-Quaker Milton Hershey (a Pennsylvanian Mennonite in fact) to create his own ‘utopian’ village for his chocolate factory workers [Cadbury, op.cit.]

✴ a 1969 merger with soft drink giant Schweppes proved less enduring with the two partners demerging in 2008

▣ behind Mars, Hershey and Cadbury’s

♉ in recent years some brethren of the Quaker movement have objected to the way the company’s advertising depicts Quakers, ‘Quaker Oats Company’, Wikipedia, http://en.m.wikipedia.org]

Westfield, an Antipodean Commercial Property Phenomenon

Posted on by funambulator@live.com
Commerce & Business, Local history, Town planning

The Westfield business group, after its recent merger with a Franco-Dutch real estate Goliath made it the largest commercial real estate corporation in the world, has come a long way from its humble beginnings in Blacktown, NSW nearly 60 years ago.

E6CD2151-AE75-4F0C-8A0A-2DA9D89F51F7

⇡ Westfield development signage, 1960s (Source: ‘Westfield History’)

The story begins with two postwar Jewish refugees from Eastern Europe. They both arrive in Sydney in the early 1950s and both separately start up small businesses in western Sydney. Frank Lowy and John Saunders (originally Jeno Schwarcz) come into each other’s world when Lowy would regularly deliver small items to Saunders’ milk bar. The two hit it off and in 1955 they combine their skill sets and open a delicatessen together in Blacktown (outer western suburbs of Sydney).

Lowy’s road from small goods deliverer to nation-wide mall king

In July 1959 Saunders and Lowy, having adopted the one-stop-shopping model of US retailing and recognising the population growth potential of western Sydney, open their first shopping centre – Westfield Plaza❈ in Blacktown [‘Australia’s retail history – Westfield Parramatta’, 29-Sep-2017, www.arc.parracity.nsw.gov.au]. With 12 shops, two department stores and a supermarket, “people flocked to see the plaza which newspapers of the day described as the most modern American-type combined retail centre” [Scentre Group, (history), www.scentregroup.com].

Westfield Plaza of itself was not anything like a full-blown shopping mall on the American scale, but it did launch Westfield✥ on its skyward trajectory. In 1960 the Westfield Development Corporation was listed on the Australian Stock Exchange as a public company. According to the gurus of applied finance, such has been Westfield’s phenomenal success in the commercial property game that “anyone who had the foresight to invest $1000 in the fledgling Westfield group back in 1960 and (then) reinvested all the dividends back into stock would have a holding valued at $136 million” (as at 2004)
[‘Lowy’s retail revolution’,  Sydney Morning Herald, 26-Apr-2004, www.smh.com.au ].

260E59C1-0FE1-4F2F-8725-F5C8DA296DAE

⇡ Burwood Westfield Shoppingtown, 1966

Westfield Hornsby shopping centre (1961) opened two years after Blacktown…by 2018 there were about 36 Westfields in Australia, the majority in the eastern coast states of NSW, Victoria and Queensland❂. In 1977 Westfield took the plunge and moved into the American market. The first US Westfield mall was the Trumbull Shopping Park in Connecticut…by 2005 there were Westfields in 15 American states, many clustered together in particular cities (in 2018 the total number of Westfield malls in the US was given as 33). Worldwide there are over 103 Westfield shopping centres including in the UK, New Zealand, Italy, Croatia and Brazil [‘Westfield Group‘, Wikipedia, http://en.m.wikipedia.org].

DC10E80B-2502-4258-BD92-E15DE5E42349 

⇡ Westfield Eastgardens (NSW)

The Lowy/Westfield formula for success

Locating for growth: Unlike the mall pattern in America (developments on the edges of urban sprawl) Lowy and Saunders put their retail centre developments in places that were close to railway stations, in areas that were growing or were already built-up, allowing Westfield to “dominate the prime catchment areas for retail spending” [‘Sir Frank Lowy’s Great Australian success story’, Australian Financial Review, 14-Dec-2017, www.afr.com].

Westfield’s involvement in commercial property projects did not confine itself to solely building the shopping centre, but rather it retained an ongoing role in the venture through ownership of the investment portfolio. Thus, Westfield maintained a constant cash flow while its assets ensured it would be able to secure finance for future expansion. With the growth of department store retailing from the 1960s, it was specialist developers like the Westfield Group and Lend Lease who became the dominant players over time in the Australian landscape [‘Westfield’s history tracks the rise of the Australian shopping centre and show what’s to come’, (Louise Grimmer & Matthew Bailey), The Conversation, 13-Dec-2017), www.theconversation.com].

3E91FABA-5C8C-42AC-9B9E-AC3F9D9B3453The challenge of online shopping

Lowy’s Westfield, like all 21st century retail industry players, has had to adjust to competing with the modern worldwide phenomena of the “digital revolution”. Large retail players losing market share to online sales have adopted strategies such as moving to “smaller, more carefully curated boutique stores in affluent areas” (eg, DJs, Debenhams UK), thereby severing their reliance on being inside big shopping malls [ibid.].

The advent of pop-up stores has also provided a challenge to established retail stores and malls in the 21st century.  Uniqlo, In-N-Out Burgers, Niké, Nestlé, Coco-Cola, and numerous other businesses have established their pop-up presence in Australia over the last decade or so. The immediacy and flexibility of this retail mode have allowed them to drastically cut their overheads and take a share of the permanent entities’ market. Westfield’s response has been to rebrand its casual leasing division as the “Pop-up Department”, and thus making it easier for pop-ups to be accommodated within the Westfield shopping centre umbrella [ibid.].

92FA8049-6F91-447F-8D8A-402979C04B8F⇡ Westfield Geelong (Vic.), 1986

In the face of growing online competition from e-commerce giants such as Amazon, the malls and large department stores have made concerted efforts to lure back lost customers…to take Westfield as an example again, the approach has been to try to enhance the in-store services available to customers, to provide “unique services and experiences” that would value-add to their visits in a way the online businesses couldn’t offer [ibid.]. This prompted a strategy change from Lowy◙, a refocus on “developing flagship stores in prime international retail sites, (and) developing shopping experiences, not just transactions”✦ [‘Sir Frank’ (AFR), loc.cit.].

The model for the new approach, as usual, has been the overseas malls, especially the US.  These shopping enterprises, to entice the buying public to desert the online mode and return to the physical store, have taken to offering punters a new mix of leisure and entertainment options inside the malls. Shopping centres in Australia have already embraced some of these innovations⊙ (like upscale dining, cinema complexes, fitness clubs) and are certain to add many of the other mall features already in place in the US (eg, concert venues, day spas, art galleries, farmers’ markets) [Grimmer & Bailey, op.cit.].

Footnote: Remarkably on song as Frank Lowy’s business antennae has been, there have one or two lapses (over a sixty year span!) where Frank DID NOT emerge out of a deal with “laugh lines around his pocket” (a “Fred Daggism” (AKA John Clarke)) … probably the lowest point was Lowy trying to buy the TEN Network in the 1980s and getting his fingers badly burnt. Within the milieu of the mall Lowy has had a reputation for being a tough landlord. At one point Westfield Group was brought before the ACCC (Australian Competition and Consumer Commission) which found that Westfield had abused its market and commercial power. Lowy was forced to formally undertake to “not engage in unconscionable conduct and intimidation” of tenants [‘Westfield promises not to bully’, (Anthony Hughes), Sydney Morning Herald, 18-Jun-2004, www.smh.com.au].

403DCBBB-E392-4DA2-80AD-9BC1B2AF4F31⇡ Westfield’s founder & entrepreneurial driving force

 PostScript: Nothwithstanding Westfield’s measures to try to counter the inroads made by the online merchandisers, Westfield, in line with the catch-all trend adversely affecting global retailing, had suffering a downturn in trade. Ultimately Lowy (and his sons) decided at the end of 2017 to sever their hold on the hitherto family business empire. Lowy meticulously and vigorously negotiated the sale of Westfield to international property giant Unibail-Rodamco, a societas Europaea (a public company set up under the auspices of the EU). The transaction netted the Lowy family a cool $32.7bn with the new merger entity taking the name Unibail-Rodamco-Westfield [‘Westfield: Lowy family sells shopping centre empire to French property giant’, (E Morgan & I Verrender), ABC News, 12-Dec-2017, www.mobile.abc.net.au].

▂▁▃▂▁▃▂▁▃▂▁▃▂▁▃▂▂▁▃▁▃▂▁▃

❈ some sources give the name as “Westfield Place”

✥ etymology: ‘West’ = the location in Sydney’s western suburbs \ ‘field’ = the first centre was located on subdivided farmland

❂ Burwood Westfield Shoppingtown (inner west Sydney) opened in 1966, was the first Westfield to carry the (now characteristic) company logo…it was also the first to contain a major department store – David Jones [1959 Westfield Place opens in Blacktown’,  (Australian food history timeline), [www.australianfoodhistorytimeline.com.au]

◙ Westfield’s two-man partnership came to an end when co-founder John Saunders sold out his half of the business in 1987

✦ in 2014 the Westfield Group undertook a major organisational restructure, splitting into two entities – Scentre Group (Australasia) and Westfield Corporation (Europe and America)

⊙ the Chadstone Shopping Centre in Melbourne, for example, now has the Legoland Amusement Park within its walls

The Pan Am Journey – the Singular and Boundless Vision of One Man, Juan Trippe

Posted on by E Curb Nottus
Aviation history, Biographical, Commerce & Business, Regional History

Pan American World Airways, or as it was universally known in its peak, Pan Am, is a name that is no longer displayed on the flight indicator boards of international airports across the globe. However up to the Eighties it was one of the premier names in the international airline industry.  At the top of it’s game the airline was completing up to 214 flights from the US to Europe a week (1964) [‘Juan Terry Trippe, Founder of Pan Am World Airways and InterContinental Hotels’, Stanley Turkel (PDF, 2006), www.ishc.com].

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From the ground up

Like quite a few young, middle class American men during the Great War, Tripp gravitated towards a future in the air, at first aspiring to be a navy pilot. After the war he transitioned from running a failed taxi service into a small regional air transport company. Trippe’s drive to succeed led him within a few years to merge his group with two other similar-sized ones to form Pan American Airways Inc.

The New Jersey-born businessman came up with a steady stream of novel ideas for innovation in the airline industry – which however required money. Prospects were bright though as new airline ventures were a good selling point. As William Stadiem explains, flying in the “Roaring 20s” was “the high-tech startup of its time!” Financiers, including members of the Rockefeller and Vanderbilt families, were all too willing to bankroll Trippe’s burgeoning airline industry ambitions [William Stadiem, Jet Set: The People, the Planes, the Glamour, and the Romance, in Aviation’s Glory Years (2014)].

By 1927 Trippe had started to assemble the rudiments of a fleet of aircrafts, initially with a brace of tri-motored Fokkers supplemented by some ageing surplus floating boats which he converted into the Pan American Flying Clippers (Trippe was a pioneer of these multi-engine seaplanes). Thus modestly began Pan Am’s first air mail service to the Caribbean (maiden flight in a 65-horsepower Seagull – Key West Florida to Havana) which paved the way for further Pan Am incursions into the region. Expansion followed innovation – from the West Indies he moved into Central and South America, and the foundations were laid for a global transport business✲.AB50588C-D96D-45A9-B209-4EA072696C99

Eschewing managerial orthodoxy

As textbook BUS101 management orthodoxy goes, Tripp was far from the desired model. His inclination was not to delegate and he was given to making unilateral decisions without consulting – much to the chagrin of his boards of directors [‘Juan Trippe and Pan Am’, (Richard Branson), Time, 07-Dec-1998, www.content.time.com]. What he was really exceptional at though, was anticipating the market in air travel, working out usually before anyone else what the next big thing was going to be…and going for it totally!

Business transparency was not part of the Trippe management style…his early inroads in the industry owed a lot to his “stealthy lobbying for U.S. mail licences”, which gave Pan Am a precious legup! [Harold Evans, Gail Buckland & David Lefer, They Made America, (2004)]. Trippe took a ruthless approach to competition and was not adverse to doing secret deals to outmanoeuvre his airline rivals [‘Juan Trippe Revolutionized Trips By Air With Pan Am’, (Scott S Smith), Investor’s Business Daily, 09-Oct-2014, www.investors.com].

Pan Am at times resorted to outright bribery to stay ahead of the pack, eg, offering several 100 thousand dollars to a Mexican president to block rival American Airlines’ bid for landing rights in the US’ southern neighbour [‘Juan Trippe’s Pan Am’, (Ann Crittenden), New York Times, (Archives), 03-July 1977, www.nytimes.com].

Thoroughly innovative Juan

By continually expanding the scope of Pan Am’s operations, creating many new routes, Trippe opened up both the Atlantic and the Pacific to air travel❂. Trippe’s list of innovations in the industry are legion  – including the pioneering of round-the-world commercial flights; the introduction of cockpit electronics allowing Pan Am pilots to fly in any weather; he also came up with “fly now, pay later” plans; his personnel came up with an advanced (computerised) reservations system first [Stadiem, op.cit.;   ‘Dead Airlines And What Killed Them’, (Jean Folger), 25-Jun-2010, Investopedia, www.investopedia.com].3165D89F-A045-4A1A-940C-F2CE1BE1E35F

Before Laker Air there was …

Perhaps Trippe’s greatest legacy however was the pivotal role he played in making affordable air tourism a reality to everybody. When Trippe and Pan Am entered the still embryonic industry,  seats were expensive and airline passengers tended to be exclusively from the well-off sectors of society. The airline ‘biz’ was run by a cartel called IATA (the International Air Transport Association) who contrived to maintain airline prices at a high level [Scott, op.cit.].

The first discount king of airlines

The Pan Am boss’ idea was to introduce a new class of passenger, “tourist class”, slashing the round-trip fare from New York to London by half (to US$275). The cartel reacted by trying to impede the US maverick’s move. British airports were closed to all Pan Am flights with tourist seats (Pan Am was forced to switch its European flights to remote Shannon Airport in Ireland). Pan Am managed eventually to get round the cartel’s net, it’s tourist class proved so popular that IATA caved in and accepted the reality of it [Branson, loc.cit. ; Smith, op.cit.]. Trippe’s actions thus brought air travel within the reach of ordinary people.

Airline entrepreneur and “friends with benefits”

Part of Trippe’s success owed a lot to influential people in high places…he benefited from a personal rapport with presidents like FDR and Truman. In fact, far from it being exclusively a triumph of free enterprise, federal government cooperation and support were integral to Pan Am’s overall success in the business [Crittenden, loc.cit.]. 

⍔ JT Trippe & CA Lindbergh (Source: The Trippe Family)02852001-7C9A-469E-9375-60D9D44E153E

Juan Trippe had the nous to surround himself with the right people from the start…in 1927 he ‘headhunted’ the (then) most marketable figure in world aviation, famed pilot Charles Lindbergh, to work for Pan Am (Lindbergh’s Continental survey flights helped establish the company’s early trade routes✥).

Another key figure within the company was its chief engineer Andre Priester who wrote the specifications for Pan Am’s flying boats. Priester set and maintained the airline’s meticulous safety standards [‘Pan Am Series – Part XLVIII: Skygods’, (Jpbtransportation: the Blog and Website of James Patrick Baldwin), 15-Feb-2015, www.jpbtransconsulting.com]. Staff training and airline safety were things Trippe refused to take shortcuts with – insisting on a high level of training for his pilots, flight crews, mechanics and support staff [Folger, loc.cit.].

With a little help from his (fellow capitalist) friends

Trippe in retirement freely acknowledged the help he received from United Fruit Company…the powerful US banana multinational assisted Pan Am early on to establish a presence in Latin America, thanks to United Fruit’s unique(sic) insider knowledge of the region’s states and its capacity to open doors to various governments [ibid.]. Trippe and Pan Am also prospered from cultivating a good friendship and working relationship with long-time Boeing head Bill Allen.

Enter the jet age

By the 1950s the heyday of “prop-liners” (propellor-driven aircraft) had come to an end. Jet liners were the future,  trouncing ‘props’ for both aircraft speed and carrying capacity…and as ever Trippe got in at the ground floor! Trippe immediately bought up big on Boeing 707s and the first 707 Pan Am commercial flight took place in 1958 (NY-Paris)✮. He then got to work on making it more economical by figuring out how to reduce the jet’s seat-mile cost [Branson, op.cit.].

While going full-tilt into 707s Trippe was already looking beyond…to the 747, the jumbo-jet. As Evans et al observes, Trippe had “an almost clairvoyant grasp of the future (and a) determination to find aircraft to fit that vision” [Evans,  Buckland &  Lefer, op.cit.]. Unfortunately for Trippe, the antennae didn’t work as desired every single time and a few missteps had serious ramifications for the long-term future of Pan Am (see below).

⍔ 1st InterContinental: Belém (Brazil)

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Pan Am ‘accommodates’ – airport to hotel…

Inevitably, the holistic approach Trippe brought to the airline industry✢ led him to capitalise on the airline ‘s success by directly entering the hospitality field… connecting the dots between passenger  transportation and accommodation. With government encouragement from US president FD Roosevelt, Trippe began InterContinental Hotels & Resorts in 1946 as a subsidiary of Pan Am…the first international hotel was situated in Belém, Brazil. Between 1946 and 1996 there were 222 I-C Hotels doing business worldwide (>90% of them outside the US) [Turkel, loc.cit.]※.

Changing fortunes

Pan Am – once a ‘Titan’ of the airways – is no more, what then led to its demise? Some observers trace the seeds of its eventual fall to the late 1940s – years before the company had reached the peak of its powers. Earlier in the Thirties, during Pan Am’s formative first decade, Trippe lobbied the US government, advocating his “chosen instrument” theory (by which Washington would designate a single air carrier for all foreign flights). Pan Am in fact secured this special status, initially with the awarding of a 10-year mail contract by the US Postmaster-General. Eventually though other carriers were green-lighted to enter the overseas field and started to claw back Pan Am’s advantage [Smith, loc.cit.]. Postwar, competitors such as Howard Hughes’ Trans-World Airlines (TWA), Braniff and North West Orient were allowed to enter Pan Am’s routes in South America and Asia, and contest it’s semi-official monopoly✧ over those regions [‘Pan-American World Airways: the rise and fall of a 20th century cultural icon’, (06-Jan-2017), www.seanmunger.com]. The “catch-up” had commenced.

However when Pan Am sought to establish a competitive foothold domestically in the late Forties, the US government flatly rejected its request to start a connecting domestic route network [‘Lots of Reasons Why Pan Am Failed’, (Robert J Byrne), Washington Post, 25-Jan-1992, www.washingtonpost.com]. This setback proved a critical handbreak on Pan Am’s expansion into the profitable US internal passenger market.

⍔ Pan Am logo, the “blue meatballs”65E47663-1881-4115-AAC6-F4CBBCA0E7BA

In 1968 Juan Trippe stepped down as company president, however he remained active and influential in Pan Am’s executive decision-making, maintaining an office in the company’s headquarters. Pan Am still looked in solid business shape, it has 40,000 employees and was flying seven million passengers a year to some 86 countries. Trippe’s unflagging desire and capacity for change and innovation was to be a “two edged sword”, sparking Pan Am’s upward trajectory but also contributing to its ultimate decline. Not content with the revolutionary 707, Trippe cajoled the jet manufacturers to design a new “jumbo jet” capable of carrying in excess of 180 passengers⊡. The 747 answered this ‘need’, with the first commercial flight of a Pan Am 747 taking place in 1970. Trippe employed a similar stratagem with the Kennedy Administration which was reluctant (because of the exorbitant cost involved) to embrace the next level up, the SST-2707 supersonic jet. By signalling  that he intended to purchase five Anglo-French Concorde planes, Trippe pressured President Kennedy into launching the American Supersonic Transport project. But this was one instance where Trippe’s ‘hunch’ was badly off target. The Boeing 2707 proved so problematic (and costly) that the project was dropped altogether in 1971.

⍔ Two Pan Ams, 707 & 747 (source: Boeing)

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The ill-timed expansion into 747s: Capacity overload

Trippe, always striving to be ahead of the curve, placed his order for the new 747s before they were designed, let alone off the assembly line! On this occasion the economy brought him and the company unstuck. The timing of the introduction of 747s, 1970, was not great – coinciding with a recession! Trippe didn’t foresee the 1973 oil crisis, which blew out the costs for maintaining the fleet of jumbos – fuel prices skyrocketed after the Middle East energy backlash [Folger, loc.cit.].

The state of Pan Am’s finances in the early Seventies was not propitious for taking on something of the magnitude of the 747. Commencing from 1969-70 Pan Am experienced seven straight years of losses. By 1977 the company’s long-term debt amounted to a disquieting $727 million! The financial burden on Pan Am was too much – and the problem was compounded by one of Trippe’s successors as company head (Najeeb E Halaby) who bumped the   order of 747s from Trippe’s original 25 up to 33 aircrafts [Crittenden, loc.cit.].

Other developments in the world added to the company’s woes. The spate of terrorist incidents involving Pan Am, culminating in the 1988 Lockerbie tragedy, damaged the company’s reputation and precipitated a decline in travel numbers [Folger, loc.cit.].

Deregulation

Another setback for Pan Am came in the late 1970s with industry deregulation. The legislation of course brought more competition for Pan Am into the game, but this time coming from the big international airline players. Deregulation also meant that Pan Am could now at last enter the American domestic market, and it acquired National Airlines which unfortunately failed at a time Pan Am was in need of a financial “pick-me-up” [Smith, loc.cit.].

When the end came for Pan Am, it came fairly abruptly – in 1991. Pan Am offices everywhere simply closed their doors, virtually overnight. Rising costs of operation, falling market share, a trough in passenger numbers (a further blow in this respect was brought on by the 1990 Gulf War which led to a fall-off in international travellers) [Folger, loc.cit.].  There was a failure to make preparations  for a smooth transition for Pan Am after the head’s departure. Trippe, having been so dominant and instrumental in the company’s success over four decades, was negligent in not planning for a long-term successor to himself [Byrne, loc.cit.]. This hurt Pan Am during the rocky days ahead when it was in desperate need of clear-headed, astute leadership.

Footnote: in the 1920s and 30s Juan Trippe was one of a handful of great US airline pioneers – the elite list also included CR Smith (American Airlines), WA Paterson (United Airlines), Eddie Rickenbacker (Eastern Airlines) and Collett E Woolman (Delta Airlines).

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PostScript: Pan Am’s broader role

Under Trippe, Pan Am’s planes could be called upon when required to provide service outside it’s core commercial role. This happened in war, both hot and cold (eg, active role of Pan Am Clippers in WWII; humanitarian trips during the 1948-49 Berlin evacuation; collecting “refugees from communism” in Cuba during the early years of the Castro regime). Trippe also came to the rescue of his fellow “captain of industry” Henry Ford in 1931, by flying the Brazilian military into the remote Amazon to put down a worker revolt in the Fordlândia rubber plantation.

 

﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎﹎

✲ in addition to a purely business opportunity, Trippe’s focus on this region was to help forestall the establishment of a German (and possibly also a French) airline service to the Panama Canal (in which the US held a strategic interest),  [Sean Munger, op.cit.]

❂ by the 1970s the Pan Am publicity arm was able to boast that it was “the World’s Most Experienced Airline”

✥ often taking him to inassessible places in South and Meso-America where Trippe’s workers would follow, having the arduous job of hacking out landing strips from the dense jungle [Smith, loc.cit.]

✮ in very quick time BOAC, QANTAS, Air France and Lufthansa, among others, rushed to embrace 707s. In 1959 the Douglas company debuted its DC-8, virtually a copy of the 707 [Stadiem, loc.cit.]

✢ in the early years Trippe had even helped build airports in the jungles of Latin America to fit in with the new air routes planned for Pan Am

※ the hotel chain was sold to an English conglomerate, Grand Metropolitan, after Trippe’s death in 1981

✧ Pan Am’s role at that time has been described as the US’ “unofficial flag carrier”, [George C Larson, ‘Moments & Milestones: Birth of the Clippers’,  Air & Space Smithsonian, Nov 2010, www.airspacemag.com]

⊡ skillfully Trippe played the big manufacturers (Boeing, Douglas and Lockheed) off against each other, manipulating them into commiting to an even larger jet before they were ready to build it! [Smith, loc.cit.]