Unwilling to leave Long Island to continue working for Keystone, Grumman joined fellow Loening employees
Jake Swirbul and
William Schwendler in resolving that their best option was to quit and form their own company. Grumman mortgaged his house for $16,950 and Swirbul's mother borrowed $6,000 from her employers to help set up
Grumman Aeronautical Engineering Co. The co-founders were soon joined by Ed Poor, Grover Loening's business manager, and E. Clinton Towl, who had recently come from Wall Street. These five men formed the company's inner circle of management for the next 50 years. Loening and his brother, Albert P. Loening, also became investors. The company was named after its largest stockholder and first president. To family and close friends, he was invariably known as "Roy". The innovative, manually operated landing gear which progressed from a heavy and unreliable design to a more sturdy version helped his company win contracts from the U.S. Navy. When the Grumman Company received its first U.S. Navy production contract for a two-seater biplane fighter, the
FF-1, it featured Grumman's trademark "splayed out" landing gear. He single-handedly invented the famous "
Sto-Wing" wing-panel folding system that revolutionized carrier aircraft storage and handling, pioneered on the F4F-4 Wildcat subtype. He worked out the solution by sticking paper clips into a soap eraser to find the pivot point that made the Sto-Wing possible. Although Grumman realized the importance of his close relationship with the U.S. Navy, by the mid-1930s, he began to design aircraft for the commercial market with the development of the
G-21 "Goose" amphibian and the
G-22 "Gulfhawk", civil version of the
Grumman F3F carrier-based fighter.
Expansion As the company expanded, it moved to bigger quarters – to
Valley Stream in 1931,
Farmingdale in 1932, and finally
Bethpage in 1937. In 1934, a company legend grew up around the number "250" which marked the zenith for expansion in Grumman's mind. He reasoned that if there were more than 250 employees, "it's going to be too big and we're going to lose control of it. That's where we ought to stop." Company accountant Towl was eventually deputized to tell Grumman that the payroll was already at 256. ==Management style==