Chapter 226: The $3 Billion Business

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During World War II, the United States ramped up production to an astonishing scale. They manufactured 400,000 aircraft, over 2 million vehicles, more than 100,000 tanks, thousands of cruisers, destroyers, and frigates, and tens of thousands of landing craft. Among these were 150 aircraft carriers alone. The scale of production was so vast that U.S. military output exceeded the combined production of other nations.

With the war's end, however, these assets became obsolete. The military, once boasting over 10 million personnel, was reduced to just over one million, leaving a surplus of equipment and supplies. Maintaining this surplus would cost upwards of $40 to $50 million annually—a significant burden.

Moreover, arms dealers needed new orders to sustain their profits. With the reduction in military orders, the defense industry faced a dire need for new opportunities. The major U.S. consortia controlling these military-industrial enterprises had substantial influence in Washington and were reluctant to see their investments falter. Thus, the White House sanctioned the disposal of surplus military supplies, leading to the establishment of the 'War Property Administration,' tasked with handling the post-war surplus.

General Williams was appointed to oversee this process. The surplus, originally costing over $30 billion, could still yield significant profits if sold at a fraction of its value. Hardy viewed this surplus as an opportunity to make substantial gains.

When Hardy inquired about the disposal plan, General Williams revealed that only a fraction of the surplus—primarily Jeep trucks—had been sold, totaling just $20 million in half a year. At the current rate, it could take decades to sell everything.

Hardy proposed two options: buying specific supplies at a reduced price or setting up a sales company to manage the sale of these materials. Hardy suggested a profit-sharing model where he would cover operating costs and expenses, with profits split 60-40 in favor of the War Property Administration.

General Williams initially balked at this ratio, suggesting a 70-30 split. Hardy countered with a 70-30 split in his favor, and then quietly offered an additional 1% of the total profit to General Williams as a separate incentive. The prospect of this extra income, even if profits were lower than expected, was enticing.

Williams agreed to the 70-30 split and authorized Hardy to proceed. Hardy outlined his vision: establishing a supermarket chain to sell surplus military materials and a logistics company to handle transportation. He also planned to target international markets, including Mexico, Cuba, Colombia, and Costa Rica. Hardy acknowledged that the return on investment might be slow and that some customers might delay payments.

Williams supported Hardy's proposal and agreed to include previously discussed vehicles in the deal. Hardy suggested appointing a dedicated team to work with his company, ensuring smooth cooperation and reducing the risk of scrutiny.

Colonel Adam Beach, formerly Major General Williams' staff assistant and now in charge of the War Property Administration, was assigned to work with Hardy. Beach was enthusiastic and flattered Hardy, expressing his admiration and interest in business.

Hardy learned that Beach was well-suited for sales due to his business background and his strategic position within the War Property Administration. With Beach and his team, Hardy signed a contract with the War Property Administration, outlining the profit split and operational responsibilities.

The next day, Hardy visited a warehouse base in Nevada, where he observed the surplus inventory, including over 30,000 vehicles and thousands of motorcycles. Notably, 12,800 Harley-Davidson motorcycles, including 3,200 XA1942 models, were available. Hardy saw an opportunity to capitalize on these rare motorcycles by promoting them as collectible items, potentially turning a significant profit.

Hardy decided to purchase the motorcycles at $30 each, with the condition that they be inspected and repaired if necessary. He recognized that despite the initial investment, the potential returns were substantial, especially with strategic marketing and promotion.

Colonel Beach agreed to the terms, and Hardy's plan to leverage the surplus for financial gain was set into motion.