Clement Keys founded North American on December 6, 1928, as a holding company that bought and sold interests in various airlines and aviation-relation companies. But in 1934, the Air Mail Act of 1934 forced the breakup of such holding companies. The upshot was that North American became a manufacturing company run by James Kindelberger (who had been recruited from Douglas Aircraft Company), although it retained Eastern Airlines until 1938.
Kindelberger moved the company's operations to southern California, which allowed flying year-round, and decided to focus on training aircraft, on the theory that it would be easier than trying to compete with established companies. Its first planes were the GA-15 observation plane and the GA-16 trainer, followed by the O-47 and BT-9. The BC-1 of 1937 was NA's first combat aircraft.
North American's followon to the BT-9 was the T-6 Texan trainer, of which 17,000 were built, making it the most widely-used trainer ever. The twin-engine B-25 Mitchell bomber achieved fame in the Doolittle Raid and was used in all theaters. Finally, the P-51 Mustang, once powered with a Rolls-Royce Merlin engine, came to be considered the best American fighter of the war.
Post-war, North American's employment dropped from a high of 91,000 to 5,000 in 1946. Nevertheless, it continued with new designs, including the AJ Savage aircraft carrier-base bomber, the odd-looking P-82 Twin Mustang, the B-45 Tornado jet bomber, and the FJ-1 Fury fighter.
The F-86 Sabre started out as a redesigned Fury, became the first aircraft to achieve Mach 1 in normal level flight, and achieved fame in the Korean War shooting down MiGs. Over 9,000 F-86s were produced. Its successor the F-100 Super Sabre was also popular.
The cancellation of the F-107 and F-108 programs in the late 1950s was a blow to North American from which it never fully recovered. In 1960, the new CEO Lee Atwood decided to focus on the space program, and the company were the chief contractors for the Apollo Command and Service Module and the second stage of the Saturn V. However, the Apollo 1 fire in January 1967 was partly blamed on the company, and in March they merged with Rockwell.