Plans to produce the C-123 transport for the United States Air Force collapsed amid scandal, and the company closed in 1953.

[5] By 1949, the United States Air Force had determined that the glider was no longer a viable weapon on the battlefield, and the XG-18 was modified, being fitted with a pair of radial engines.

[5] Redesignated as the YC-122 Avitruc, three prototype and one pre-production aircraft were produced, and despite favorable evaluations, the Air Force had reconsidered its requirement for small transports, and decided not to proceed with full production of the design.

[10] Therefore, in 1951, 49 percent of Chase was purchased by Kaiser-Frazer,[10] who received a contract for 300 C-123B aircraft to be constructed at Kaiser's Willow Run factory in Ann Arbor, Michigan.

[14] Kaiser-Frazer, meanwhile, had bought out the remaining 51% of Chase Aircraft's shares, intending to operate the company as a wholly owned subsidiary of Willys Motors;[10] the sale closed on September 2, 1953, after the cancellation of the Air Force's contracts.