History

Preston Tucker's dream was both revolutionary and visionary.  Having designed cars for the Indianapolis Speedway, his concepts for safety, engineering efficiency and specialized designs would create the most dynamic automobile to come off the assembly line in 50 years. 

By 1947, Preston had managed to organize an effort to develop the largest and most modern automotive plant in the world.  This 480 acre complex on the south side of Chicago was going to bring the Tucker Torpedo, with all of its futuristic features, to the American motorists at an affordable price.

An Open Letter from Preston Tucker

This letter appeared in many newspapers in the United States on June 15, 1948.

An Open Letter to The Automobile Industry In The Interests Of The American Motorist By Preston Tucker President, Tucker Corp.

Gentlemen:

As you know, we are building a completely new motorcar—the rear engine Tucker. Being new-comers in the field we have had to start from scratch and work harder and faster than most of you. For example, instead of the 20 months you usually take to produce a new model of conventional design, my engineers have taken less than 10 to perfect a car which I firmly believe opens a new era in motoring.

In this same year, we have completed a nationwide dealer organization, acquired the largest most modern automotive plant in tile world, and cleared the decks for mass production. These things have been done—and well done—in spite of persistent and unfair opposition from within the automobile industry.

Please don’t misunderstand me. Many of you have gone out of your way to be friendly to the Tucker Corporation. It’s true, some of you have not shared our conviction that a rear-engine car is the car of the future, but you have been willing to let the American motorist judge that for himself, in the firm belief that what’s best for the motorist is best for you in the long run.

But there is another group-a very powerful group—which for two years has carried on a carefully organized campaign to prevent the motoring public from ever getting their hands on the wheel of a Tucker. These people have tried to introduce spies into our plant. They have endeavored to bribe and corrupt loyal Tucker employees. Such curiosity about what goes on in the Tucker plant should be highly flattering, I suppose. But they haven’t stopped there.

They even have their spokesmen in high places in Washington. As a direct result of their influence, Tucker dealers all over the country—men of character and standing in their communities—have been harassed and grilled by agents of the government and Congressional Investigating Committees.

My associates and myself and the Tucker Corporation have been investigated and investigated, time and again. Millions of dollars of the taxpayers money have been squandered in an utterly fruitless effort to kill the Tucker, to bar us from needed raw materials, to keep us so busy defending ourselves and our efforts that the motoring public would tire of waiting for a completely new rear-engine car. But they haven’t been able to stop us.

You know, perhaps, that our bid on a government owned steel plant in Cleveland was recently refused. Let me tell you the inside story of that; Sealed bids were called for, in accordance with law. Only two were submitted, one by the steel company operating the plant, the other by the Tucker Corporation. The bids were opened nearly five months ago. The Tucker Corporation’s bid was high. If Tucker’s bid had been accepted, it could have given taxpayers as much as four million dollars more for the plant than the steel company offered.

This plant would provide ample raw materials for volume production of the Tucker and would serve numerous small businesses now starving for steel.

You would think our high bid for the plant would have been accepted long ago. For five months political pressure, ruthless and barefaced, has forced delay after delay. We’re still waiting. We don’t know who is responsible for this. But who do you suppose is getting the raw material from this plant we want for Tucker and small business? None other than some well known - and unfriendly—automotive manufacturers.

Most of the political pressure and investigations we have had to face these last two years can be traced back to one influential individual who is out to "get Tucker." If he acts from honest conviction in his efforts to prolong the motorcar, then I hope he will have the courage to tell the public just that.

But personally we believe he has more obvious motives. Evidence in Tucker files, for example shows the controlling interest in a large sales agency of an automotive corporate subsidiary is in his wife’s name. And when he gave an elaborate party at a Washington hotel a few months ago, who do you suppose paid the bill? None other than an official of an automobile manufacturer—a manufacturer distinctly unfriendly to the Tucker Corporation. Is all this, too, just coincidence?

Now once more we are being investigated. Just at the time we are getting into production on a car that has won the hearts of the million motorists who have seen it, just when the job of making automobiles demands all our time and energy, my associates and I are asked to take time out again and again ever since we had the temerity to suggest America is eager for a completely new car.

What would you think in our place? Would you say it was just coincidence—or would you think it was planned that way?

You wonder, perhaps, why I have made these statements in an open letter. Here’s why: As President of Tucker Corporation, I’m responsible to 1,872 Tucker dealers and distributors and nearly 50,000 Tucker stockholders. These people have put $25,000,000 into the Tucker Corporation. And I am going to protect their interests.

In addition, we have promised American motorists a completely new rear-engine motorcar, and hundreds of thousands have written us that they are ready and waiting to buy it. Every day letters come to us from people who know that in fighting to put the rear-engine Tucker on the road we are, at the same time, fighting for their right as motorists to get the finest engineering American ingenuity can produce.

We are going to justify the support these motorists so generously have given us. We are going to give them the car they want at a price they can afford, and without paying tribute to the Black Market. How this will be done will be announced today.

But in the meantime, I want to register the fact that we have just begun to fight. We have been patient so far, but our patience is wearing thin. We can give names, dates and places to prove our charges of unfair competition, and if necessary we will do it.

When the day comes that anyone can bend our country’s laws and lawmakers to serve selfish, competitive ends, that day democratic government dies. And we’re just optimistic enough to believe that once the facts are on the table, American public opinion will walk in with a big stick.

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The Tucker Car: Did the Big Guys Do It In? Published in The Freeman: Ideas on Liberty - January 1989 by Melvin D. Barger

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Mr. Barger was a business writer associated with Libbey-Owens-Ford Company and one of its subsidiary firms for nearly 33 years.

At first, I thought it was astonishing that Preston Tucker and his fabled car from the 1940s should suddenly reclaim the public’s attention, as a result of the new movie by Francis Ford Coppola.^[1]

Thinking it over, I decided that the Tucker car’s second coming—if only on the screen—isn’t so astonishing after all. Ever since Tucker’s short-lived carmaking venture collapsed in late 1948, myths about him have circulated in the country. The myths have become part of a legend that strikes close to the opinions held by a lot of people. These myths are worth reviewing because they also touch economic fallacies which are part of the general folklore.

It should be said at the outset that the Tucker car was a poorly conceived venture that was doomed to fail from the start. Though Preston Tucker was a charming, persuasive person with novel ideas, he lacked many of the qualities which were needed for a successful entrepreneurial venture. Even had he possessed these qualities, however, he was entering a business which had become fiercely competitive and cost-efficient at every level. The U.S. automotive industry was already dominated by the Big Three in the late 1940s and would soon shake out established companies like Studebaker, Packard, and Hudson.

There was some concern about this situation by people who argued that it takes many producers to bring real competition. The truth, however, is that the Big Three reached their positions because they performed most efficiently among the carmakers who still survived as the industry grew and matured. The Big-Three efficiency was not only in designing and engineering cars, but also in mass- producing, marketing, and servicing them. Any would-be contender in this tough market would have had to offer not only a great car at a competitive price, but also superb manufacturing and a sound dealer network with servicing arrangements. The outlook for success was so forbidding that no really new car company had grown up since Walter Chrysler revamped the Maxwell concern in the 1920s and then went on to acquire the formidable Dodge interests. The one newcomer who did achieve some success in the postwar car building industry was Henry J. Kaiser, who produced about 750,000 cars in his nine-year attempt to crack the market. Amazingly, however, it’s Tucker and his 51 cars that have stayed in the public memory. Kaiser, an astute businessman with many successes to his credit, is largely forgotten.

Preston Tucker burst upon the scene in 1946 with astonishing announcements which promised a revolutionary new car. First called the Tucker Torpedo, it purportedly had been under testing and development fifteen years and sported amazing safety and performance features. It’s hard to believe the response to this incredible announcement. As a pair of magazine writers recalled in 1982, thousands considered Tucker a genius, “an automotive David who would slay the monopolistic Goliaths of Detroit.”^[2]

For two years, Tucker’s “Tin Goose,” as it became known, seemed to fly fairly high. For his company headquarters, Tucker managed to obtain from the War Assets Administration a huge Chicago plant which Dodge had operated during World War II. Early success in selling stock and dealerships eventually brought in about $26 million. Though the responsive public became restive over Tucker’s failure to produce a car, he finally displayed one in a highly dramatized showing on July 19, 1947. Now called the Tucker “48,” the display model captivated crowds with its aerodynamic design, rear-mounted engine, and such supposedly advanced safety features as a Cyclops center headlight which turned with the wheels and a windshield to pop out in an accident.

Though the display model also drew record crowds when Tucker took it on tour, it turned out that the vehicle had been hastily put together and actually had no reverse gear at the original showing. The suspension system had failed and had been frantically rebuilt just before the show. Some of the body had been fabricated around a 1942 Oldsmobile body. The more serious problem was that Tucker apparently had no sound plan or even blueprints for getting the car into real production. The 51 Tucker cars actually produced were hand-built models fabricated at enormous cost. One example of Tucker’s profligate ways was revealed in his procurement of transmissions. Tucker obtained salvaged transmissions from the defunct Cord automobile, and then paid a shop owned by his family $223,105 to rework 25 of them.^[3] With such weird practices, it’s not surprising that by late 1948 the firm was all but bankrupt. By early 1949 it was all over, with less than $70,000 remaining of the nearly $26 million raised by Tucker from trusting shareholders and would-be dealers.

A number of publications, particularly Collier’s magazine, reported on the failure, leaving little doubt that the Tucker venture had been a business seduction of massive proportions. Tucker himself was exonerated of fraud charges, and it’s possible that he had, indeed, fully intended to build and market his dream car. He was reportedly still determined to launch another automaking venture when he died of cancer in 1956 at age 53.

Long before Tucker’s death, the myths were already circulating in Detroit. I’m sure I heard them from fellow workers when I worked on assembly in a Detroit engine plant in 1951 and 1952. We heard that Tucker had had such a phenomenal car that the Big Three automakers moved to block it. One of their alleged tactics was to bully their own suppliers into refusing to sell parts to Tucker. They also enlisted the government’s help; and the Securities and Exchange Commission helped speed the Tucker car’s demise by leaking information about the company. Another “villain”—as the new movie makes clear—was Homer Ferguson, a U.S. Senator from Michigan who had strong personal ties to the Big Three establishment.

As a student of free-market economics, I’m quick to concede that a government-backed business conspiracy can work to stifle a new venture. The involvement of Senator Ferguson and the SEC does muddy the waters in reviewing the Tucker collapse. In fact, however, Tucker needed no help in destroying his company. The government, if anything, bent the rules in Tucker’s favor when it awarded him the plant in Chicago on very generous terms. As for Senator Ferguson, his more probable concern was not that Tucker would succeed, but that .he was headed for a massive failure which would wipe out shareholders’ investments. The SEC did not doom Tucker, nor did it really carry out its role of protecting investors.

Did the Big Three Shut Out Tucker?

What about the role of the Big Three auto-makers? Their supposed opposition to Tucker is inferred as a result of a common fallacy about big business concerns. There is a widely held belief that any large business or several “oligopolists” can easily shut out an upstart competitor, either with predatory pricing or some other tactic. The way this story goes, the dominant business simply applies such pressures when a new company appears, and then goes back to its usual exploitative practices after the would-be contender expires. This is a fallacious argument that is often used to explain failure. It can be easily disproved by tracking the number of times newcomers have dislodged established firms. It still survives, however, and it contributed to the Tucker myth.

I find it hard to believe that any top manager of a Big Three company actually gave more than a few minutes’ thought to the Tucker venture, let alone conspired to destroy him. While Detroit’s auto executives would have been curious about any new car, they would have been quick to see that the Tucker program was likely to unravel by itself. They were also in the midst of an extraordinary sellers’ market in the late 1940s and had little apprehension that a new competitor might sweep the industry. Nor was there need to fear that failure to bring out a glitzy new body design would cause loss of market share. Though some of them may have admired Tucker’s body design, all of them had new aerodynamic models in progress and planned for early introduction. Studebaker and Hudson, in fact, did beat the Big Three to the market with aerodynamic designs, and yet this did not help them survive in the long run.

Even if Tucker had offered a truly revolutionary car, it’s doubtful that Detroit’s managers would have panicked about possible “losses of billions” in the future, as the Coppola movie suggests. The Big Three automakers already knew how to design “dream” cars, as both GM and Chrysler did just before World War ii.^[4] Their concern was not the design of such cars, but the cost constraints of getting them into production. Again, there is far more required for automotive success than just having a great car. Any top executive of GM or Ford, in looking over the Tucker car, would have immediately questioned whether it could be put into production to support the low sales price Tucker had promised. There would have been questions about its likelihood of giving trouble-free performance and whether the car really delivered the excellent gas mileage promised. And it would have raised some eyebrows if it had been known that Tucker had sneaked reworked Cord transmissions into the car rather than designing his own.

There is also scant reason to believe, as some do, that the Detroit automakers bullied their suppliers into refusing to sell parts to Tucker. I had personal knowledge of this as a result of being associated with Libbey- Owens-Ford for 14 years. I learned that Libbey-Owens-Ford had fabricated Tucker’s pop-out windshield at a time when LOF supplied 100 percent of General Motors’ automotive glass. Had Tucker gone into production, LOF would have continued as his supplier, just as it also supplied glass to other auto and truck manufacturers. (Ford Motor Company had its own glass plants.) Moreover, sales managers are adamant in denying that any carmaker would prevent a supplier from selling to other companies. Rather than making suppliers totally dependent on them, carmakers are more interested in having vendors who are soundly financed and are likely to have a number of customers in order to survive the times when auto production is cut back.

It is possible, of course, that in 1948 some suppliers would have been more attentive to Big Three customers than to Tucker. The persistent fear at supplier firms is that a customer may not be able to pay the bills. In view of disturbing rumors that were already circulating about Tucker Corporation in early 1948, any prospective suppliers would have been skittish about selling to the company except on a c.o.d, basis. Tucker, however, never reached the point of ordering production parts in volume. He was never strongly in the market for the parts that supposedly had been denied to him.,

The most likely Big Three response to Tucker is that the top auto managers noted his company and quickly dismissed it as a speculative venture that would not survive. The duty of following Tucker and reporting on his progress would have been assigned to the market-research person who tracked competitors’ activities. Far from conspiring to destroy Tucker, the Big Three executives were more concerned about competing with each other for the long ton.

Another reason given for the Tucker failure is that the SEC leaked damaging information which had the effect of stifling sales of Tucker stock and dealerships. As a result, Tucker fell far short of raising the total amount that would have been needed to get into production. While nobody knows an exact figure for this, $100 million is probably a fair estimate. This was four times the amount Tucker actually raised.

The Market Responds

Whatever the effect SEC leaks might have had on Tucker’s venture, his failure to raise more capital can be easily explained by the ordinary behavior of the investment market. The surprising thing is not that Tucker failed to finance his venture. What’s really surprising is that he found investors and dealers who were gullible enough to risk $26 million with him. With or without the SEC, the stock market has an intelligence of its own and puts values on shares after they have been sold. Though Tucker was able to milk thousands of small, trusting investors, he was not likely to tap into shrewder ones who realized how speculative his entire venture had become. Price is the stock market’s way of expressing opinion about company values, and in Tucker’s case the share prices plummeted as facts began to surface, virtually foreclosing any hope of raising funds with new equity offerings.

Another myth is that Tucker did have a revolutionary car which foretold Detroit’s future. Newspaper articles recently extolled some of the unusual features of the Tucker car: a pop-out windshield, a rear engine, a Cyclops light in the center which turned with the front wheels, a padded dash, and an aerodynamic body style. But were these really the way Detroit went in the future? No carmaker adopted the pop-out windshield, for example, and the Libbey-Owens-Ford engineers who supplied it to Tucker thought it was a bad idea. Few carmakers have adopted a rear engine; and the front-wheel drive has helped eliminate the long drive train. The Cyclops light is a gimmicky idea that intrigues onlookers, but apparently hasn’t been considered an automotive selling point. Credit Tucker with the padded dash and the leap into aerodynamic design, but neither was beyond Detroit’s capabilities.

A final feature of the Tucker myth was the David vs. Goliath aspect, always a subject for popular appeal. At the end of the Coppola movie, for example, Tucker is deploring the fact that there’s no place for the little guy in the automotive business. This is in line with the frequently expressed idea that nobody can get rich anymore. We heard that in 1948, just as we occasionally hear it 40 years later. Anybody can disprove it, however, by getting the latest copy of the Forbes 400 wealthiest people and noting how many current multimillionaires were penniless or had not even been born back in 1948. There have been numerous opportunities which were spotted by people like Ross Perot, Sam Walton, or Steven Jobs.

Tucker’s point was that the little guy could no longer enter the carmaking business. My point is the same, with the added proviso that car-making is so competitive and risky, and the capital requirements are so high, that it also excludes “big guys.” If there are to be new entrepreneurial ventures in carmaking, they will logically be carried out by well-financed companies who already have expertise in heavy manufacturing. You might think, for example, that a firm like Deere.& Company would use its experience as a tractor builder to move into passenger cars. Such companies avoid car manufacturing as they would the plague, knowing that it would mean almost certain losses.

The automotive manufacturing business does, however, offer countless opportunities for people in related lines. If car building itself is a “big guy” business, the industry continues to provide excellent opportunities for hundreds of supplier firms. There have also been entrepreneurial firms who came up with new automotive tools and ideas. Add to that the companies which specialize in modifying and rebuilding stock cars for select markets.

Tucker himself, if he had possessed more self-understanding and business savvy, might have prospered as a custom car remodeler. He did have a love of cars and he had experience in the automotive field. In a way, the Tucker car itself was a customized remodeling of existing car concepts. Tucker’s use of the Cord trans-mission, for example, showed that he understood nifty innovations which somehow hadn’t succeeded in the market. But one of Tucker’s problems was in being carried away by a “dream” while ignoring the practical work needed to apply it for useful purposes. Mere possession of a dream does not excuse a person from exercising prudence in business relationships.

Though Tucker himself escaped conviction on fraud charges, it is fraudulent at this late date to blame his failures on the Big Three automakers. There are lots of sins we can lay at the door of GM, Ford, and Chrysler managements. They have sometimes been arrogant and complacent; they have occasionally misjudged their markets; they have been sluggish in coping with the new worldwide competition. Their faults are typical of big companies: poor communications, slow response to change, and even bad habits growing out of too much success. Most of the time, however, market realities tend to correct such problems. And in criticizing the Big Three, we should never forget that they are the companies that were most influential in putting the nation and even the world on. wheels.

Let us also be careful not to add Tucker’s failure to any catalog of Big Three wrongs. There’s simply no evidence that any Big Three company was more than an innocent bystander while the Tucker venture was running its erratic course. Tucker did himself in and lost money for lots of trusting shareholders and prospective dealers at the same time. And Tucker was never a victim of anybody or anything other than his own ineptitude. The Tucker Torpedo was a dud from the start, and Tucker was the triggerman with faulty aim.

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1.   Tucker—The Man and His Dream, which opened in .many American theaters in early August 1988.

2.   Perry R. Dais and Glen E. Holt, “The Tale of the Tin Goose,” Chicago, October 1982.

3.   Lester Velie, “The Fantastic Story of the Tucker Car,” Collier’s, June 25, 1949.

4.   See Alfred Sloan, My Years With General Motors (New York: Doubleday and Co., 1963). It carries a photo of the “dream car” designed by GM Styling and introduced in 1938 to test consumer reaction to advanced ideas.
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KCW / karl1952@email.com