by Steve Lehto
The second piece explained how the “World’s Finest Car [will be] Produced in [the] World’s Most Modern Plant.” Impressive photos of the plant accompanied the article, showing engine parts being manufactured and employees at work. Then a write-up of the proposed Tucker engine explained the advanced design features, an aluminum block, hydraulic valves, and a sealed cooling system among them. Tucker Topics devoted a full page to the Tucker executives and their impressive credentials. The last page bore a reprint of two of the Tucker ads that the company had been running recently across America.17
Soon, however, the stylized renderings of the Tucker sedan would be replaced by photographs of the real thing.
The Tin Goose Unveiled
Tucker announced he would reveal the Tucker ’48 sedan to the public at his factory in Chicago on June 19, 1947. Invitations went to dealers and distributors, investment bankers and other VIPs, and the media. Intense interest in the car pushed the factory showroom quickly to capacity. There was room for three thousand spectators, and it was clear not everyone could be accommodated. By nine o’clock that morning, the plant parking lot was full and extra police were soon needed to direct traffic. No one had been scared off by the SEC stop order on the Tucker Corporation stock sale, which was still in place.
Tucker arranged to keep the crowds entertained all day until the afternoon unveiling of the car. Visitors received name badges and a program and were then given a plant tour. Open-seat “motorized trains” trolleyed people around the gigantic facility. Catering to the largely male-dominated audience, young women who worked for the Tucker Corporation helmed the reception and information desks and acted as pages, guiding the visitors.
While many people were undoubtedly impressed by the vast Tucker Corporation complex, the star of the show would be the car, which remained hidden. Two stages had been constructed in the plant’s huge assembly room, and one of them held a turntable obscured by silver and blue drapes. Finally, Rockelman took the stage. A band played a fanfare and a marine color guard marched in. The national anthem was performed and Rockelman made some quick introductions and a short speech. “We are all in this together and we are here today not only to see the car itself, but to learn of the progress that the corporation has made.”1
Preston Tucker then took the stage and told the audience of the recent squabbles with Washington and the SEC. Then other officials of the corporation got up and gave their thoughts on the momentous occasion. The audience started getting restless. Was it all drama? Charles Pearson noted that the speakers “droning on and on until the crowd began to get restless” were stalling. Backstage, mechanics were frantically trying to make the Tin Goose presentable. They had been up all night, and the car was not ready by three o’clock as they had hoped. Now, several thousand people were just yards away, waiting to see it.2
The Tin Goose had several problems, most relating to its weight. When Ringling had hammered the body panels into shape, he had finished the uneven surfaces with solder. While this is a common practice with bodywork, Ringling had used much more solder on the Tin Goose than he would have on a car with properly formed body panels. Ringling’s final product was beautiful but contained several hundred pounds of solder. Then, the Tucker engine with its hydraulically actuated valves needed a 24-volt starter motor and huge truck batteries to crank. At the time, the industry commonly used a 6-volt starter. The truck batteries normally used to start the Tin Goose were so heavy and cumbersome they had not been put in the car before. It would be unacceptable to jump-start the car now. The night before, engineers wedged two gigantic truck batteries—weighing 167 pounds each—into the car.3
Another nonproduction piece was the car’s front bumper. It was made of wood. The designers had dithered on bumper designs and had not settled on one in time to have a front bumper stamped from steel. The designers painted the wooden bumper black and used metal inlays to give it the appearance of chrome.4 To the untrained eye, it looked like steel.
The car’s suspension contained arms made of aluminum. The specifications had called for steel, but someone had decided to replace them with aluminum at the last minute in an effort to shave some weight from the bloated car. This was an area where strength should not have been sacrificed. A mechanic making last-minute adjustments to the car slammed a door shut and one of the arms snapped from the jolt and the added weight of the solder and batteries.5 Another broke a few minutes later. The first one had failed just a few minutes after a mechanic had climbed out from working under the car. He would have been seriously injured or killed if he had been there a few moments longer. The car could not be driven until the arms were replaced, but an identical set would certainly break also. A stronger set needed to be hastily machined. The machine shop produced arms using beryllium copper, a much tougher compound.6 With the deadline approaching and the Tin Goose falling apart before their eyes, a couple of the mechanics began to cry.7
Bigger problems remained. Tucker had hoped to have fuel injection on the car, but the engineers couldn’t get the engine to run with it. They installed a traditional carburetor instead. Even then, the engine ran rough. The hydraulic valve actuators operated too imprecisely for the engine to run smoothly. The engineers and mechanics found the problem—air in the hydraulic lines caused the valve timing to go out of whack—but could not possibly fix it in time. Instead, they tuned the car to run smoothly at idle and hoped it would keep running when displayed.8
The four suspension arms on the Tin Goose were replaced as the mechanics listened to the speakers stall the audience. Tucker ordered the band to play as loudly as possible, to drown out the noise of the work being done on the other side of the curtain.9 Many Tucker employees wondered if anyone would be fooled. At four thirty the mechanics pushed the car up on the stage behind the curtain and told Tucker it was ready.10
Models in strapless gowns took the stage. Four of them held up trumpets and sounded a fanfare. Others pulled the curtains aside and revealed the Tin Goose—a maroon Tucker ’48 sedan. The turntable began rotating to show the car from all angles. “People in the jammed assembly room went wild, shouting, whistling and cheering,” Pearson later wrote.11
Preston Tucker’s twenty-year-old daughter, Marilyn, walked out with a bottle of champagne in her hands. Tucker introduced her to the audience, many of whom thought the pretty blonde was simply another model, and she christened the car, smashing the bottle on the front of it. Champagne splashed all over her father and his double-breasted suit. It did nothing to dampen his excitement.
Another curtain was drawn back and models walked out onstage one at a time, carrying papier-mâché replicas of parts not needed on the Tucker. Each announced what she was carrying—such as a transmission—and the pile of unnecessary parts grew. Next, Tucker revealed a table piled high with correspondence, representing the telegrams and letters sent by 150,000 people seeking to purchase the car.
Then Tucker struck a serious note. “Let’s get one point straight. I want to build cars and make money, of course. But there’s something else. This country has been good to me, and I feel a debt of gratitude. I’d like to repay that debt, in part, by contributing something to America—something that will mean much to this country’s future: an automobile that will be truly safe, economical, and comfortable transportation for millions of my countrymen.”12
And with that, Ralph Hepburn got behind the wheel of the Tucker and drove slowly down a ramp and across the floor into a roped-off area where it would sit with guards keeping watch on it.
The launch had been a huge success despite the backstage chaos that preceded it. Many dealers and distributors later said they were moved to buy into Tucker’s project when they saw the red Tucker—the Tin Goose—unveiled. Not many franchise sales were completed that afternoon, though, largely because people in the audience were too busy gawking at the automobile and asking engineers about the car’s details.13
Tucker employees were relieved at how the launch went, knowing it had been an even close
r call than they expected. The cooling system in the car hadn’t been perfected and the engine began to overheat in the short time it had run at the unveiling. In the audience, Tucker’s men detected a wisp of steam coming from the radiator, but apparently no one else did.14
The Stock Offering
The Tucker Corporation’s ability to sell its stock had been in question at the time of the Tucker ’48 world premiere. But then Tucker filed an amended registration statement that disclosed all the money received by the promoters, and the SEC dropped its stop order a week after the Tin Goose was unveiled, on June 26, 1947.1 The corporation issued its prospectus for potential investors on July 7. The Floyd D. Cerf Company created the thirty-one-page document outlining the company’s business plan.2
Among the boldfaced statements on the cover sheet was THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION. Right below that: THE COMMISSION HAS NOT PASSED ON THE MERITS OF ANY SECURITIES REGISTERED WITH IT.3 The SEC’s cautions were not limited to the prospectus. The SEC issued a separate warning to the public that went much further: “The contrast between information contained in previous publicity and that in the prospectus, as it now has been amended, is so pronounced that we deem it necessary to warn the investing public of the danger of relying on any past judgment . . . in determining whether to purchase the securities of the registrant.”4 The SEC complained that Tucker’s prospectus was “materially different” from “the prospectus as originally filed”5—even though the SEC had approved the new prospectus. The SEC also wrote that “advertising” done in Tucker’s name before the prospectus was issued had been “false and misleading.”6 Wondering what right the SEC had to issue such an opinion, Tucker’s lawyers asked. An SEC representative said that the opinion had been drafted by a staff attorney named James P. Goode, who thought it would be a good idea to “cool off the enthusiasm on the Tucker deal.”7
The SEC also complained that Preston Tucker had not invested any of his own money into the operation of the company. Yet its investigators later admitted that the entire operation up until December 1946 had been funded by Ypsilanti Machine and Tool.8
Though the SEC seemed to think its negativity was a necessary counterbalance, the Tucker Corporation’s own assessment was hardly starry-eyed. The prospectus warned, “Attention is called to the fact that the proposed Tucker is a departure from the conventional passenger automobile built in the industry up to the present time.” The pilot model had not been tested, and although Tucker hoped to build more models and test them, “these tests, which may take as long as three months to complete, may necessitate material changes in engineering design which may result in delay in attaining quality production.”9 As Charles Pearson later wrote, “The prospectus, as finally amended and cleared by SEC, painted a gloomy picture that would have scared the hell out of a wary investor.”10
The prospectus laid out very clearly the “risks and difficulties” in the project. The car was “radically different” from others on the road and “present[ed] the possibility of problems with respect to performance and public acceptance.” Some materials needed to build the car, such as steel, were in short supply. Competition with the rest of the auto industry was daunting. Other companies already had sales infrastructures and suppliers in place to provide materials and components. Thus, the shortage of new cars caused by World War II might be resolved by the auto industry before Tucker began mass production. And, to date, Tucker’s operation had been “negligible.”11 Clearly, to compete it would have to grow exponentially. Who knew what kind of growing pains would be encountered along the way?
Having explained the risks and pitfalls facing the company—and investors—the prospectus described the product. The Tucker had been talked about for months, and various specifications had been given for it. Here, it was official. The car would be a four-door, six-passenger vehicle weighing just under three thousand pounds. It would have a 128-inch wheelbase. Since the Pic article had been published, two major changes had been made to the design of the Tucker automobile: the car’s projected weight had increased to almost three thousand pounds from the previous two-thousand-pound figure, and the selling price had increased from $1,000 to “between $1,800 and $2,000.”12
The main specifications for the car were laid out in a chart. The “tread”—referring to the distance between the wheels—in the front would be 62 inches and 65 in the back. The spec list contained many more unorthodox ideas. The car would use a 24-volt electrical system, rather than the industry-standard 6-volt. The transmission would not use a clutch or typical manual transmission parts; it would use hydraulic torque converters for “all forward speeds and a reverse.” It would have independent suspension all the way around and four-wheel hydraulic disc brakes.
The prospectus described major features of the car in more detail, noting that some of them were departures from industry standards. For example, the engine installation would allow a quick replacement, with an eye toward simply swapping engines rather than tearing apart broken engines and waiting for replacement parts. If the system worked, the cars would have very little down time, even with major engine repairs. The old engines could be repaired at a more leisurely pace, or even at a central factory location, and then used again down the road in vehicles that needed replacement engines.
Following the early warnings in the prospectus it was clear: the Tucker Corporation was taking chances here, and the car they were designing was very different from anything anyone had previously tried building and selling.13 The prospectus ended the description of the car with another caveat: “Some of the major features representing departures from the conventional automobile have not been tested sufficiently to demonstrate their performance characteristics.”14
The prospectus then explained how Tucker had obtained the lease on the Chicago plant and had opened offices there in July 1946. It was not yet configured for manufacturing, but the corporation “estimated” it could be ready for production within six months.15 “Production plans call for installation of an assembly line with an estimated capacity of 500 cars per eight-hour shift. Presently planned production contemplates two eight-hour shifts. The Company’s projected production schedule calls for production of 200 cars the first month after commencement of assembly line production, with production gradually increasing thereafter.”16 Also included was an impressive full-page aerial photograph of the massive property.
A later section outlined the terms of the lease agreement with the War Assets Administration, which had recently been amended yet again. According to the latest deal, Tucker promised to have $15 million cash on hand by November 1, 1947. If he cleared that hurdle, the Tucker Corporation could then lease the property for $500,000 a year for two years and then $2.4 million a year after that, or 3 percent of gross sales of the company, whichever was greater. It would be a ten-year lease.17 The corporation also had an option to purchase the property during the lease for $30 million.18
Throughout the prospectus, unlike in Preston Tucker’s preferred style of speaking, all the corporation’s statements and predictions were couched as “plans,” and it was clear “it [was] impossible to predict the date when assembly line production [would] commence.”19 A couple pages later the prospectus stated, “The Company is unable to make any representations that the above mentioned volume of production will be attained or that facilities needed for fabrication will be delivered on schedule.”20
The Tucker Corporation had already sold franchises to 49 distributors and 363 dealerships in the United States. The company aimed for 100 distributors and 2,000 dealers within two years of production. Clearly, Tucker had made progress on this front. The company had already raised over $4 million through these sales, more than half of it in cash and the rest in promissory notes. The prospectus also described the Tucker Export Corporation, an “unaffiliated company” formed to sell Tucker autos overseas.21
In addition, the Tucker Corporation revealed that it had 725 employees
on its payroll in June 1947. It anticipated employing as many as 35,000 at peak production. Leading the way was Preston Tucker as president, with an annual salary of $50,000 (the equivalent of $540,000 in today’s dollars). Hanson Ames Brown would receive $35,000 as executive vice president, while VP of sales Fred Rockelman and VP of manufacturing Lee Treese would each earn $25,000.22
The prospectus also laid out how much stock the founders of the company already had. Although it seemed pretty straightforward, some of the underlying math may have confused some investors. In later years, SEC investigators claimed the prospectus made false statements about the founders. The offering stated that Preston Tucker now owned 106,000 shares of Class B stock, of the million shares issued when the company was founded. Tucker paid for his shares, according to the prospectus, partially by extinguishing debts the company owed to Ypsilanti Machine and Tool, and that he had acquired through transactions with the company, which he ran at the behest of his mother, its sole shareholder. Ypsilanti Machine and Tool owned 390,000 shares. The prospectus noted that 90 percent of the Class B stock was held in a voting trust, controlled by Preston Tucker. Interestingly, the 10 percent he did not control was owned by Floyd Cerf.23
Several pages described other transactions Preston Tucker had been involved in before the prospectus was issued, including the purchase and sale of some race cars and associated parts. By the time the dust settled, Preston Tucker was paid $217,669.60 by the company for various things with which he had furnished it. At the time, no one objected to these transactions.24 As for its finances, the Tucker Corporation had money in the bank. Against its liabilities of a little over $1 million, it held assets of more than $2 million, all from the dealership and distributor sales.25