by Steve Lehto
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With the prospectus issued, Tucker Corporation could sell stock—although it did not sell as quickly as Tucker hoped. The biggest hurdle came from two states that had banned the sale: Michigan, home of the Big Three automakers, and California.26 Tucker assumed that the decision in Michigan had been the result of lobbying on the part of the Big Three, who presumably did not want more competition.
In California, the corporation commissioner, Edwin Daugherty, issued what even the press called a “blustering statement” railing against Tucker’s proposed sale. It is unclear if Daugherty had actually read the prospectus. Daugherty claimed one of his reasons for the denial was that Tucker had not disclosed his relationship with convicted embezzler Abraham Karatz, even though it was fully disclosed in the prospectus, taking up almost half of one page. Daugherty also claimed that the proposed offering was unfair and cited, among other reasons, an unfounded claim that Preston Tucker already owned a million shares of Class B stock in the corporation.27 The SEC later said the action in California was a direct response to the SEC warning about the difference between Tucker’s publicity and the language of the registration statement.28
Preston Tucker approached Charles Pearson, whose Pic article had kicked off the initial wave of publicity for the Tucker automobile, and asked him what could be done to stimulate stock sales. The SEC frowned on overt promotion of stock during a sale, because the company was supposed to let the prospectus speak for itself. Pearson told him that the only thing they could legally do was to take the Tucker automobile out and show it off to the public. Surely that would help.
While the Tin Goose was drivable, no one at the Tucker Corporation believed it could be driven very far. The issues with the hydraulic valves in the engine had not been resolved yet, and the fluid drive transmission had not been tested well enough to trust driving the car any distance. Tucker decided to take the car on tour anyway. He just wouldn’t drive the car to any of the stops.
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The Tucker ’48’s next public exhibition was at the New Products Exhibition in Los Angeles, a fair put on by the United Inventors and Scientists of America at the Pan-Pacific Auditorium. Tucker flew the car to California in a large cargo plane. Shortly after it arrived, Tucker received a frantic message from Chicago: the car had to be returned immediately. Tucker had been lobbying to get Robert McCormick, publisher of the Chicago Tribune, to go for a ride in the car, believing he would be so impressed that the Tribune would write a positive review like everyone else. McCormick said he was willing to take a look at the car if it was available the next day.
Tucker called the airfreight company that had flown the car to California, but the plane they had used had already been chartered by someone else, and their other plane was likewise unavailable. Tucker told the man to name his price; the Tin Goose had to be in Chicago regardless of cost. The man gave an absurd price: $45,000. Tucker agreed, and soon the car was being rushed from the exhibition hall back to the airport for a flight to Chicago.29
Back in Chicago, the car was delivered to the Palmer House hotel, where it was brought inside through a freight elevator. McCormick walked around the car and expressed a small amount of interest. Someone suggested that the tall man sit in the car to see the spacious interior Tucker had been advertising. McCormick was wearing a hat and stood six feet four inches tall without it. He climbed into the car without removing his hat and sat up straight. According to Pearson, the headliner crushed his hat down over his ears. The publisher, known as “Colonel,” found the incident a little off-putting. Whether this incident was as important as Pearson believed mattered little; the Chicago Tribune’s editorial stance would never be more than lukewarm toward Tucker.30
The car was airfreighted back to Los Angeles the next day, where it continued drawing crowds. Its absurdly expensive round trip to Chicago had amounted to nothing more than McCormick sitting in the car for a moment.
The Tin Goose traveled the country and caused a ruckus almost everywhere it went. In August 1947, at New York’s Museum of Science and Industry, the car was too big to fit through the doors. A large window was removed so the car could be rolled in, and workmen set about constructing its stage. A local newspaper mistakenly reported that the Tucker display would start a day early. As a result, a mass of people showed up while workers were still constructing the display. Thousands stood on the sidewalk, and the museum director worried what might happen if they were turned away. He asked Tucker’s men to hurry and finish the stage as best they could. The spectators were then admitted without charge. Many didn’t notice the half-finished display, which the workers completed later that night.
The exhibit continued to be a major draw, with spectators flocking to the museum to see it. Visitors were charged forty-eight cents admission, and some days the show drew fifteen thousand of them. The Tin Goose outgrossed several shows running nearby on Broadway. Variety reported, TUCKER AUTO, FIRST RUN. GETS BOFF 42 G IN N.Y. In fact, in its ten-day run, the car grossed a bit more than 42 G—$48,000 in total.31
As expected, many people left the Museum of Science and Industry with a burning desire to buy one of the cars. Carmine Coppola was one visitor intent on owning a Tucker. He had brought his son Francis with him, and as soon as he could, Carmine placed an order with a Tucker dealer for a Tucker ’48.32
Another one hundred thousand people showed up to see the car at an exhibition in Chicago as the car hopscotched around North America.33 It wasn’t all smooth sailing, however. Some astute observers had noticed that while the Tin Goose was being shown everywhere, it was not being driven publicly. People had seen it drive a few feet at its world premiere, but no road tests had been allowed, and most people had only seen it on static display, sitting on a turntable or stage at a fair or an exhibition. Was Tucker hiding something?
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Tucker may have believed he had bought Colonel McCormick’s goodwill by bringing the car from Los Angeles to Chicago, but the Tribune publisher was one of those who thought that something might be amiss—and that there might be a story behind the Tucker car after all. He sent a reporter to the Tucker plant to investigate. The resulting article wasn’t a typical piece celebrating the brilliant features of the car of tomorrow. It addressed whether the car was a fraud. The reporter, Frank Sturdy, was the automotive editor for the Chicago Tribune and insisted on going for a ride in a Tucker sedan. Tucker’s people explained that the Tin Goose was the only complete car at the moment, and it was currently on display in Milwaukee. Sturdy pressed. Finally, Treese told Sturdy he could ride a test chassis. It had no body, but mechanically it was identical to the Tin Goose. Sturdy agreed.
Sturdy drove the test chassis at the plant, and he seemed pleased. During the demonstration, Gene Haustein, Tucker’s test engineer, noted for Sturdy that the chassis and the Tin Goose were still experimental. The revolutionary fluid drive system was still being developed, and as a matter of fact it had not even been made to go in reverse yet. It was a simple engineering question. They were still determining if the drive system would even work. If it worked, the reverse gears would be added. But if it did not work, the entire system would be scrapped for a conventional one. The reason they had not installed reverse gears was simple. The fluid drive system did not use any gears. Adding them may have turned out to be unnecessary, so why bother? Sturdy seemed to understand and went back and filed his story.
The fairly well-balanced story contained one section that stood out, titled “Test Chassis Can’t Back Up.” That detail spread quickly, leading many people to assume Tucker sedans were built intentionally without the ability to go in reverse.34 The notion that Tucker sedans had no reverse gear would still be reported by the mainstream press two years later, in June 1949. For example, a story in the Pittsburgh Press that month described some of the features of the car and said, “There is a finger-tip electric transmission, with four forward speeds.”35
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Despite the odd rumors, car buyers were reacting
positively to the Tucker sedan—and they weren’t the only ones. Automobile parts manufacturers began calling on Tucker. Many of them already sold to the Big Three but were looking for new customers. In fact, the automobile supplier business was so competitive that they were excited about another manufacturer entering the field. A great majority told Tucker not only that they were anxious for his business but also that they would gladly extend him credit. Over the next few months, parts suppliers promised him the credit equivalent of millions of dollars. To take advantage of the opportunity, Tucker had to ready the cars for full-scale production.36
The initial stock offering had made available five million shares in the Tucker Corporation. By September 1947, much of it had been sold, but not all. Tucker told Cerf to end the sale on September 12.37 After deducting commissions paid to others and to himself, Cerf had raised $15,007,000, which he gave to Tucker. As many as forty-four thousand people had bought Tucker Corporation stock.38 The Tucker Corporation also had $2 million in notes from its prospective dealers, giving it assets of more than $17 million.39 Tucker notified the War Assets Administration that he had raised enough money to meet the lease requirements, and the WAA wired back confirmation: the plant was officially his on November 1, 1947.40
Post–Tin Goose
The second edition of Tucker Topics was sent to dealers and distributors following the launch of the Tucker ’48. The cover featured a photo (re-created for marketing purposes) of Tucker’s daughter Marilyn christening the Tin Goose. Inside, Rockelman extolled the virtues of the company, and articles described Tucker’s recent awards and the overflow crowds that had greeted the Tucker sedan wherever it was shown. The newsletter said that 170,000 people had viewed the car in Los Angeles and 192,000 more at New York’s Museum of Science and Industry. One page was devoted to celebrities who came out to see the car, many posing for photos with it. Hollywood actor Adolphe Menjou brought his wife. Race car drivers and government dignitaries showed up as well. They expressed interest in buying the cars, and several even inquired about dealerships. Tucker Topics also showed more progress being made toward production, with photos of patterns for the body parts and workers inspecting fabric for the car’s interior.1
The last page updated the progress of establishing dealerships, and brought back a name from Preston Tucker’s past. Mitchell Dulian, whose car dealerships had employed the young Tucker as a salesman, became his old friend’s “Eastern Sales Manager,” with plans to establish offices in New York City.2
Other changes within the Tucker Corporation were less apt to end up in the company’s marketing materials. Harry Toulmin Jr., the chairman of the board of directors, had resigned immediately after the close of the stock sale. Shortly after Cerf cut Tucker the $15 million check, Toulmin stepped down and issued a press release. He said Tucker had refused to commit to “written demands” that the money raised in the stock offering would be “spent and administered under the strictest regulation and controls normal to legitimate business.”3 While it seemed like a reasonable request, Tucker told reporters he had not agreed to Toulmin’s demand because it was an attempt on Toulmin’s part to exert too much control over the company. The stock sale had just closed the past Friday, and on Monday Toulmin was upset with how the money was being spent? Tucker laughed it off and noted that the money had simply sat in the bank over the weekend.4
If it had just been Toulmin exiting, it might not have mattered much. Shortly after, however, two more key executives, Hanson Brown and James Stearns, left the Tucker Corporation too. They claimed they were fired, but Preston Tucker said they had quit. Charles Pearson later wrote that the men did not fit in, since they had both come from the automotive industry, where things were done at a glacial pace. Tucker needed to get his car from the design stage to the production stage in a span of time these men considered impossible. These two represented the problem Tucker was trying to solve with his car. Some wondered why he had brought them aboard in the first place. The answer was simple: for the stock offering. With a group of established auto executives on the board of directors, the Tucker Corporation looked like a safe bet. With $15 million raised by the stock offering, Preston Tucker could go about business as he saw fit.5
To fill the void left by these high-profile departures, Tucker began hiring and promoting people he had known before he launched his business. Former employer Mitchell Dulian was one of them. Many others came from his days at Indianapolis, including Eddie Offutt, a mechanic who had also worked with Harry Miller. Tucker would eventually promote Offutt to chief engineer at the company.6
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Another new hire had a history with a different member of the company’s top brass. Fred Rockelman had worked with an adman from New York named Cliff Knoble who oversaw advertising campaigns for large corporations, including Chrysler. Shortly after the close of the stock offer, Rockelman had called Knoble and invited him to an expensive hotel, where Tucker was conducting business from his suite. Rockelman hoped Tucker would want to hire Knoble after he made his introduction. Knoble wasn’t so sure if he wanted to join the venture. He had heard of Tucker but was unsure if he was a “wizard or charlatan, builder or opportunist, idealist or trickster, genius or fool.”7
Knoble found Rockelman in the suite among a large group of people he did not recognize, and the two made small talk. When everyone had left the suite, the door to the bedroom opened “and a tall, well-built, smartly dressed figure emerged and strode across the room with extended hand and a hearty, ‘Hello, Cliff.’”8 Knoble was taken by surprise. So was Rockelman. Had they met before?
Knoble suddenly remembered he had worked with Tucker years earlier, when Tucker was managing a Chrysler dealership in Memphis. Even Rockelman hadn’t known the two had met.
“Why, sure. We’re old buddies,” Tucker said. Knoble noticed how Tucker had exaggerated their relationship—but, after all, he was a salesman.9 Tucker asked if Knoble was interested in handling the advertising for the Tucker Corporation. If so, Tucker wanted him to come work for the company directly. Knoble demurred, saying it seemed a little premature. Once a stock offering had been made and the company was financially viable, he’d be ready to join. Tucker agreed, certain that Knoble would be working for him soon.
Now, with the stock sale a success and the WAA lease secured, Tucker was clearly ready to make a go of it. Knoble joined the team on December 11, 1947.10 But Tucker could only get so far with the Tin Goose. He needed to show investors and the public that the Tucker Corporation could produce more than one handmade car.
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The Tucker Corporation’s annual report, which it sent out to stockholders in early 1948, made the argument that it was prepared to do just that. The twenty-page document featured a beautiful cover graced with the Tucker family crest. Inside was a stunning rendering of a Tucker sedan. Preston Tucker opened the report with a heartfelt message:
The greatest asset possessed by the Tucker Corporation is not to be found in a balance sheet. It consists of the confidence and good wishes of millions of fellow Americans, with which we are favored to a degree that has seldom been observed in business. In every executive of the corporation, this phenomenon has invoked feelings of humility, thankfulness and responsibility—and has confirmed in us all the resolve to give our utmost to be deserving of such trust.11
A studio portrait of Tucker, gazing at the camera with a slight smile, sat above the letter.
The document described the public clamor for the car and the honors various organizations had given Preston Tucker for bringing a new automobile to market.12 A “Progress Report” recounted the months spent moving the company toward production and asserted that “automobile production at the Tucker Corporation is expected to become a reality in the near future.”13 The report did not give timelines or dates, but simply laid out what steps had been taken. Thus far, 1,394 dealers were signed up, along with 75 distributors to service them, an increase from the time of the prospectus, when there had been 363 and 49, respec
tively.14 The company had raised $9,566,700 from just these two groups.15 On a later page was a map of the United States covered with dots representing the locations of a dealer or distributor. It was clear that Tucker had covered the entire country with dealerships.16
According to the report, the Tucker Corporation planned to use many of the machines that were in the factory when it had been acquired and anticipated hiring three thousand employees shortly. While the company hoped to have several assembly lines operating eventually, it was currently gearing up for a single line, which could be operating by March 1948. Cars would be built and shown around the country. “Arrangements are under way for . . . first delivery to waiting Tucker owners later this year.”17 Again, no specific dates were given.
A description of the factory included beautiful photographs of the facility’s highlights. Other pages featured portraits of the board members of the corporation; there were also, of course, several pages of balance sheets.
The report closed with a letter from the accounting firm of Peat, Marwick, Mitchell & Co., which had examined the corporation’s books and annual report before it was sent to the shareholders. “In our opinion the accompanying statements . . . present fairly the position of Tucker Corporation and subsidiary at December 31, 1947 . . . in conformity with generally accepted accounting principles applied on a consistent basis.”18
The report gave the distinct impression that the company was well positioned to kick off production of the Tucker ’48. And it would spend the next few months doing just that. But eventually the SEC would find fault with the report’s assertions—just one of many ways the agency was poised to make trouble for Preston Tucker’s enterprise.