by Steve Lehto
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.
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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.40
Tucker believed he was being attacked, but he did not name any suspects. “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.” Philip Egan and others believed Tucker was referring to Michigan senator Homer Ferguson.41 Tucker had suspicions about the SEC’s Harry McDonald as well but wasn’t sure if Ferguson was pushing McDonald or if the SEC was acting on its own.
In court, Tucker’s attorneys argued it would be impossible for the corporation to turn over everything the SEC sought and still operate. The subpoena demanded engineering drawings, blueprints, and paperwork the company needed to keep working. Finally, Tucker agreed to cooperate with the SEC but also announced he was temporarily shutting down his plant: “Tying up such records at this time will make it impossible to continue operating.”42
For its part, the SEC claimed that the Tucker Corporation’s registration statement, prospectus, and 1947 annual report “contained untrue statements of material fact”—all before they had obtained any additional documents from Tucker.43
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Tucker told the press that the shutdown would not harm the company so long as it did not last longer than thirty days. If the plant remained closed for sixty days or more, the company would be “seriously jeopardized” and “might collapse.”44 “Whether its action is right or wrong, [the] SEC has effectively blocked our every corporate attempt at our most crucial point, when we are on the threshold of mass production with engineering and development completed.” Ironically, the SEC action, ostensibly taken to protect shareholders, would almost certainly harm them by continuing to depress the value of their stock.
The closure of the Chicago plant idled 708 production workers. More than 800 had already been laid off for another reason a week earlier: workers at the company in Detroit making the dies for the Tucker automobile had gone on strike. Tucker’s employees who would work with those dies had nothing to do until the dies showed up.45
Some employees, like Alex Tremulis, told Preston Tucker they would stick around and help as much as they could, even without pay. Later, Tremulis said, “It was Custer’s last stand. We were dying. We just cut our salaries and kept the legend alive.”46
Others, like Philip Egan, couldn’t afford to wait around and see when they would get paid.47 In all, Tucker Corporation laid off more than fifteen hundred employees. At its peak, the company had employed twenty-two hundred people with a payroll of $250,000 monthly.48
On July 14, 1948, a man who held a hundred shares of Tucker stock and two men who had bought Tucker dealerships filed suit in federal court, asking for a court-appointed receiver to take over the Tucker Corporation. The plaintiffs claimed the company’s assets had been squandered, but as was becoming the norm in all things Tucker, the suit contained patently false allegations. While noting that Tucker had promised to build a “new and unusual” car, it wrongly claimed that “no car of any kind other than the experimental car, has been produced.”49 It also claimed, “He has no designs, models, plans or materials to manufacture a car.”50 The plaintiffs did not say where this incorrect information came from. They also made some outlandish claims, including that Preston Tucker had secretly built a home in Bogota, Columbia, presumably so he could abscond with the remaining assets of the company.51 A federal court would eventually freeze the assets of the corporation, assuring it could not possibly conduct any further business.52
D. McCall White, the frustrated engineer who had been Tucker’s first boss in the business, had one more month left on his $5,000-a-month contract. He went to the plant and told Tucker he was ready to work. Tucker found things to keep him busy, and he finished out his last month. White left and said that the men parted amicably, but he would later give a scathing statement to the SEC, accusing Tucker of being a liar, incompetent, and wasteful of corporate assets.53
But other plant employees got together and decided that they needed to do something to try to garner support for the company in its struggle with the SEC. They got permission to use six of the Tucker ’48s that had been completed prior to the shutdown and held a parade in the streets of Chicago. They even added a Tucker chassis with no body to the caravan and invited others to drive their own cars along. The city lent a police escort, and Preston Tucker joined the event at the last minute. While driving one of the Tucker sedans, a motorcycle cop pulled alongside him and asked how the car handled. Tucker offered to let him drive the car. Did Tucker know how to drive a motorcycle? Of course. They traded, the police officer driving the Tucker ’48 in the parade escorted by Preston Tucker on a police motorcycle.54
As Preston Tucker and a few faithful employees wondered what would happen next, it occurred to them that they had the parts to assemble more cars. Some assembly line workers were called back to work and given the job of assembling the remaining cars. Beginning in the third week of July, they built more, and by the time they were done, thirty-seven Tucker ’48s in all had been completed.55 Preston Tucker told reporters that tooling had been “progressing satisfactorily” to allow one thousand cars to be built daily when and if the company was left alone by the government.56
Outsiders speculated, however, that Tucker had shut down because he wasn’t ready for production and was simply using the SEC investigation as an excuse. But a well-respected automotive writer, Tom McCahill, wrote an article that indicated otherwise. McCahill explained that he had visited the factory in Chicago and test-driven a Tucker ’48 before the shutdown. His review wasn’t published until August 1948, however, in Mechanix Illustrated. McCahill left no doubt what his opinion was regarding the car and the Tucker Corporation: “Tucker is building an automobile! And brother, it’s a real automobile! I want to go on record right here and now as saying that it is the most amazing American car I have seen to date; its performance is out of this world. Why do I think so? Wait until you have had an opportunity to drive the car and you’ll know what I mean.”57
McCahill noted the “ballyhoo and attention” Tucker had received to date but then made it clear that it was well deserved. At the Chicago factory, he had seen a beehive of activity: two thousand employees and “cars in various forms of completion.”58 After the tour, he went for a ride in the Tucker and couldn’t rave enough about it. After he dispelled the rumors—it did not have an engine from another automotive manufacturer in it and it could back up—he spoke glowingly of the ride. It was smooth and handled well. And the performance was amazing. “I soon knew I was in one of the greatest performing passenger automobiles ever built on this side of the Atlantic. This car is real dynamite!”59 He compared it to other American-made cars. “The car is roomy and extraordinarily comfortable. It steers and handles better than any American car I have driven. As to roadability, it’s in a class by itself.”60 The article was accompanied by half a dozen photos of the car and the assembly line, with a row of Tucker ’48s in various stages of assembly. After reading this article, how could anyone doubt that Tucker’s operation was legitimate?
But one question arises from McCahill’s piece. He said he saw “nearly 200” cars being built, but his number was far too high. Tucker had ordered enough body parts for only 57 or 58 cars and 125 engines. It is possible McCahill miscounted or misestimated. It is also possible that someone gave him an incorrect number. We do not know, however, since McCahill did not identify his source, other than his own observations.
A
writer for the Chicago Daily News named Phil S. Hanna also addressed the progress Tucker had made before he shut down the plant:
The first thing that strikes the eye is literally several acres of wheels, tires, body stampings, engines, frames and all the related parts that go to make up an automobile. You see hundreds of cylinder blocks, bell housings, radios, batteries and shock absorbers. I counted 58 finished car bodies in the assembly line. Work was stopped on these a week ago when the Securities and Exchange Commission moved in to investigate financing of the company.61
Elsewhere in the plant he counted ninety complete engines ready for installation and “mountains” of boxes containing spare parts. After touring the plant, where he saw men working “for free” to finish assembling cars, he rode in a Tucker ’48 and was impressed. The test-drive included a demonstration of the sedan backing up, which had become routine for every test-drive involving a journalist. More important, the reporter was convinced of the viability of the operation. “The Tucker plant, according to what I saw, appears ready to start production of cars.”62
Reviews and articles raving about the cars and the plant did little to counter the avalanche of negative press hitting Tucker. For every positive review there were a hundred negative stories about the SEC investigation or the federal court lawsuits.
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On August 5 Cliff Knoble turned in his resignation to the company, in accordance with the ninety-day-notice clause he had agreed to when he was hired.63 Knoble had grown discontent following the successful launch of his accessories program, as he wondered what the company had done with the proceeds. The money was intended to pay for the accessories, but there had been rumblings around the company that money was tighter than Preston Tucker was letting on. Knoble, who felt proprietary about the program since it was his idea, asked if the accessories money had been put into an escrow account, or at least an account to segregate it from the company’s general operating funds. Everyone he spoke to—including Preston Tucker—told him that steps were being taken to ensure the funds were safe. But Knoble was tipped off that the corporation was using the accessories proceeds for general purposes. He confronted Preston Tucker, who told him there was a mistake and reaffirmed that the funds were safe. Shortly after, Knoble said, Tucker refused to meet with him any further.
Knoble’s resignation was accepted, and he was told to vacate his office the next day. He hadn’t received his most recent paycheck, and he never would. He was also never paid his promised commission for the accessory sales, despite bringing in more than $1 million in profit. Knoble filed suit to see what, if anything, he might be able to recover.64
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One hope of saving the Tucker Corporation was that a big investor might give the corporation a cash infusion. Tucker may have even approached the enigmatic billionaire Howard Hughes. Newspapers had published reports of rumored meetings between Tucker and Hughes starting in August 1948.65 Rumors swirled that Hughes considered investing, and a journalist asked Tucker about it. “I don’t think I can comment either way. I’ll admit certain deals are pending, but I won’t deny or affirm that Howard Hughes is coming in.” Hughes had little interest in the project. A spokesman for Hughes responded, “There never have been any negotiations. There’s nothing to report.”66
The rumors may have had some basis in truth. At the time, Hughes Aircraft employed a man named Tex Thornton. He had been one of the “Whiz Kids,” a group of Army Air Force veterans who worked at Ford Motor Company after World War II, using efficiency techniques learned in the military to streamline the automaker’s operations. Thornton later wrote to a friend in Detroit that Hughes had gotten a Tucker sedan, presumably from Tucker, and Hughes had run “some tests on it.”67 However, others within Hughes’s organization did not think the project was worth an investment. Thornton did not indicate what opinion Hughes had of the Tucker sedan itself.
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Meanwhile, Tucker pressed forward to get the Tucker ’48 sedan built. He obtained permission to use the Indianapolis Motor Speedway in September to run endurance tests. Tucker, mechanic Eddie Offutt, and a few others drove eight cars to the track from Chicago.68 One of the cars had the new automatic transmission in it that Rice had designed. At the track, they would drive the cars continuously, racking up thousands of miles on them to see how they held up to heavy-duty driving. One car was #1027, the car that would roll with Offutt at the wheel on September 24.
When #1027 arrived at the track, it had 280 miles on its odometer. The car was driven continuously at varying speeds until the odometer hit 1,002 miles. It was then brought into a garage for mechanics to inspect. The engineers installed a front sway bar and ran further tests. The car went back onto the track after being regreased and undergoing an oil change. It was then driven continuously for the next twelve hours, stopping only to change drivers and to refuel. It was during the last fuel stop that someone accidentally put aviation fuel in the car. The report documenting the accident described the cause of the stalled engine as “vapor lock,” although the incorrect fuel could have caused the engine to stall in a few different ways.69
The report also noted that the windshield had popped out exactly as the designers had hoped it would in such an accident. Although fan blades had been bent, the car’s engine still ran perfectly. The fenders and body had suffered cosmetic damage, but the interior of the car was unharmed. The transmission and the suspension likewise remained operable.70 Overall, the crash was a success.
So, too, were the rest of the endurance tests, although Tucker discovered a few things that would need to be corrected in production. The car’s suspension was unconventional; much of the car’s weight was supported by a “torsilastic suspension” system with rubber components. The rubber did not hold up to the excessive wear and tear, and some of the cars rode a few inches closer to the ground on the drive back to Chicago. The engineers were certain they could speak to their suppliers and get a stiffer and more durable compound going forward that would solve the problem.71
About a month after the tests, Tucker’s advertising department sent out letters to dealers describing Offutt’s accident to show how safe the Tucker sedan was. Still, the letter told the dealers to be careful with the information. Just as they had been concerned that seat belts would suggest the cars were unsafe, they were now concerned that photos of a wrecked Tucker might imply the cars were dangerous.
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Before the Tucker plant was completely idled, the remaining employees did what they could to assemble the remaining cars. On November 11, 1948, Dan Leabu composed a memorandum to Tucker and the others that two more cars—#1045 and #1046—had been almost completed. The cars only needed transmissions. The assembly line crew had also rebuilt #1010.72 Eventually, people picking over the remains of the plant would find transmissions for #1045 and #1046 and even the parts to assemble a few others. The final number of Tucker ’48 sedans produced would be fifty-one if the Tin Goose was counted along with the others.
Around Thanksgiving, Tucker announced that the plant would be completely closed for the long weekend and that he was looking for additional financing. He told the press that he had been talking to private investors who might invest $10 million in the company and that he had applied for a $30 million loan from the Reconstruction Finance Corporation.73
Tucker took the opportunity to identify for the press the person he thought was behind the attacks on his business. The Milwaukee Journal reported, “Tucker blamed Senator Ferguson (Rep., Mich) for many of his troubles. He charged Ferguson with ‘aiding and abetting a definite smear campaign.’ He said Ferguson had stated that he was ‘out to get Tucker and put Tucker in jail if it’s the last thing’ he ever did.”74
Less than a week later, it was reported that Tucker’s loan application to the RFC was denied.75 RFC officials would not give the press a reason for the denial, but most people assumed it was because of the controversy surrounding Tucker and his company.
Bankruptcy
; On November 22, 1948, people who had bought Tucker franchises filed an “involuntary petition in bankruptcy.” If granted, it would force the company into bankruptcy, taking control away from Preston Tucker and allowing it to reorganize under new management and continue operating if it was economically feasible to do so.1 A flurry of other legal actions buried Tucker and the corporation in litigation. The cases were assigned to federal judge Michael Igoe.
The cases ran the gamut, from simple lawsuits for unpaid bills to a suit filed by an attorney asking that Tucker be restrained from leaving the country. One of the other cases before Igoe was the action filed back in July by several Tucker Corporation stakeholders, who made outlandish claims of misconduct against Preston Tucker. The original suit, which named only Tucker himself and the corporation as defendants, had been thrown out on a technicality, but the plaintiffs refiled it.2
The refiled civil action named Preston Tucker personally along with the corporation and sixteen other defendants. Among them was Tucker’s mother, presumably because she was the nominal owner of Ypsilanti Machine and Tool. Again, this action sought to have the assets of the corporation taken from Tucker and the current management. To support their position, the filers made serious allegations about how Preston Tucker had conducted business. They charged that the 589 engine Tucker had initially promoted was a “myth” and claimed that the corporation was “in no position” to begin mass production of autos because it was too short of funds.3 The action also asked for an accounting of how much money the company had at its disposal, presumably because they had no idea. Among the allegations raised a second time were that Tucker had a secret home in Bogota, Columbia. But this time, they alleged not only that Tucker had purchased the home to escape from the country but also that he had bought the home with funds stolen from the company.4