Preston Tucker (1903-1956) is a shining example of the difficulties that an entrepreneur faces, particularly one loaded with new ideas that could upset a well-established industry. He is also probably the patron saint of small startups with big dreams. To me, he is a hero; to others, he is a story worth knowing about. His story provides a glimpse into how large businesses and the free market economy can sometimes squash a brilliant person with brilliant ideas. His story was later retold (with a bit of creative license) in the 1988 film Tucker: The Man and his Dream.
Preston Tucker was born on September 21, 1903 in Capac, Michigan. He spent his childhood (as did many children in Michigan early in the 20th century) hanging around garages and used car lots, watching the automotive industry getting started. He was a bright student in school and he worked in his teenage years as an office boy for Cadillac. This fed his interest in automobiles, so in 1921 he enrolled in Cass Technical School in Detroit. Two years later, he beame a salesman, first for Studebaker, then jumping to several other companies, rising in the ranks until he became a regional manager for Pierce-Arrow in the 1930s.
While working for Pierce-Arrow, he met engine designer Harry Miller, and in 1935 they formed a company (Miller-Tucker, Inc.) to build automotive engines. Henry Ford was their first customer, and he signed a contract with the team to have them produce high performance engines for the racecars that Ford was producing for the automotive races in Indianapolis. However, the company was unable to produce engines up to spec for Ford, so the contract was cancelled and the company folded.
Unabashed, Tucker continued to dream of running his own automotive concern. As World War II started, all U.S. automotive companies were asked to help out with the war effort; as a result, very few cars were made in the early 1940's. As the war came to a close, Tucker saw that he had a great opportunity to get his foot in the door, so he dove at the chance.
In 1946, Preston Tucker formed the Tucker Corporation, a company whose goal it was to manufacture automobiles. Since he had spent the war years focused on automotive design while the automotive companies focused on helping the war effort, Tucker's design was far ahead of its time. His most prominent design was a four door fast back sedan style, something seen in modern cars but completely unheard of in the 1940s.
Tucker arranged a deal with the government to take over an old Dodge plant in Cicero, Illinois. The plant had been used during the war to make engines, so the War Assets Administration was looking to lease it. Tucker promised to pay the government $15 million on March 1, 1947, provided he could move in immediately; they agreed, and in July 1946, Preston Tucker moved into the plant, ready to make his design reality.
Of course, Tucker needed money for raw materials as well in addition to his $15 million debt. He went to some banks, but they all wanted control of the business in exchange for such a huge loan, something Tucker didn't want to give up. So, he hatched a brilliant scheme, probably as ingenious as his automotive design: he began selling dealer franchises and had the dealers pay in advance for the cars. Dealers took one look at his designs and realized that Preston Tucker was on to something; within a month, Tucker raised $6 million.
Seeing this, the automotive companies encouraged the Securities and Exchange Commission (SEC) to investigate Tucker's business practices; they were nervous that he might be able to pull this off. In September 1946, a much ballyhooed investigation by the SEC into Tucker's business practices began.
However, to begin producing cars, Tucker needed more money - and fast. The SEC approved his second plan for raising money, another stroke of genius. He proposed a $20 million stock issue contingent upon a completed prototype; the fact that the SEC approved this is actually rather surprising. It is also the model upon which many startups today plan to earn money from an IPO.
At this point, things started to turn against Preston Tucker. In November 1946, the National Housing Agency ordered the WAA to cancel Tucker's lease and turn the plant over to the Lustron Corporation to build prefabricated houses. The reasoning behind this was that houses were more of a necessity than automobiles, but the real reason was that several well-placed members of the National Housing Agency were under the employ of the Big Three automakers.
The WAA spent the rest of 1946 and early 1947 trying to legally break the lease. Tucker's reputation began to slide as time went on without a prototype and the WAA breathing down his neck; dealers were especially nervous as their money was held in escrow. Finally in February 1947, Tucker was allowed to keep the plant and the deadline for the $15 million was extended to July 1. Basically, this meant that a functional prototype had to be made before then so that stocks could be issued to raise enough money to pay the WAA.
As 1947 trickled past and without much money in hand, Tucker's team resorted to actually beating out sheet metal by hand to finish the car. Built completely by hand, the first Tucker automobile was nicknamed the "Tin Goose," and was officially dubbed the Tucker '48. It premiered on June 19, 1947, at the Tucker plant before the press and public. Due to a lack of funds, the actual exterior of the car was supporting the battery; the cheap metal constituting the inner frame could not support the weight of the battery. Tucker's actual model was of a much better car, but they had to produce something that looked good to stay in business. This fact would haunt Tucker in the coming years.
The public display was a huge success, however. Before a crowd of 5000, the Tucker rolled down the ramp smooth as butter, looking gorgeous on the exterior. It was only 60 inches high and looked even lower; it featured doors that extended into the roof and enough interior space for six large adults. It looked much like what other car manufacturers would produce about ten years later. The crowd was amazed and impressed, thousands of orders were placed, and stock sales finally cleared on July 15. Tucker was able to raise $20 million, pay for the lease, and begin to construct "real" Tucker '48's; the line was referred to as the Tucker Torpedo.
By 1948, the plant was humming with 1,600 employees. However, the second payment on his lease was coming around, and he only had $5 million of the $15 million he needed. To cover this, he set up another pre-purchase plan on the Tucker '48's, where buyers could pre-pay for features such as car radios and seat covers. The SEC said that this was illegal and stopped production before it even started. Tucker was forced to fire the employees, retaining only a small staff that was able to construct fifty 1948 Tucker Torpedoes. He began to receive lawsuits and was forced to file bankruptcy in mid-1948. Tucker claimed to his deathbed that the SEC had been pressured into shutting him down by the major auto companies, but there is very little real proof that this happened.
On June 10, 1949, Tucker was tried for conspiracy and mail fraud. The only car that the judge allowed for evidence was the rigged "Tin Goose" prototype, which didn't reflect well on Tucker. Still, the facts of the matter shined through and Tucker was acquitted in 1950. His company was dead, though; the holdings of the Tucker Corporation were sold off and Tucker's dream was over.
In the mid 1950's, Tucker moved to Brazil to make another go of it, with the design for a two seat sports car called the Carioca. Unfortunately, it wasn't to be; Preston Tucker died of lung cancer on December 26, 1956.
The fifty-one Tucker '48's in existence are actually extremely well constructed and are brilliant examples of automotive engineering. It was extremely well-constructed and had a large number of features that didn't show up in other automobiles for more than a decade. In fact, of the fifty-one, forty seven of them are still road-worthy today, meaning that they still operate normally. Most of these are in museums, however. In 1996, one of the Tucker '48's still in private holding was auctioned off for $259,000. The Tuckers are something of a legend among car collectors.
Preston Tucker is a great example of the fact that even with great ideas, it is often very hard to spread your wings and fly.