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New Tucker Talk to examine “The Tucker Business Model: Why the Feds Went After Preston Tucker”

Published in blog.hemmings.com

Preston Tucker. Image courtesy Tucker Automobile Club of America.

It’s been 70 years since Preston Tucker was forced to shut the doors of his Chicago automobile factory, and the controversy surrounding the demise of his business – and of the revolutionary Tucker 48 sedan – still intrigues conspiracy theorists and classic car buffs alike. On June July 27, automotive historian and attorney Larry Clark will deliver the next Tucker Talks at the AACA Museum Inc. in Hershey, Pennsylvania, presenting, “The Tucker Business Model: Why the Feds Went After Preston Tucker (and why they failed).”

As portrayed in the 1988 feature film, Tucker: The Man and His Dream, Preston Tucker was the victim of his own radical ideas about building automobiles. Sensing that the Tucker 48 sedan was too revolutionary and too advanced, a shadowy group of auto industry insiders banded together to block its production, enlisting the help of Senator Homer S. Ferguson. Though the film declares it’s based on a true story, and is not a documentary, few viewers questioned the blockbuster’s narrative.

As is often the case, the truth isn’t quite that simple. In 1946, Tucker signed a lease on the Dodge Chicago Aircraft Engine Plant, but was forced to raise $15 million in capital in just eight months before the War Assets Administration (WAA) would let him take occupancy. To complicate things, the Lustron Corporation also laid claim to the plant, leading to a protracted legal battle that further stretched the resources – and attention – of Preston Tucker. It would be September 1947 — 14 months after the lease for the property was signed — before the Tucker Corporation moved into its Chicago assembly plant.

Preston Tucker circa 1948. Remaining images courtesy AACA Museum, Inc.

Even after taking occupancy of the plant in September 1947, the challenges faced by the Tucker Corporation were far from over. Unable to produce a suitable engine in-house, Tucker instead opted to buy Aircooled Motors to ensure a steady supply of drivetrains for his automobiles. Even these Franklin helicopter engines required a bit of a redesign, and Tucker engineer Ben Parsons was charged with converting these from air-cooled to liquid cooled. Knowing that a steady supply of steel would be necessary to produce automobiles in the volume he envisioned, Preston Tucker attempted to purchase a steel mill (two, actually) as well, without success. Depending upon perspective, this was either a financial decision from the WAA, or the early stages of a government-backed conspiracy against the independent automaker.

His troubles with the Securities and Exchange Commission (SEC) began even before the Tucker 48 was in production. To raise badly needed capital, Tucker began selling accessories (such as car radios) to consumers, who would also receive a guaranteed spot on a dealer’s waiting list for a Tucker ’48. The corporation sold shares of stock and dealership franchises as well, and the SEC objected to the latter for one primary reason: The Tucker 48 did not yet exist in production form.

Internal strife added fuel to the fire. When Tucker Corporation chairman Harry Aubrey Toulmin, Jr. was forced out of the company in September 1947, he penned a letter to the SEC questioning the way that Preston Tucker used the funds acquired through the sale of Tucker Corporation stock. It didn’t help matters that he also questioned the viability of the Tucker 48, stating that the prototype “does not actually run, it just goes ‘goose geese.’”

When radio personality Drew Pearson advised his listeners that the Tucker 48 prototype demonstrated “could not even back up,” the public – and potential Tucker dealers – began to question the viability of the Tucker Corporation. As the lawsuits piled up, the value of Tucker Corporation stock crashed, falling from a high of $5 per share to a low of $2. Forced to defend himself and his namesake corporation, Tucker purchased a full page in national newspapers, penning a rebuttal that hinted at an SEC conspiracy.

Larry Clark in Tucker 1044.

Preston Tucker, along with many of his employees, went on trial in October 1949. Three-and-a-half months later, after deliberating for 28 hours, the jury returned a verdict of not guilty on all accounts, for every employee on trial. Tucker had won a moral victory, but in doing so had lost his factory and any chance at redemption, and the assets of the Tucker Corporation were sold off later in 1950.

Clark’s Tucker Talk comes from a unique perspective. The historian is both an attorney and a business school dean, who currently serves as chancellor of Louisiana State University Shreveport. A long-standing member of the Tucker Automobile Club of America and the Society of Automotive Historians, Clark successfully lobbied for Preston Tucker’s induction into the Automotive Hall of Fame.

“The Tucker Business Model: Why the Feds Went After Preston Tucker (and why they failed)” will narrate the details of the SEC charges against Tucker and his company, while drawing parallels to modern-day innovators like Tesla. The presentation, sponsored by the AACA Museum, Inc. and the Tucker Automobile Club of America, will take place from 1:00 – 2:30, and will be followed by a question and answer session.

Seating is limited, and advance registration is required. For additional details, or to register, visit AACAMuseum.org.