forecasting trends

After the end of World War 2, the U.S. Government wanted to de-monopolize the domestic auto industry. If there were more auto companies, there would be more clamoring over defense contracts, and if the world ever went to war again, it would be cheaper to finance. The government had a lot of manufacturing plants that were practically dormant after the war, and they made loans available to smaller firms to buy them and start producing cars. This infuriated the Big Three.


Startup companies like Tucker felt the wrath of the Motor City, all right; but not as much as has been speculated over the years. Chrysler, being the smallest of the Big Three had the most to lose, and might have bought a lot of steel and other supplies that could have gone to Tucker, but Ford and GM didn't really have much to gain by trying to crush an independent like Preston Tucker. The car was excellent, but it was really a Buick that would have had to have ben sold for at least a Cadillac price. There was no way Tucker was going to compete with the Big Three in purchasing power...his startup costs and material costs , not to mention labor, would have been staggering.

He also didn't really know the right people, or have the clout to get them to work for him. He was a small-time promoter, and he was out of his pond in Detroit. He was headstrong and demanding, and not always wise to the best ways to conduct his business affairs. Ther were gaps in his books, and a lot of his machine-tool work went to his mother's tool and die works...he also enjoyed a rather lavish life-style. The SEC was concerned with all of this, and the investigation centered around his claim that he had an assembly line in operation, but the cars were just trickling out of the facility. In fact, it was 1949 before any production cars were built, and the company showed the prototype in 1947. And, only 51 were ever built.

Tucker was undercapitalized, also. And, if the company would have survived the SEC fiasco, there would have been a serious challenge immediately ahead...Ford and GM basically declared war on each other in the early '50's. The idea was to sell the most cars, and to do this they slashed prices to the bone. It sold a lot of cars, and didn't really produce a clear winner in the sales race, but it virtually destroyed the independent automakers like Studebaker, Hudson and Kaiser. One marketing study at Studebaker showed that to make even the smallest profit on a sale, a Studebaker would have to sell for at least 2500 dollars, and both Ford and Chevrolet could sell an identical car for around 1800 dollrs and still make money. Tucker never would have been able to compete with that.

And, there's the Packard story...Packard began selling medium-priced cars in the late '30's to survive. One line wasn't enough to sustain the company. The cars were good, but not distinctive, and it bled the name white of all it's prestige. Tucker would have to do the same thing...one model just wouldn't be enough to maintain the company. Economies of scale...

The car was a noble effort, and that's why so many of them are still around. But, it would have been a Herculean task to form a new auto company in the late 1940's, even with government help. Kaiser did it briefly, but the company itself was already established. And, Henry J. Kaiser wasn't a car man, either. He built cars to use up a lot of extra factory capacity and excess raw materials left over from W.W. 2.

In the end, the idea that Detroit did Preston Tucker in out of fear is rather overplayed. Tucker was a brilliant promoter, but not the world's best businessman. The car was excellent, and Tucker did bring the ideas inherent to the Tucker Torpedo to the public's attention. The car deserved a much better fate, but the whole venture was a longshot at best.

But we're all a lot richer because he took the chance...and that's really the whole point of the movie...



Dan