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Chapter 17 Headlines, Headlines, Headlines Book: The Indomitable Tin Goose Subtitle: The True Story of Preston Tucker and His Car Author: Charles T. Pearson Publisher: Abelard-Schuman Year: 1960 |
17 HEADLINES, HEADLINES, HEADLINES
WITH THE STOCK ISSUE closed there was no immediate need for more publicity, but it seemed as if some kind of blood disease kept erupting in unpredictable spots. When one inflamed area calmed down another would erupt, and they all resulted in headlines.
A few days before the issue was closed there arose a story, which must have circled the world in hours, that the Tucker car wouldn't back up.
Ever since Colonel McCormick had bumped his head against the top he had been wondering about reports that the show car was a phony and wouldn't run. One day he called Frank Sturdy, the Tribune's automotive editor, and told him to go out to the plant and do a story on the Tucker car, and find out whether it would actually run.
Sturdy fought his way through one department after another, where people gave him the run-around, passed the buck or refused to see him at all. He spent weeks trying to get the interview set up, which didn't improve his disposition in the least, and the Colonel was getting impatient. Finally a private showing was arranged, handled personally by Lee Treese, vice president in charge of manufacturing, with Gene Haustein driving. Sturdy had to settle for a test chassis because the complete car was on display in Milwaukee.
Sturdy wrote a little more than a column with a two-column photograph, and the story was fair and reasonably favorable to the corporation except for one paragraph toward the end, under the subhead “Test Chassis Can't back up.” Considering the rough time they had given Sturdy they got off easy.
“The hydraulic torque converters on it are not equipped with a device to permit reversing,” the story said. “Treese said a converter with a reversing method is being built.”
It was true enough that the test chassis would not reverse and neither would the car, but it was neither bad engineering nor an oversight. The engineers were still trying to eliminate gears by using variable pitch vanes, and if the torque converters worked except for reverse, gears could be added. But there was no point in worrying about reverse gears until the torque converters proved out, so they simply didn't bother with it.
Tucker wasn't greatly concerned because he knew it was no problem, and he was a strong believer (at this time) in Henry Ford's philosophy, that if they spelled his name right he didn't care what they said about him. The story actually did no great harm, though dealers later said the first thing they had to do after they got a car was to back it up, because the public had heard the story and insisted on seeing for themselves.
The next story to make headlines was the resignation of Colonel Harry Aubrey Toulmin, Jr., as chairman of the board of directors. Toulmin was a patent attorney with offices in Dayton, and Tucker had met him while with Higgins in New Orleans. When Toulmin was elected chairman, Tucker hoped he would bring a more businesslike administration to the corporation. Tucker had neither the patience nor talent for the constant maneuvering and red tape of big business, and he counted on Toulmin to fill this gap.
The first handout announcing Toulmin's appointment said he was an officer or director in seven other corporations, the author of twenty books and holder of the Distinguished Service Medal and the Legion of Merit. The list of his citations, honors, and degrees filled more than two pages.
As befitted his position and background, Toulmin was impatient with the help and a bit on the pompous side, radiating an aura of executive importance. When he bailed out it was in the same grand manner, and he set a precedent for the exodus of executives that was to follow, holding a press conference in Dayton to tell the world he was leaving and what was wrong with the corporation and with Tucker personally.
Toulmin said he resigned “because Preston Tucker would not agree to my written demands that any money raised from the public should be spent and administered under the strictest regulations and controls normal to legitimate business.”
The same afternoon in Chicago, Tucker told reporters that “not one cent of the $15,000,000 raised through the stock issue has been spent in any way,” adding reasonably that it would be hard to get rid of that much money over the week-end. The issue had only closed the preceding Friday. Tucker added that part of the expenditures Toulmin was complaining about included $60,000 to his firm for patent work, with vouchers in process to bring the total up to around $73,000.
There was no question Toulmin had a point, even if he did jump the gun in protecting the stockholders, but Tucker had a point too. If he had to operate under the kind of regulations and controls Toulmin was accustomed to, he would never get anything done, because he had to move fast. And to move he had to push his board along with him, not drag along behind it.
Except for a few days of bad publicity Toulmin's resignation was no great loss, and to the general public it was an administrative squabble that was soon forgotten.
The last echoes of Toulmin's blast had barely died away when two more top officials were out, threatening legal action.
They were Hanson Ames Brown, executive vice president, and James D. Stearns, treasurer and comptroller. Brown and Stearns, along with three minor executives, said they had been fired. Tucker said they resigned. Rockelman took over Brown's post.
In retrospect, the friction and final break between Tucker and most of his original group of experienced top-flight automotive men is no mystery, though at the beginning it could hardly have been foreseen and—even if foreseen—probably nothing could have been done about it.
Without exception, these men had worked with big established companies which had, for all practical purposes, all the time and money in the world. If a model cost twice as much to develop as orginally estimated it created no great crisis, and if some new design remained in the works three years, there were still current models to fill in. When a new model was found to have some serious defects, or failed to go over with the public, as happened with almost every company at one time or another, they weathered the crisis, even when hundreds of cars had to be called in after they were sold to correct some defect.
With Tucker it was different—he had less than a year to develop and get ready for production an entirely new automobile, and only a limited amount of money with which to do it. The veterans with Tucker simply couldn't adjust. It was beyond them. It was completely outside their experience, and most of them were too old to change.
Without the names and prestige of these men, Tucker could never have sold his stock or even obtained the plant, but when the going got rough they were dead weight. So he turned immediately to the men he knew intimately, who were used to handling such problems as a matter of course. Problems were their business, and their life.
These were the men he had known at Indianapolis, who could design and build a complete racing car, with the precision of a fine watch, in less than a year, and make major repairs in a pit stop that would take weeks in an ordinary garage or repair shop.
The most important of these men, whom Tucker later made chief engineer, was Eddie Offutt, a quiet, unassuming man who got things done, and wrote his memorandums after the job was finished. When Tucker first met him Offutt was a stocky man in his early 40s, soft-spoken and never given to throwing his weight around. Working with Harry Miller had given him a background any engineer might envy, and like Miller he was accessible to the lowest-paid mechanic, yet wasn't impressed by the most officious vice president.
Deliberate in action and speech, Offutt seemed out of place in his office, where his men worked with him, rather than under him. He wore a hearing aid which, in the office, was usually turned off because he couldn't tune out the electric typewriters. At heart he was a monkey wrench engineer. He could solve his problems on paper and did, but when the job was being put together Offutt usually was there ready to take a hand, and see that it was done right.
Another Indianapolis veteran was Gene Haustein, who worked with Tucker and was an all-around test driver, mechanic and trouble shooter. Haustein knew automobiles from the grease rack to the track. Like Offutt he was soft-spoken and direct, unimpressed by titles or rank, and ready to take on any job that needed to be done. One day there was a press conference when a demonstration car was needed fast, and Tucker was nowhere in sight. Haustein was the only man in the place who would take a car out of the line without waiting to get permission from somebody. He drove it up, brought it to a smooth stop, and took newsmen for one of the most thrilling demonstrations in their experience.
But men like Offutt and Haustein and Leabu didn't impress the bankers, who wanted titles, even if the titles by now were meaningless. Offutt and the men with him got the job done and effectively, but they didn't have the prestige to attract heavy money.
While Tucker lost some good people through the resignations, he was picking up others as he went along and, for the time at least, was breaking about even. One of the most impressive in the new crop of VIP's was Philip Lockner, who rattled diamonds in his hands the way other people jingle small change or keys. Lockner always seemed to be as well supplied with money as with diamonds, and was rumored to have a diamond mine in his basement. His association with Tucker started in the rain early one Monday morning in New York.
Max Garavito arrived at his office at 39 Pearl Street about 9 o'clock and found a man huddled against the side of the building. He unlocked the door and took the man into his office, which extended across the block with another entrance on Church Street. Then he heard somebody beating on the Church Street door. The man at the other door was Lockner.
The two men had raced all the way from Cape Town, South Africa, to get a Tucker franchise, and had missed each other by minutes at various stops along the route. The race ended in a tie when they took off their coats in Garavito's office. Before they even sat down both men were talking at once. Garavito interrupted, suggesting that they go out and talk it over at breakfast.
When they got back they had agreed that Lockner would take the distributorship and split the dealerships with the other man, whose name is lost somewhere in the dusty records. South Africa was taken care of.
Lockner paid $80,000 for his franchise and became the corporation's biggest stockholder with 50,000 shares, which cost him $250,000. As was fitting for the biggest stockholder, Tucker had him elected a vice president and director. (For another $250,000 Tucker probably would have resigned and had him appointed president.) Lockner spent a lot of time at the plant and had a part in making some important decisions, but none of them saved his investment. When he finally gave up he stopped in New York to dump his stock, causing a serious but temporary slump in the price.
Throughout the next six months the Tucker plant looked like an annex of the United Nations, with people of almost every nationality and color passing through. Movie stars, generals, pugilists, visiting royalty and foreign capitalists rubbed shoulders in Tucker's reception room, and broke bread with the peasants in the plant cafeteria.
Between greeting important visitors, discussing deals and holding up his end of intramural arguments, Tucker had little time for his engineering department, which was beginning to despair of ever getting the Tin Goose to a point of production. Tucker wasn't overly concerned. He felt completely confident that a satisfactory design would be worked out.
But he was worried about the shortage of body steel at the time, and still more worried about digging up new sources of capital before they got in another bind. Even with the $17,000,000 in the bank, he knew there would be rough times ahead before income reached the break-even point.