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Chapter 24 The Last Lap Book: The Indomitable Tin Goose Subtitle: The True Story of Preston Tucker and His Car Author: Charles T. Pearson Publisher: Abelard-Schuman Year: 1960 |
24 THE LAST LAP
BEFORE THE FIRST week in December ended it was apparent to almost everyone that Thanksgiving hadn't brought the company much to be thankful for, and the prospects looked even rougher for Christmas. With all their performance and dash, the hopeful new Tucker automobiles were on the last lap, and the corporation had troubles that couldn't be handled in a pit stop.
Not that the company was broke. The balance sheet as of October 31, 1948, still showed more than $16,000,000 in assets, including almost $3,000,000 in parts and materials. Liabilities were well under $2,000,000, and the figure was only slightly higher in December.
After the Thanksgiving holiday, about 300 production workers were called back and they continued putting together the few cars for which there were still complete parts. It was the last hiring and they were kept on only a few weeks. Tucker had stopped drawing his salary months before and all people who weren't absolutely necessary were being let out.
Under the increasing pressure of the investigation, more executives and members of the board of directors were resigning or leaving by request. As money got tighter, arguments became bitter, as in any household. Herbert Morley, director of purchases, resigned, charging Tucker with creating “conditions under which no business can be properly conducted.” Morley certainly was right about the conditions, but whether Tucker alone created them was debatable. Cerf resigned from the board, and with him Barnett Faroll, prominent on La Salle Street. Bryce B. Smith of Kansas City, board member and personal friend of President Truman, bailed out.
D. McCall White, special assistant in charge of engineering and testing, left when his six months contract ran out. Most of us in publicity suspected the chief reason Tucker hired White was for the headline “Former Office Boy Hires Ex-Boss,” though it may be Tucker actually thought he could hurry the process of getting into production.
Losing so many of his key men was hurting Tucker's prestige, not only with the public but with the dealers, even though they were satisfied with the car. A dealers' committee had been formed, hoping they could save the corporation even if Tucker had to walk the plank.
On La Salle Street many financial men blamed the election, saying money was always tight in election years and that Cohu was stalling to see how the election came out. Negotiations with La Motte T. Cohu of No. 1 Wall Street had been initiated by Tucker in September, but Cohu's option expired without any action being taken.
“If the Wall Street man for President (Thomas E. Dewey) had won, the Cohu plan might have gone through,” was the comment on La Salle Street.
As the situation got worse, suits against the corporation multiplied. On December 15 Judge Michael L. Igoe ordered two bankruptcy suits consolidated into a single suit, set a December 22 deadline for the company to file an answer, and set January 4 for a hearing. A few days later newspapers reported that U. S. Attorney Otto Kerner, Jr., had conferred with Hart of SEC and had assigned two assistants to the case. The newspaper stories said Kerner's office had “been checking for possible violation of federal laws.”
On January 3, the day before the hearing, Judge Igoe issued an order postponing all bankruptcy, liquidation and receivership actions against Tucker for another sixty days. The reprieve started speculation that Nash or Willys was interested, and James D. Mooney, Willys-Overland president, was reported ready to step into Tucker's place. Other reports said Rockelman would succeed Tucker, backed by a dealers group.
In the January issue of True magazine there appeared a story which made Tucker feel better, but which was almost lost in the flood of reports on court action, financing troubles and the threat of criminal action by the government. The writer was Ken W. Purdy, True's automotive editor who, the magazine said, had been told to “call it the way you see it and to hell with the advertising angles.” His story added Tucker to the legendary giants in automotive history:
“... men who never quite got over the thrill they felt the first time they stepped on the gas and felt a good car jump beneath them. These men, the E. L. Cords, the Fred Duesenbergs, the Harry Millers, were simply car-crazy. They were queer for automobiles.
“They built cars for men,” Purdy wrote. “The Mercer was such a car, and the Stutz. So was the Cord—if you find one in good shape today, you've still got a hell of an automobile—and so was the mighty Duesenberg, a man's car if one ever rolled down the road. One thing and another (put the depressions of '21 and '31 at the top of the list) killed off these cars, and from the last Cord to the first Tucker, the field for the car engineered to be years ahead of its time was clear. In advanced engineering and high performance the Tucker occupies a rightful place of succession in this noble line.”
Purdy drove the Tucker and, like McCahill, said it lived up to its promises:
“The car will do 125 miles an hour. It will deliver 26.2 miles to the gallon of gasoline at 45 m.p.h. It will accelerate from a standing start to 30 m.p.h. in three and a half seconds, from 0 to 60 in ten flat. (For laughs, try that on your present car.) It is the safest car ever built, period.”
The tribute in True magazine didn't pay off any creditors, or have any appreciable effect on government agencies or on Judge Igoe, who ordered the plant shut down on a maintenance basis January 7, to remain in effect until changed or canceled by the court. Payment of salaries was stopped except to an assistant secretary and the comptroller, who had already resigned.
On February 15 Kerner announced a grand jury would investigate Preston Tucker “and certain aspects of the Tucker corporation.” The grand jury was set to open the following Monday and was expected to last thirty days. On the day of this announcement, it was reported that an 800-page confidential report on Tucker had been sent to the Justice Department by SEC.
In Washington at the time, Tucker said the hearing “will provide a welcome opportunity to explain our side of the story.” When he got back to Chicago he was still hopeful, and worked night and day with dealers groups trying to save the company. Before the hearing opened a new board of directors was elected, composed entirely of Tucker dealers and distributors. Tucker and four board members had offered their resignations. Those of the board members were accepted, but the new board asked Tucker to stay on as president.
It was a gloomy Monday when the grand jury investigation opened, matching Tucker's feelings as he delivered the first installment of an estimated twenty-five truckloads of records to the District Attorney's office. Kerner had demanded the company's books, engineering data and correspondence since December 1, 1946, and Tucker saw a last chance to show the people of Chicago, at least, that he had built automobiles that would run.
Without a traffic permit or an escort, Tucker, driving a powder-blue 48, led a parade of eight Tuckers which stalled traffic when they pulled up on the Adams Street side of the Federal building in the Chicago Loop.
In the rain, while people crowded around the cars, a few employees who still hadn't given up, opened the front luggage compartments and took out armloads of records, which they carried into Federal building where the grand jury was waiting to start. From the sidewalks and streets people called to him:
“We're with you—we're pulling for you, Mr. Tucker.” With only a handful of officers and directors left, Tucker asked Dan Leabu to pinch hit as secretary-treasurer until somebody else could be found for the job. Leabu agreed.
Shortly after, there was a telephone call from someone who said he represented a group that was interested in supplying the necessary capital, and wanted to talk with Tucker. Leabu said Tucker was out of the city, but he could represent him, and if the man wanted to check he could call Tucker. The man didn't give his name, didn't say who he represented, but said he would call later.
“A week later the same man called,” Leabu said. “Tucker wasn't in so he agreed to see me, but said he wouldn't talk to anybody but me or Tucker. He told me to come alone that afternoon and gave me an address. It was in Cicero.”
Haustein, who with Leabu and Offutt was one of the last men still working with Tucker, tuned up one of the cars and had it washed and shined. Leabu took projection charts and graphs showing production schedules over one-, three-, six-, and twelve-month periods: the percentage of completion of production lines; inventories of parts and materials; estimated profits, and the number of employees that would be needed. They set the figure at 2,000 to start, climbing to 15,000 after a year's time.
When he got to the address he found a man at the door of a two-story building who took him to an apartment on the second floor. There he was introduced to a man sitting in a wheelchair with a light blanket over his legs. Leabu said he looked between 45 and 50 years old.
Leabu opened his briefcase and started telling the man what he thought any potential investor would want to know—what their position was now, and what the prospects were for profits on the investment.
“We're not interested in that information,” the man in the wheelchair told him. “All we want to know is how many men you're going to hire over the first six months after we put our money in, and what your total employment will be.
“How much can you put in?” Leabu asked. The man told him $10,000,000 or more, whatever they needed. Leabu said he asked the man who his principals were, and the man opened a magazine that was lying on the table and pointed to one of the pictures. (The magazine was the November 28, 1948, issue of Life, with a story under the caption “The Chicago Rackets” about the men who were in line to take over the Capone empire.)
“This is the boss,” the man said.
Leabu asked him what they wanted for security—stock, someone in the treasurer's office, people on the board of directors?
The man said they didn't want any stock or any positions in the company, and they didn't want any security.
“Then what do you get for your money?” Leabu asked.
“He told me,” Leabu said, “that they wanted the right to place a number of their own men in jobs in the plant. I asked him, 'How does this protect your investment?' He said 'We want five per cent of your employees to be our men. They can be stock chasers, crib attendants, in the shipping department—anywhere they can move around and meet lots of other workers.'
"I still didn't understand until he laid it out for me: they wanted the gambling concession in the plant to sell mutuel tickets, numbers, whatever they were working on at the time. He said they expected a return of a million dollars a year and it would be no different from what was already going on in other plants around the country, with or without the knowledge and consent of the management.
“Just to get out of there in one piece, I said I would talk it over with Tucker, and he told me to be sure no one else knew about it.
“While I was waiting for Pres to get back, I saw a big story in the papers that the Justice Department was all ready to move in on the rackets. In about a week I got another call from the same man. He said the deal was off, that there was too much heat and he would let me know. That was the last I heard from him.”