The Freeman 1989 - The Ludwig von Mises Institute

8 THE FREEMAN. JANUARY 1989David vs. Goliath aspect, always a sqbject forpopular appeal. At the end of the -Coppolamovie, for example, Tucker is deploring thefact that there's no place for the little guy in theautomotive business. This is in line with thefrequently expressed idea that nobody can getrich anymore. We heard that in 1948, just as weoccasionally hear it 40 years later. Anybody candisprove it, however, by getting the latest copyof the Forbes 400 wealthiest people and notinghow many current multimillionaires were pennilessor had not even been born back in 1948.There have been numerous opportunities whichwere spotted by people like Ross Perot, SamWalton, or Steven Jobs.Tucker's point was that the little guy could nolonger enter the carmaking business. My pointis the same, with the added proviso that carmakingis so competitive and risky, and thecapital requirements are so high, that it alsoexcludes "big guys." If there are tg be newentrepreneurial ventures in carmaking, theywill logically be carried out by well-financedcompanies who already have expertise in heavymanufacturing. You might think, for example,that a firm like Deere & Company would use itsexperience as a tractor builder to move into passengercars. Such companies avoid car manufacturingas they would the plague, knowingthat it would mean almost certain losses.The automotive manufacturing businessdoes, however, offer countless opportunities forpeople in related lines. If car building itself is a"big guy" business, the industry continues toprovide excellent opportunities for hundreds ofsupplier firms. There have also been entrepreneurialfirms who came up with new automotivetools and ideas. Add to that the companieswhich specialize in modifying and rebuildingstock cars for select markets.Tucker himself, if he had possessed moreself-understanding and business savvy, mighthave prospered as a custom car remodeler. Hedid have a love of cars and he had experience inthe automotive field. In a way, the Tucker caritself was a customized remodeling of existingcar concepts. Tucker's use of the Cord transmiSSion,for example, showed that he understoodnifty innovations which somehow hadn'tsucceeded in the market. But one of Tucker'sproblems was in being carried away by a"dream" while ignoring the practical workneeded to apply it for useful purposes. Merepossession of a dream does not excuse a personfrom exercising prudence in business relationships.Though Tucker himself escaped convictionon fraud charges, it is fraudulent at this late dateto blame his failures on the Big Three automakers.There are lots of sins we can lay at the doorof GM, Ford, and Chrysler managements. Theyhave sometimes been arrogant and complacent;they have occasionally misjudged their markets;they have been sluggish in coping with the newworldwide competition. Their faults are typicalof big companies: poor communications, slowresponse to change, and even bad habits growingout of too much success. Most of the time,however, market realities tend to correct suchproblems. And in criticizing the Big Three, weshould never forget that they are the companiesthat were most influential in putting the nationand even the world on' wheels.Let us also be careful not to add Tucker'sfailure to any catalog of Big Three wrongs.There's simply no evidence that any Big Threecompany was more than an innocent bystanderwhile the Tucker venture was running its erraticcourse. Tucker did himself in and lost moneyfor lots of trusting shareholders and prospectivedealers at the same time. And Tucker was nevera victim of anybody or anything other than hisown ineptitude. The Tucker Torpedo was a dudfrom the start, and Tucker was the triggermanwith faulty aim. 01. Tucker-The Man and His Dream, which opened in manyAmerican theaters in early August 1988.2. Perry R. Duis and Glen E. Holt, "The Tale of the TinGoose," Chicago, October 1982.3. Lester Velie, "The Fantastic Story of the Tucker Car," Collier's,June 25, 1949.'4. See Alfred Sloan, My Years With General Motors (New York:Doubleday and Co., 1963). It carries a photo of the "dream car"designed by GM Styling and introduced in 1938 to test consumerreaction to advanced ideas.