25 Jun Tucker v Porsche Part 3
Why do some people fail and others succeed in the auto industry? The annals of the motor industry contain numerous examples of entrepreneurs, car names and car companies that featured briefly, massively, or sometimes even ignominiously. Preston Tucker and Ferdinand Porsche were two historical contemporaries who started fledgling car companies at about the same time, but in quite different environments. During his post-graduate studies at the University of Tasmania, Leon Joubert made a fascinating academic comparison of their fortunes. Following is the second of a three-part article that, with his kind permission, draws extensively from Leon’s research and thesis.
Part Three: Tucker v Porsche
In their respective locations (the USA and Western Europe), Tucker and Porsche probably faced fairly similar environments in 1946 in numbers of potential competitors. But the orders of magnitude of resources were very different. In both environments, car manufacturing had largely been suspended for the duration of WWII while manufacturing facilities were given over to military demands. Post-war, the key difference was that the US manufacturing industry was intact with a ready and skilled work force at its disposal, whereas that of Europe was effectively in ruins.
The fact that the well established US car industry was intact and, depending on the availability of raw materials, ready and willing to meet the pent-up demand of a large population that had been denied new cars for many years, and had considerable amounts of demobilization funds to spend, created a very competitive environment for Tucker to conquer.
Porsche had no immediate threats in 1946 from any volume car manufacturers who were likely to restart large scale manufacturing in post-war Europe. In fact, a substantial proportion of the erstwhile European car industry was disappearing behind Churchill’s ‘Iron Curtain’. Porsche’s engineering skills were probably very well suited to make best use of the limited available resources, such as cast-off Kübelwagen components and aluminium (for the hand-made bodies of his cars) to produce small numbers of sports cars for a niche market.
Post-war there was a surplus of unwanted technical skills and relatively high-tech materials and components available in both countries, though obviously the material and resources situation in the USA was very much better than in war-ravaged Europe. Thus Tucker could find a huge, unused factory complex to lease, while Porsche had to work in semi-exile from an abandoned saw mill in Austria.
A good example of Tucker’s access to technology can be seen from the relative ease with which he obtained the (unusual) flat-six air cooled Franklin helicopter engine to power his car. He had previously tried to build his own H6 engine, and also experimented with a Lycoming aircraft engine.
Porsche had far fewer material resources at his disposal, but his engineering reputation attracted a group of exceptionally competent people, several of whom had previously worked in the Porsche engineering consulting firm. Karl Rabe, Erwin Komenda (who designed the body of the Porsche 356), Karl Frolich and Hans Mickl were all designers and engineers who would end up spending a lifetime with Porsche.
In 1946 there was very little, if any, co-operation or relationships between competing firms in the motor industry. If anything, competition bordered on aggression as is evident from the claimed actions of Peugeot and Renault to have Porsche accused of war crimes, and the often claimed ‘conspiracy’ by General Motors, Ford and Chrysler to have Tucker prosecuted for fraud and eliminated as a potential threat.
Societal, particularly governmental, influences on the fledgling Tucker and Porsche automotive businesses were enormous. Much has been written about the political economic system that existed in the USA during the Roosevelt Administration. Some commentators have called it “government by decree”, others have used the term “capture theory of regulation” to describe government agencies that had become ‘captured’ by their need to regulate and hence stifle entrepreneurism.
Tucker ran a gambit of conflicts, negotiations and confrontations with the War Assets Administration, the Securities and Exchanges Commission, the National Housing Agency, the Justice Department and various politicians. Porsche was viewed as a ‘war criminal’ and had to restructure his consultancy business and create a new car manufacturing company in a country divided, largely destroyed, and then partially ruled, by conquering armies and administrators. For neither man the entrepreneurial environment was anything like ideal, but Tucker should have had the more positive societal environment in 1946 in which to launch a new car.
Was Tucker just a short term idealist? Since his company only lasted a very short time, the question is hard to answer beyond acknowledging that the motor industry is a long term industry and that Tucker seemed to have expected success to arrive very quickly on the back of a car which he personally believed would revolutionise the motor industry.
Ferdinand Porsche was a long term strategist, as was his son. Whether Ferry could have envisaged in 1946 that his family would, by the 21st century, control some 44 manufacturing plants that employed 350 000 people and made 25 000 cars of more than 120 different models a day, we’ll never know. But his engineering and management skills and strategic foresight gave Porsche a car design that would endure for 17 years, while at the same time he also established a lifetime of income links with Volkswagen. Porsche (father, son and almost every family member that followed in the company) may have been motor industry specialists, but they were also able to prove that they were equally capable as management generalists.
The result
In 1946, immediately after the end of WWII, two motor enthusiasts and idealists started fledgling car manufacturing companies at around the same time on opposite sides of the Atlantic. One idealistic enterprise failed quickly but the other grew into one of the world’s most powerful forces in the global motor industry. Curiously, both start-ups followed rear/mid-engine designs with horizontally-opposed engines that were regarded as fairly unconventional and even revolutionary at the time.
So why did one succeed so well and the other die an early death?
Some of the differences between them that probably had important influences on their separate outcomes can also be traced to their intellectual resources and societal environments.
- Porsche had knowledge and experience that Tucker did not
- Porsche was an expert, which Tucker was not
- Porsche was not an improviser. Tucker was – probably to his disadvantage
- Porsche was a proven innovator, Tucker only aspired to be an innovator
- Porsche started with small capital requirements, Tucker set large requirements
- Porsche had valuable social capital; Tucker seemingly did not
- Tucker lost his conflict with his political-economic environment, Porsche didn’t.
As the motor industry has proven time and time again, it is not just a very good design or product that will guarantee success. The entrepreneurship capabilities, intellectual resources and societal environments with, and within which a completely new car is developed and launched can also often be the deciding factors between success and failure.
Leon Joubert
SA-born Leon Joubert has a multi-storied career as a banker, a Zimbabwean tobacco producer, and a specialist fleet and asset management consultant. He is a post-graduate alumni of the Wits School for Business Leadership and the University of Tasmania. Motoring has been a lifetime interest and he has been a freelance motoring writer for many years and is also a former Chairman of the South African Guild of Motoring Journalists. He competed successfully in motor sport at national and international levels with works teams and is still very active in classic car activities. He is a life member of the Porsche Club of Tasmania, is married to Gail, and they live in Old Beach, Tasmania.
