DMC DeLorean Motor Company
HOW DELOREAN GOT STARTED
the very start of the project, the DeLorean name was practically
a household word across America. The flashy, handsome head of two
General Motors divisions, DeLorean seemed on the verge of the
presidency of GM when he walked out. With a youthful image and an
extraordinary track record at Chevrolet and Pontiac, he was in an
ideal position to start his own automobile company. But some
thought that it was perhaps too ideal. News reports suggested
that DeLorean used the magic of his name, his former association
with GM and dreams of high volume sales to each (for a total of
$8.6 million) in what the dealer prospectus clearly admitted had
a "high degree of risk." There were also reports that
he had raised $2.5 to 3 million through a sports car partnership,
another $18 million through a "research limited
partnership", about $25 million from the Bank of America and
another $1.5 million from investors that included Johnny Carson.
was also suggested that DeLorean used these same attributes,
along with the bait of employment for depressed areas, to solicit
offers of capital assistance from a number of U.S. cities, Puerto
Rico and other foreign countries. He ultimately turned them all
down in favor of Northern Ireland, building his assembly plant
there with loans and loan guarantees of some $135 million (at the
exchange rate of $1.83 to the pound). The Northern Ireland
location offered DeLorean several advantages: stronger backing by
the government, lower wages for workers and easy access to the
order to carry out his plans, DeLorean built around himself a
staff that included some of the automobile industry's top
executives: Eugene A. Cafiero, as president and CEO, was the
former president of Chrysler; C.R. "Dick" Brown, vice
president for marketing and president of DeLorean Motor Cars of
America, was well known for his success in setting up the
nationwide Mazda dealer network; William T. Collins, chief
engineer and designer, had been chief engineer at Pontiac; Jonas
E.C. Kjellberg, vice president for international sales and
marketing, was past president and CEO of Saab-Scania of America;
Charles K. Bennington, managing director of the Dunmurry plant,
had served in several positions with Chrysler of Europe; and
Bruce Mc Williams, vice president for marketing, was the former
vice president of British Leyland (Jaguar). There were many
others from Chrysler - both domestic and international - General
Motors, Aston Martin, and Jaguar.
DeLorean became serious about putting his car (then called the
DMC-12, subsequently "DeLorean") into production, work
began on a prototype, Collins and DeLorean brought their ideas to
several coachbuilders in Torino, eventually selecting Giugiaro.
By October 1976 the first prototype was completed with a second
on the way. The stunning Giugiaro design was to be powered, at
the outset, by CitroŽn's Comotor Wankel engine. Fuel economy
problems with the powerplant, however, led to experimentation
with several other engines; the final choice was the
French-produced Douvrin PRV (Peugeot-Renault-Volvo) fuel injected
The pressures of actual production forced other changes to be made as well. Collins and DeLorean had originally intended to build the DeLorean's substructure using a special process known as Elastic Reservoir Moulding (ERM). In short, the process would allow DeLorean to build the complete substructure of the car from a hybrid plastic-fiberglass material without the need for a metal frame. As pressure to produce the car grew, however, much of the engineering work on the car was turned over to Colin Chapman at Lotus, who substituted a variation on the Lotus steel backbone frame for the original plastic substructure. In addition, Chapman used another Lotus technique, Vacuum Resin Injection (VARI) to form the substructure of the DeLorean. Of the original prototype, only the stainless steel skin, gullwing doors and V-6 engine were retained.
JOHN DELOREAN'S COMMITMENT
the DeLorean factory was moving slowly toward the promised 20,000
annual production goal for 1979, it began to appear to some that
John DeLorean had more at stake than the production of the
DeLorean. Says a former DMC executive, "Before we got
funding for the Northern Ireland factory from the British and
Irish governments, John had said he'd spend one hundred percent
on his time on the car. That before production he'd spend forty
percent of his time over there, and once production started,
eighty to ninety percent. As it turned out, the minute we got the
funding, he started working on five or six other projects. He
even worked on a bailout of Chrysler for six months in 1979 -
and, as you can imagine, the British government took a dim view
such as these and the reason he spent such little time in
Northern Ireland, "because he thought the IRA had him
marked" as "part of a hatchet job," enrage
DeLorean. "We had a former PR guy... (William F.) Haddad,
who claimed to have such close ties to the Kennedy's...that he
could help the company with any troubles we might encounter in
Northern Ireland....He was absolutely scared silly to go to
Belfast, where we had asked him to spend ninety days to
restructure our image with the British press." It's Haddad,
DeLorean says, who is behind many of the vicious rumors.
was instructed by the British government to keep away (from
Belfast and Dunmurry) because I was considered a political
target," says DeLorean. Being part of the manufacturing
scene has never been DeLorean's strong suit either. So he decided
to "contribute more by being in other areas." Even so,
he says, he averaged ten to twelve days a month in Nortern
Ireland during the past two-and-a-half-years.
al of DeLorean's activities during this period can be documented,
but it was reported that he tried to arrange distribution rights
for Alfa Romeo, Lancia and Jaguar. Other activities have also
been suggested by the press, though this should come as no
surprise since DeLorean was deeply involved in ancillary
activities ewven while he was working for General Motors.
sources say that DeLorean in fact spent little time on the car
project, "certainly not as much time as I would have spent
if it was my baby," said Collins. Another source accused him
of spending "maybe an hour here and an hour there" in
building the company. Continuing, "A lot of the (company's)
money was spent trying to build John's personal empire and other
projects outside the car company. Everybody...tried to stop
him...but he wouldn't...."
reaction to such accusations is swift and vehement:"That's
all bullshit! That's been so grossly misrepresented....In terms
of my personal time, my biggest outside investment is my
ski-grooming company in Logan, Utah. I traded my (avocado) farm
in California for it. I've owned that business for three years
and it represents almost the total of my family's income
producing assets.... (Yet) I think I've visited the place two and
a half days total in the three years because I've been working so
hard (on the car). Does that sound like I'm doing outside
By the summer of 1981 a few cars were dribbling off the assembly line at Dunmurry and making their way to the U.S. But along with them came stories that all was not well at DeLorean Motor Company (DeLorean headquarters in the U.S.), DeLorean Motor Cars Limited (the Dunmurry factory) or DeLorean Motors of America (the U.S. marketing arm in Irvine, California). There were rumors of executive turnover, assembly problems, customer complaints and most important, a serious depletion of cash.
as a fact of life in any company, turnover among executives in
the DMC group was quite high. Almost all of the big ewxecutives
have moved on. Why? Bill Collins, who worked with DeLorean over a
twenty year span (1958-1978) at Pontiac, GM and DMC, is more
philosophic than vitriolic about it: "Various peolpe left
because of differing reasons. I left because - although I had
always intended to go with Lotus (in the redesign of the DeLorean
chassis and drivetrain) and actually spent considerable time over
there - I ended up as a supernumerary. When I found my added
input from the U.S. side wasn't desired, I left. It had nothing
to do with John personally, who is a brilliant engineer. I always
got along with him well."
who worked for, or knew, "the man" are not nearly as
kind. They criticize DeLorean for being arrogant, disloyal, surly
and distrustful. Some say he takes advantage of the goodness
inpeople, that he taunted executives and was vindictive toward
former employees. Asked about these purported traits, Collins
responded: "Well, that latter is certainly true. I've had a
running battle with him on stock options (promised to early
executives and later withdrawn) and I've given up."
alleged vindictiveness toward former employees was described by
another former executive this way: "John had a favorite
expression when somebody left him, which was, 'We've got to get
some shit on his shoes.' I don't care who it was, (innuendos and
rumors would be circulated) that the person was a drunk, an
incompetent, on the verge of a nervous breakdown, a crook,
dishonest or some such thing. In every single case he has tried
to discredit people who left him."
for this might be found in comments that DeLorean made to
AUTOMOBILE Quarterly about some of his former
executives. According to DeLorean, Collins left because "he
refused to wrk with Colin Chapman (even though) he put us in
contact with him.... Really, I think his wife wouldn't live in
England." Dick Brown, vice president for marketing, left
"when we got into problems here (in the U.S.). I don't think
Dick is used to dealing with that kind of adversity.... On the
other hand, when we hired Dick, our marketing director Dave Wood
left because he refused to work with Dick." Wood, who had
been with DeLorean for seventeen years at GM, returned when Brown
turnover in financial staff, "headed up by (Thomas) Joe Daly
since the beginning," was caused by the inability to
"hire the guys we wanted." Robert Dewey's
"background as controller at GM...didn't prepare him to run
a company." When he became seriously ill, "including a
nervous breakdown," he was replaced by former consultant
Walter Stryker "as a temporary." But the British
government, "who had the right to control who was in, asked
us to remove (Stryker) because they didn't feel he was
competent." The next financial man, James Stark, had a
"spinal deterioration problem that forced him to spend four
hours a day in traction." He is apparently now on medical
former associate, branded as "incompetent," retorts:
"I find it hard to believe that everyone was
(incompetent). If so, then (John) had a very bad batting average
in hiring, wouldn't you say?" DeLorean also gets faint
praise for his management ability from Robert Dewey, financial
officer with DMC from 1978 to 1981: "Maybe not 'bad', as
some have said. Certainly skillful as a promoter, but without
managerial skills. Whatever he learned at GM, he unlearned at
DMC. He didn't look to the future, only living for today. We had
only one product and it was apparent that we would sink or swim
spoke of "a basic difference between working at GM and
DMC" that affected how things were expected to be - and were
- done. "At GM there's a huge army marching along behind you
in the right direction while you're the knight who's on the white
charger. In a small company that's not true."
how he would treat the staffing situation today, DeLorean first
spoke of the great pressure he was under from the British
government because his company was a sole proprietorship and
their desire for him to hire top executives in the industry.
"And so we wound up with a number of mature executives from
other companies... who couldn't make the transition from a big
Japanese or big American company to a little, nickel-shit outfit
in Northern Ireland without any money. The fact is, if you had to
have something done, you had to do it yourself.... If I were to
do it over today, I'd concentrate on younger, more energetic guys
- a bunch of thirty-two and thirty-three year olds.... With these
senior executives it had been so many years of not doing it
themselves that they forgot how."
executives, however, speak of differing philosophies. Said one:
"Our basic differences were over the level of spending and
John's lifestyle. I believe you spend it when you make it and
told him he was spending other people's money. He didn't like
that." Robert Dewey spoke of a lack of communication:
"John would surround himself with fairly intelligent people,
but he wanted 'yes' men. You can get clones to do that. When you
challenged him on a point, he felt you were challenging him.
You didn't have a dialogue with John."
Executive problems weren't the only ones to arise at DMC. Production and car problems began to appear, too.
all reports, both American and European visitors to the plant
have been impressed. "The DeLorean plant is brand new,"
wrote Road & Track in June, 1981, "... so it's
clean and modern, without several years' worth of crud underfoot
and soot-married surroundings." Centered roughly on the
border between Catholic and Protestant spheres of influence on a
former bog in Dunmurry, Northern Ireland, there are six buildings
with a total of 660,000 square feet of square in the complex. The
assembly line in computerized, and workers are in groups or teams
in which they can rotate their jobs, much the same way the Volvo
builds its cars.
assembly problems were dismissed by then president and managing
director Donald H. Lander (now president of DMC, replacing
Cafiero). In March 1981 Lander told an interviewer, "This is
a quality product." Why, then, did DMC have to set up
Quality Assurance Centers (QACs, but often referred to internally
as "quacks") in Long Beach, California; Wilmington,
Delaware and Troy, Michigan where, under Dick Brown, the cars had
to be "almost totally reassembled?"
the items that U.S. workers fixed were: the fit of the stainless
steel body panels, the hanging of the gullwing doors and
replacement of a too-weak alternator. One published report put
the cost of repairs per car "at one time... (at) almost
$2500." DeLorean admits that "there may have been
isolated cases of $2500 for a car," but "the average is
more like $900." Even so, according to former DMC public
relations director Mike Knepper, the QAC operations were
extraordinarily costly, and "eventually cost $2 million a
many dealers, those handling DeLoreans say that most customer
complaints are "mickey mouse" or about warranty claims.
But dealers themselves have more serious problems. Since there
was no warranty on early DeLoreans, it became a battle between
customer and dealer over payment for repairs. Although 1982
models came with a five year/50,000 mile warranty, many dealers
did not receive payment for work done under warranty.
safety recalls have been issued by the National Highway Safety
Administration (NHTSA) and two by DMC. The NHTSA recalls (one for
1981 models and one for 1982 models) dealt with the possible
failure of the inertia switch to the fuel pump, causing fuel to
continue being sent to the engine in the event of a crash. The
first of the DMC recalls was to replace the nut that holds the
front ball joints together; if it backed off, it could lead to
the collapse of the entire front suspension system. The second
recall was to correct a water drainage problem that could lead to
frozen throttle cables in frigid weather.
to the company's woes were critical writeups in automotive
enthusiast magazines. "The five early cars we hammered about
Northern Ireland were abysmally short of any commercial standard
of acceptability," wrote Car and Driver in July,
1981. "Handling characteristics are somewhat disappointing,
as the DeLorean is not a car you immediately feel at home in, but
rather one that takes some getting used to," said Road
& Track a month earlier. The latter fault was a result
of the switch from a transverse, mid-mounted CitroŽn
four-cylinder engine to the heavier PRV V-6. The PRV powerplant
had to be moved rearward, explained William Collins, because the
upper parts of the accessory drive were too high to allow a
the two greatest design faults of the DeLorean were its excessive
weight and stainless steel skin. The substitution of the steel
backbone frame for the lighter ERM substructure had led to a
weight increase of over 6000 pounds, which in turn took its toll
in performance. "It's not a barn burner," observed Road
& Track, "(with) a 0-60 mph time of 10.5 seconds.
Frankly, that's not quick for a sports/GT car in this price
category." Other Road & Track acceleration
times: Corvette, 9.2 seconds; Porsche 944, 8.3 and Mazda RX-7,
DeLorean's use of stainless steel for the outer body panels of
his car promises years of freedom from rust and corrosion, it
caused new problems of its own. "The steel body shows the
slightest trace of dirt or dust," said Road &Track.
"The stainless steel body picked up all kinds of markings,
from fingerprints to blue jean pockets," echoed Popular
still defends the use of stainless. "I borrowed an
Allegheny-Ludlum stainless steel car, parked it overnight under a
maple tree and hosed it off the next morning, restoring it to
like-new. Try that with paint and you'll get the outline of the
leaves." He did admit, however, that the early cars had a
brighter finish than the later ones. Several DeLorean owners in
recent months have painted their cars, and it has been suggested
that should DeLorean survive, he may well offer the option of a
Finally, the gullwing doors have come in for their share of criticism. Though more of a production than a design problem, their use has been defended equally by DeLorean and Collins. DeLorean calls them "sexy" and "better from the standpoint of side intrusion." Collins call them "a great idea, a good solution for a low car." He adds: "By insisting on a torsion bar, counterbalanced arrangement, we avoided the Bricklin problem (of getting locked in or out because of a power failure)."
the end of 1981 cash flow became the paramount problem at DMC.
Said one former executive: "Our break-even point was about
10-12,000 cars a year. Yet, three marketing studies we made
indicated that if you price a car over $20,000 there ia a
precipitous falloff in sales - that unit sales would be somewhere
around 6000." "The straw that broke the back off the
company," said Robert Dewey, "was John's violation of a
principle of long-standing in the industry. Last fall he decided not
to build to dealer orders, stockpiling orders instead."
was less interested in building cars than he was in building a
conglomerate," said another executive. Some others agree
that this was a major roadblock. "John was so full of
personal vengeance against General Motors and had such a burning
desire to build his empire (that he let it get in his way). When
asked how big he wanted to be, he'd say, 'As big as General
Motors.' Everything he did was to throw it back in Gm's
former executives express opinions on how money was being spent
this way: "John doesn't like financial controls and that
became very uncomfortable for me (so I left). His approach to
being over budget was to change the budget." "We had an
executive group that was well-qualified," said the other,
"with in-depth, experienced people and the company was put
together in rather short order. Not in record-breaking time, but
we had plenty of money and so there was no reason (to do it
quickly). The original objective was to have $90 million and we
ended up with $250 million. But the way the money was deployed is
what caused the problem - and John had full control of
real crunch came on January 5th, 1982 when the company had to
cancel a stock issue that DeLorean had hoped would raise about
$27 million. It was a convoluted plan that would have created
DeLorean Motors Holding Company, which in turn would have become
corporate parent to DeLorean Motor Company and each of its
subsidiaries: DeLorean Motor Cars Limited (manufacturer),
DeLorean Motor Cars of America (distributor in the U.S.) and
DeLorean Research Partnership (a research and development
company). The end result would have been that John DeLorean would
have owned one hundred percent of a Nevada corporation, Christina
(named after his famous model wife), which would own one hundred
percent of DeLorean Manufacturing Corporation (formerly John Z.
DeLorean Corporation), which would then own forty-nine to
fifty-one percent of DeLorean Motors Holding Company, leaving
DeLorean with about forty-nine percent of the venture.
this fell through and DeLorean asked the British government to
bail him out, he was told no - unless he could raise an equal
amount from investors. Finding that impossible, he folded his
arms and asked the government to step in with his receivers, a
move tantamount to declare bankruptcy.
of this writing, the British own the plant and production is at a
standstill. A skeleton crew of about 350, howver, "is doing
routine maintenance...tooling, ...homologation for overseas
markets, ...EPA certification,...plus various engineering changes
to resolve some of the problems we've had," said DeLorean.
The shutdown, according to former officials, was primarily the
result of financial problems: over-expenditure on the car's
redesign, too costly (mostly overseas supplied) components,
overproduction of cars, exorbitant executives salaries and
unnecessarily opulent corporate offices in New York.
preliminary stock prospectus showing salaries of top executives
for fiscal 1979-1980 indicated that executive salaries may well
have been unreasonable for an embryonic company; in some cases
they equalled or surpassed those in long-established car
companies. For example: Eugene A. Cafiero, president, $375,000
annually; Thomas W. Kimmerly, executive vice-president $133,509;
Charles K. Bennington, managing director, assembly plant,
$218,887; and C.R. Brown, vice-president, $172,038. DeLorean
Manufacturing was to get $443,555, payable as a "consulting
fee" to John Z. DeLorean. In December 1981 the twenty-man
DMC board reportedly voted over $760,000 in bonuses, including
$100,000 for DeLorean. He says he never received this bonus.
for what he had taken out of the company, DeLorean's current
salary is $180,000. ("I'm taking nothing out right
now," he said in August.) He says that he worked without a
salary for three years, then set it at $287,000. The
"consulting fee" paid to his personal company was for
other's salaries as well as his own. "I would think,"
he said, "that I've averaged about $100,000 a year."
flamboyant nature of DeLorean's personal lifestyle has also come
in for a great deal of criticism, some possibly justified, some
tinged with the stain of sour grapes. Commenting on his
oft-repeated statement that what happens to the company will not
affect his financial status one iota. Dewey said, "That
destroyed his credibility."
point of that was," responds DeLorean, "that I've had
to make lots of financial sacrifices to keep this thing going -
by selling things. I haven't come close to making my normal
income during this period." Gone is his interest in the San
Diego Chargers football team, a 32,000 acre ranch in Idaho, a
California avocado ranch, a couple of car dealerships, other real
estate and various securities. His Pauma Valley, California home
is for sale at $4 million. "I personally have written now,
out of my wife's and my bank account - by borrowing on everything
we own in the world - something like $5.7 million worth of checks
to keep the company alive between January and now (August
1982)," DeLorean says.
DeLorean Motor Company headquarters in expansive, marble floored
offices that formerly housed the Xerox boardroom on the 43rd
floor of 280 Park Avenue was seen by many as cash-draining
overkill. "When you start on the top floor," said one
executive, "you have no way to go but down." Yet it was
apparently DeLorean's belief that such sumptuous quarters were
necessary to raise money from the financial community. "You
can't sell Guccis on Broadway," he once said. But, say
insiders, the money for the company was in fact raised in
Bloomfield Hills, Michigan officed and not from Manhattan.
Reflecting on all the difficulties of the past few years, one of DeLorean's previous executives said this about his former boss: "John's not a dumb man. But looking back, he's made all the mistakes Bricklin did."
FACING THE FUTURE
other matters aside, the one key element in the eventual success
or failure of the DeLorean Motor Company is its ability to stay
afloat. Regardless of the relative merits of the DeLorean car, if
there is insufficient capital to keep the company operating, it
will fail. Though that may seem a simplistic summary, it was
precisely the issue of a meeting between DeLorean president Don
Lander and finance director T.J. Daley with the British
government that took place in August 1982.
British consortium that month had failed to raise enough money to
take over the factory, clearing the way for U.S. investors
backing the DeLorean to do so. "With a little bit of
luck," DeLorean said, "that agreement should be signed
by September 15th. "The investors, all in the auto business
(including some dealers), are willing to gamble $35 million - $10
million cash and $25 million in export credit from a large
Western bank - in return for a substantial interest in the
company. DeLorean's personal share in the company will drop to
about "twenty-two or twenty-three percent".
proposed arrangement," DeLorean told AUTOMOBILE Quarterly,
is that we buy the factory and all the tooling. We owed the
British government about $230 million on it - so they
really own it - but now they'll sell it to us on a mortgage at
approximately 13.5 interest for 20.7 million (at an exchange rate
of $1.69 to the pound, or $35 million). There would be an
absolute holiday on principal and interest for three years."
DMC makes it through these most trying times - and DeLorean gives
it a ninety percent chance - it should become a stronger company.
"For one thing," he observed, "we've gotten rid of
the most onerous obligation of having the government as a
partner.... Their interest is primarily for social and political
purposes, while ours are completely different."
of August 1982, all operations were to be consolidated. If
DeLorean ever had dreams of being as large as General Motors, he
has had them toned down considerably. He now says that
Irvine-based Dick Brown "expanded far beyond what was
rational," that they are now "cutting back to what
makes sense" and that he would be pleased to see the same
size as BMW's U.S. operation when it was under the aegis of the
late Max Hoffman.
three QAC operations will be moved to Belfast. Meanwhile, the
Michigan facilities are slowly being integrated into the
Bridgewater, New Jersey location. The lavish Park Avenue, New
York headquarters are being scaled down and will eventually also
be moved to Bridgewater. The Irvine facility will become the
Western zone operation instead of marketing headquarters.
the financial deal is signed, the time of the plant's reopening
will depend on how quickly DMC and its 330 dealers dispose of
their inventory. As of mid-August, DMC had about 800 cars and its
dealers about 1400. There were another 1000 cars at the docks in
Belfast; these will be "re-manufactured" as 1983 models
before they are shipped. DeLorean looks for August sales of 400,
then a climb to 600-650 a month, based on a new five year/50,000
mile warranty and a new dealer floor-panning arrangement.
"At that rate, we'll be out of cars in about two and a half
months," DeLorean predicted, "and so if we start
production by mid-October, we'll be just about on track."
own figures show that only 4243 cars were sold from September
1st. 1981 through July 31st. 1982. Average monthly sales fell
drastically during 1982 (273 versus 583 in 1981). One bright
spot: April 1982 was the low water mark (158) with sales rising
through July (361). Though far short of the predicted sales of
20-30,000 annually, break-even for all operations is now only
4250 units instead of 10-12,000. Greatly contributing to this
lower break-even point was the British government's write-off of
their own obligations, DeLorean explained, plus the loss of
"some very expensive people."
of these "very expensive people", former DMC
executives, disagree about the company's chances for survival.
Says one flatly: "Too many liabilities. The car is
overpriced and what was sharp in the Seventies is not for the
Eighties." Says another: "In its latest transformation,
the car has lost its universal appeal.... It's also a little big
for 1982-83... (and) should be priced more competitively with the
Porsche 944 ($18,450) and the Porsche 924 Turbo ($21,500)."
A third felt that the DMC plant "might be good for some
Japanese car concern, though it's probably not worth more than
fifty cents on the dollar." And finally: "Despite the
fact that the car doesn't live up to its original specs or
objectives, at $25,000 you could sell about 6000 a year. If you
add worldwide distribution, another 6000. But it would have to be
made competitive in safety and performance.... Plus, and R&D
program is needed to keep pace because the car is approaching
antiquity in some features...."
one of the car's problems would seem to have been its high price.
Taken as a whole, sales of high-priced luxury specialty cars have
been sliding steadily since 1979. Sports/GT cars have suffered a
similar fate, and that includes Corvette and Porsche. Though
DeLorean obviously had his eye on Corvette sales (41,818 in 1977,
falling to 29,039 in 1981), perhaps he should have expected sales
to more closely parallel Porsche's 924 (8345 in 1979 and, in
combination with the 924 Turbo, 5188 in 1981).
of the DeLorean, however, have plummeted within recent months.
From the halcyon days when dealers could demand $28-35,000 a
copy, many today are going begging for $18-19,000, with some
isolated instances of $15,000 and lower, well below the $25,000
suggested retail price and even under dealer cost. Some of the
sting of this discounting may be lifted by a 1983 reduction in
manufacturing costs of $2870 per car, a result of the various
writeoffs of government obligations. And, if the British pound
stays near the $1.72 level, it could ultimately result in a price
reduction - or at least no increase. When the financial deal with
the British was first struck, the pound was about this exchange
rate. At announcement time it rose to $2.40, adding, according to
DeLorean, about $5000 to the cost of the car.
affirms that his car is already competitive with the Corvette and
Porsche and hints "at other things that will surprise the
world." There is one turbocharged version of the car already
for sale and a twin intercooler version that, with its purported
4.8 second time for zero to sixty miles per hour, could surpass a
BMW M-1, Lamborghini Countach or a Porsche 930 Turbo, DMC is also
working with stock car champion engine builder Smokey Yunick in
Florida on "a brand new engine concept (for which)
independent tests show about a fifty percent improvement in fuel
economy over any other gasoline engine built in the world."
Negotiations are proceeding with a major manufacturer as partner.
over the stainless steel outer skin is another ploy to widen the
car's market, though some who have seen a painted car next to one
with the standard finish feel that it is not an entirely
successful solution. Considering the problem of paint adherence,
it's probably a short term solution, according to DeLorean,
because the car was designed with a different purpose in mind.
felt that the next step in cars - and we still think so - will be
soft urethane body panels. Our car is designed so you just take
off or leave off the stainless and put the soft urethane on.... A
number of chemical companies are all working hard at that, ...
but nobody's quite got the surface finish right yet. Of course,
when they do," DeLorean adds, "we're planning our 'Big
Rubber Ducky' as our basic car in any color you want." While
development of the four door sedan has slowed, DMC's chairman
says that it, along with a "revolutionary four wheel drive,
... a sports/luxury car, not a military type vehicle" are
DeLorean make it as an entrepreneur? Will his company survive and
flourish as another BMW (which he calls "the miraculous
success story of the age")? "I've never failed at
anything and I'm not about to try now," he told Fortune
(May 3rd, 1982). "I think without any question we'll be back
in business." Two months later he told The Wallstreet
Journal: "We are going to bootstrap ourselves back into
operation. All we need is intestinal fortitude." Finally, a
recent comment: "I think the stage is now set for us to move
ahead. Unfortunately, we're in an extremely difficult time from a
business standpoint. High interest rates and the fact that the
auto industry is so grievously depressed has not made our problem
any easier. But, if you're going to have trouble, you might as
well have it when the world is in trouble."
one sure thing about the daring, dashing fifty-seven-year-old
John Zachary DeLorean; he has savoir-faire. He can stare
possible failure right in the eye and not even flinch. And what
distinguishes John DeLorean from his predecessors - the
"failures" - is that he has, more or less, built the
sports car he planned to build. Certainly the DeLorean is not the
dream car that was put together in "the man's"
imagination. Although some might no longer call it
"ethical," DeLorean has managed to produce a
technologically advanced, reasonably efficient and very sexy
automobile in a surprisingly short time. Though many have
compared the DeLorean to the Bricklin, their similarity begins
and ends with their gullwing doors. Simply in terms of sales,
DeLorean has already turned out nearly twice the number of
Bricklins made before the company's demise.
The mistakes - perhaps errors in judgement - that DeLorean has made are similar to those that others have made along the way. Clearly both Bricklin and DeLorean misjudged the public's appetite for their cars at a given price level. John DeLorean has already proven his intelligence, his imagination and his capabilities at the largest automobile producer in the world. There is little doubt, now that he is calling the shots himself, that somehow, somewhere he will prevail. And if, by chance, his car does fail, he'll be back with another one. Bet on it.
DMC - DREAMING THE IMPOSSIBLE DREAM --- THE DELOREAN AND ITS PREDECESSORS
By Walt Woron, Automobile Quarterly, Vol. 21, No. 2, 1982.
When we closed the book on John DeLorean in September, 1982, we knew that the future of the car and its creator was far from settled. Yet when the press told of DeLorean's arrest the following month, it was clear that while the story of the car was probably over, a new chapter in the saga of John DeLorean was just beginning.