DMC DeLorean Motor Company
HOW DELOREAN GOT STARTED
From 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.
It 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 European market.
In 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.
As 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 V-6.
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
As 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 of that."
Statements 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.
"I 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.
Not 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.
Some 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...."
DeLorean's 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 activities?"
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.
Accepted 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."
Others 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."
DeLorean's 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."
Evidence 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 left.
The 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
A 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 with that."
Collins 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."
Asked 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."
Other 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.
From 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.
Early 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?"
Among 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 month."
Like 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.
Two 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.
Adding 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
Perhaps 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, 9.7.
While 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 Science.
Collins 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)."
Toward 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."
"John 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
Two 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 that."
The 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.
When 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.
As 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.
A 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
As 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."
The 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."
"The 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.
Locating 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
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
All 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.
A 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
"The 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."
Assuming 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
As 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
The 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.
If 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
DMC's 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."
Some 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
Certainly, 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).
Prices 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.
DeLorean 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.
Paint 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.
"We 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 coming along.
Will 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."
There's 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.