We continue the story of John Z DeLorean and remember the car that carried his name on the fortieth anniversary of its launch.
The 1970’s was a truly miserable decade for the whole of Ireland. A sectarian conflict that had simmered in Northern Ireland since the island was partitioned in 1921 had exploded into violence and bloodshed in 1968. This unrest continued throughout the following decade, with bombings, assassinations and other terrorist atrocities perpetrated by paramilitary groups on both sides of the political and religious divide.
A consequence of the euphemistically-named troubles was that the already weak economies on both sides of the border struggled to generate growth and attract inward investment. Consequently, unemployment remained stubbornly high. The UK Government in particular saw economic deprivation as a root cause of unrest in Northern Ireland. In the absence of commercial investment, the public sector became bloated, exacerbating the province’s perennial structural deficit.
Onto this troubled stage stepped John DeLorean. The charismatic and smart former head of General Motors’ Pontiac and Chevrolet divisions had cut loose (1) in 1973 and founded the DeLorean Motor Company (DMC). He was always an uncomfortable fit in a deeply conservative and hierarchical organization like GM, where many disliked his flamboyance, outspoken informality and growing celebrity status.
Although an automotive engineer by profession, DeLorean was a gifted communicator and salesman, and now he needed to sell himself to government and other backers who would finance his dream of building a futuristic but affordable mid-engined sports car with advanced safety features, to be sold primarily in the United States.
A concept was designed, called the DeLorean Safety Vehicle (DSV), and early sketches were of a car uncannily similar to the Bricklin SV-1, which provoked howls of protest from the latter’s eponymous creator. Had the DSV been anything more than a series of sketches at that stage, legal action might have ensued. By the time that the DSV amounted to something more tangible, Bricklin was defunct.
As originally envisaged, the DSV would have a mid-mounted Wankel rotary engine supplied by the Citroën-NSU Comotor joint venture. It would also have a revolutionary fibreglass body using a system called Elastic Reservoir Moulding (ERM). ERM had been developed by Royal Dutch Shell in the 1960’s and was licenced to DMC. It had the advantage that it could be readily moulded in varying thicknesses, allowing easy incorporation of deformable crash structures.
The fibreglass shell would be covered by thin non-structural stainless panels. There were impressive (if implausible) safety claims made for this method of construction, including an assertion that the occupants could survive a 50mph (80km/h) collision unscathed.
All of this was just so much theory and a couple of plaster and wood mock-ups when DMC approached government agencies in the Republic of Ireland and Northern Ireland. Both the Industrial Development Authority (IDA) and Northern Ireland Development Agency (NIDA) were interested in the proposal, excited by the prospect of the 2,500 new manufacturing jobs it would create.
DMC claimed to have 30,000 firm orders from US auto dealers for the proposed car. An IDA official flew to the US and visited a number of those dealers, only to discover that the firm orders were merely expressions of interest with no contractual basis. This news prompted Desmond O’Malley, Ireland’s Minister for Industry and Commerce, to exercise his veto and the IDA dropped out.
DeLorean said he was ready to sign a deal with the government of Puerto Rico (2) when NIDA intervened with a better offer, winning the project for Northern Ireland. In reality, the vast bulk of the required investment, estimated at $120 million, was provided by the UK Government. DeLorean and his backers (3) provided only a small amount of seed capital.
Construction of a 660,000 ft2 (61,000 m2) new factory in Dunmurry, five miles south-west of Belfast, commenced in October 1978. Meanwhile, DeLorean moved into prestigious offices in midtown New York, intending to manage the venture from afar. The prototype as presented to NIDA was effectively unbuildable, so DMC contracted with Colin Chapman at Lotus to develop it into something fit for production. Bill Collins, the prototype’s original designer, was sidelined by both Chapman and DeLorean and effectively ousted from the company.
The Wankel engine had already been abandoned following Peugeot’s 1976 takeover of Citroën and closure of the Comotor joint venture. The Ford Cologne V6 was briefly considered, then the drivetrain from the Citroën CX 2000, albeit with a turbocharger to increase engine power, before DMC finally settled on the PRV (4) Douvrin 2.7 litre V6 engine. This would no longer be mid-mounted: the DMC12, as it was now called, would be rear-engined.
Lotus discarded the untested ERM construction in favour of a steel backbone chassis to which was attached a conventional fibreglass bodyshell clad in heavy stainless-steel panels. This construction maintained the unique unpainted ‘brushed steel’ appearance of the car but added considerably to its weight.
The factory had been completed on schedule in February 1980, but it would be another eleven months before the first car, now called simply the DeLorean, would roll off the new production line. Almost none of the newly recruited workers had any automotive manufacturing experience (or any work experience, in many cases) so early cars had numerous quality defects. DMC was forced to set up three US-based quality assurance centres to rectify faults before cars were delivered to customers. Quality at the Dunmurry plant gradually improved with the workers’ skills and proficiency.
A more fundamental problem was the car’s pricing in the key US market. In the pitch to NIDA, the car’s proposed price was $10,000 to $12,000, making it competitive with similar cars like the Chevrolet Corvette. Adverse exchange rate movements and the costs incurred during the protracted redevelopment process pushed the price up to $25,000 at launch.
Despite this, there had been a waiting list for the new car, driven in no small part by its creator’s celebrity and popularity. Monthly sales reached a peak of 720 in October 1981, but the US economy was sliding into recession, exacerbated by unusually severe winter weather, and sales started to fall just as production was being ramped up. By the end of the year there was a stockpile of 4,500 unsold cars. After sales in January 1982 amounted to fewer than a tenth of this total, the company was in a full-blown cash-flow crisis and the receivers were called in on 19th February 1982.
DeLorean’s dreams, and the hopes of his employees and investors, potentially lay in ruins. In Part Three we will examine the aftermath of the collapse and DeLorean’s life thereafter.
(1) Although DeLorean officially resigned from GM and was given a golden handshake that included a profitable Cadillac franchise in Florida, there were allegations that he had been briefing the press in his own interests and against GM management in the year prior to his departure. The franchise was, allegedly, in payment for his agreement not to return to the auto industry for at least a year.
(2) That claim was at least an exaggeration, and possibly an outright lie, as the Peurto Rican negotiations were allegedly stalled at the time.
(3) Two of DeLorean’s more famous backers were US talk show host Johnny Carson, and singer and actor Sammy Davis Jr., who allegedly invested (and lost) $650,000 between them.
(4) A Peugeot-Renault-Volvo joint-venture engine project.