by William M Wright BBA, MBA
John DeLorean was among just a handful of U.S. entrepreneurs who dared start a car company in the last 75 years.
Sure, in todays world of jumbo government grants, rebates and tax subsidies for Electric and Hybrid cars entrepreneurs' have found it much easier to obtain money to start new car companies. And unlike the 70's bad economies America's 21st century 20 and 30 something tech billioniares have banks full of money their willing to risk.
It was a much different time in the late 70's. Not even Jimmy Carter was promoting government subsidies for new start-up car companies. Just helping Chrysler, get through a recession back then was a major political risk. So, Delorean had to look outside the USA for government support.
He turned his dream into reality in 1981. By 1982 his dream became a nightmare and in1983 it was dead. He may have become a flash in the Automotive pan of history -but in the 70's DeLorean was a flashy auto industry legend.
"John was no saint. I've dedicated this multi-media story to the bold American Engineering spirit of John Z DeLorean." -Bill Wright
DeLorean was more than a flash in the automotive pan. John enjoyed more than “fifteen minutes of fame”. In fact, in the late 70’s and early 80’s John DeLorean (along with Lee Iacocca) was the Detroit Automotive story the world watched.
Many feel he was an automotive visionary others feel he was a dreamer and schemer. My view is he was all of the above.
"John DeLorean was one of Detroit's larger-than-life figures who secured a noteworthy place in our industry's history," GM Chairman and CEO Rick Wagoner said in a statement after DeLorean’s death in 2005. "He made a name for himself through his talent, creativity, innovation and daring."
In death and hindsight it pays to be kind and humble. I’m sure Rick Wagoner was being both in his GM tribute to John DeLorean.
Like the famous baseball player and coach Pete Rose, Delorean's fall from grace was fast and hard. And his public image remains stained. Yet, even his critics would not deny John Z DeLorean deserves a place in American automotive history.
DeLorean broke the auto executive mold by going Hollywood. People either loved him or hated him.
DeLorean broke the mold of a conservative Midwestern auto executives by "going Hollywood". He was an anomaly in an industry then dominated by buttoned-down executives. He dyed his hair jet black, wore shirts open to the navel, married a teenage starlet and subsequently a supermodel, and became a wonder at self-promotion.
He wore long sideburns that violated the company's unwritten dress code, and even had the president of Ford act as best man at his second wedding. He also owned, for a time, an interest in the San Diego Chargers and played the jazz saxophone.
"People either loved him or hated him," said business journalist J. Patrick Wright, who penned the 1979 DeLorean memoir, On A Clear Day You Can See General Motors. "He once told me that he placed enjoying life very high in his list of priorities, and he felt that contrasted with many other executives," said J. Patrick Wright, who collaborated with Mr. DeLorean on a book called "On a Clear Day You Can See General Motors."
He became vain and impulsive. But he began as a true automotive maverick -in touch with the younger baby boomers.
DeLorean was vain, impulsive and sometimes overbearing. He wore trendy clothes and earned a reputation as a swinger after his second divorce, when he started dating celebrity beauties like Ursula Andress and Raquel Welch. In 1972 he met supermodel Christina Ferrare, who was half his age, and she moved in with him. Detroit did not approve of DeLorean's lifestyle, so in 1973 he "fired GM" and set off on his own. The DeLorean myth grew. He was a maverick, a risk taker, and he had bold dreams.
His flair extended to business. He led the team that created Detroit's first muscle car, the Pontiac GTO, beginning a wave of such vehicles.
Many in the industry thought he would one day be G.M.'s president, but he left G.M. in 1973, citing opposition to his unorthodox business style; others said he was dismissed. He told a reporter at the time, "There's no forward response at General Motors to what the public wants today."
DeLorean Motors Company - DMC
John DeLorean's self-named DeLorean sports car, with a stainless-steel body and gull-wing doors, was the talk of the auto world in the early 1980s. Talk show host Johnny Carson was a major investor.
DeLorean himself was already an auto industry legend for having designed the hotrod Pontiac GTO in the 1960s, and for his fast rise through the ranks at General Motors, where he gained a reputation as a rebellious visionary.
He quit GM in 1973 and later formed the DeLorean Motor Company (DMC).
Over eight years passed after leaving GM before the DMC plant opened in Ireland in 1981
He opened a factory in Dunmurry, Northern Ireland, in early 1981, which was to produce his $25,000 sports car, at a time when the average vehicle cost about $10,000. The British government sank $120 million into the $200 million project to create jobs in an economic depressed Ireland. N. Ireland was plagued with religious civil strife and public bombings and it was hoped jobs would be a foundation for peace.
The snazzy DeLorean car debuted in 1981; but by 1983 financial difficulties had doomed the company and it closed down after building fewer than 10,000 cars. It is believed that a total of 8,563 DMC-12s were built. Approximately 6,000 of them still exist today.
DeLorean was arrested in 1982 and charged selling cocaine to raise money for his failing DMC. DeLorean used an entrapment defense to win acquittal on the drug charges in 1984, despite a videotape in which he called a suitcase full of cocaine "good as gold."
In 1982 he was charged with drug dealing by 1983 financial problems doomed DMC
After the DeLorean car venture failed, he was involved in some 40 legal cases, including his 1985 divorce from model and talk show personality Cristina Ferrare, his third wife, after a 12-year marriage.
DeLorean was later cleared of defrauding investors, but continuing legal entanglements kept him on the sidelines of the automotive world, although his passion for cars did not abate. After declaring bankruptcy in 1999, he said he wanted to produce a speedy plastic sports car selling for only $20.
"I believe I deserve what happened to me," DeLorean told The Associated Press after the divorce, which followed his drug trial. "The deadliest sin is pride," he said, proclaiming his faith as a born-again Christian. "I was an arrogant egomaniac. I needed this, as difficult as it was, to get my perspective back."
"I deserve what happened to me. I was an arrogant egomaniac."
Ironically, the now-defunct DeLorean car got a huge popularity boost when it was driven by actor Michael J. Fox in the 1985 film Back to the Future.
of John DeLorean
This article in 2000 by Jason Manning provided details of the drug sting, financial issues and divorce that DeLorean faced:
The sting operation mounted by the FBI -- in conjunction with the DEA, Customs Service, and the police departments of Ventura and Los Angeles, California -- sounded like a plot straight out of Miami Vice. But this was the real deal, and it snared the legendary John Zachary DeLorean, a man People Weekly described as the Auto Prince, the "Detroit dream merchant."
On October 26, 1982, DeLorean was arrested for putting up $1.8 million to bring 100 kilos of cocaine into the United States. DeLorean stood to make $24 million from the deal, and he told a confidential informant (CI) for the FBI that he intended using the proceeds to salvage his dream, the DeLorean Motor Company, which faced ruin.
"People either loved him or hated him," said business journalist J. Patrick Wright, who penned the 1979 DeLorean memoir, On A Clear Day You Can See General Motors. DeLorean was vain, impulsive and sometimes overbearing. He wore trendy clothes and earned a reputation as a swinger after his second divorce, when he started dating celebrity beauties like Ursula Andress and Raquel Welch.
In 1972 John met supermodel Christina Ferrare, who was half his age, and she moved in with him. Detroit did not approve of DeLorean's lifestyle, so in 1973 he "fired GM" and set off on his own. The DeLorean myth grew. He was a maverick, a risk taker, and he had bold dreams.
Marrying Christina, DeLorean dabbled in real estate, car dealerships and miniature race cars. But what he really wanted to do was start his own car company and break the hold that Ford, Chrysler and GM had on the American auto industry. The sporty DMC-12, he thought, would do the trick. The sleek stainless-steel sports car with the distinctive gull-wing doors boasted a 130hp Renault engine and could go from zero to 60mph in eight seconds.
DeLorean needed $175 million to finance his dream. Over one hundred investors, including Johnny Carson and Sammy Davis, Jr., put over $12 million into a partnership for research and development while the British government produced $156 million in grants and loans in return for DeLorean locating the DMC factory in Northern Ireland. (Britain liked the idea of creating 2,000 new jobs in a region suffering a 20 percent unemployment rate.)
DeLorean risked relatively little of his own money -- $700,000 is the best estimate -- but he seemed to have made his dream come true. The Auto Prince lived like royalty in a $7.2 million, 20-room Fifth Avenue duplex, a $3.5 million estate in New Jersey and a $4 million California ranch. He made sure DMC's $25,000-a-month New York offices were located in a skyscraper that towered as high as the nearby GM building. He paid himself nearly half a million dollars a year and his estimated value in 1982 was $28 million. John Z. DeLorean was a real American success story, the poor boy who made good. Or so it appeared.
Unfortunately, the DMC-12 racked up mediocre sales figures. Entering the market in 1981, it faced stiff competition from Datsun, Mazda and Porsche sports cars. At $26,000, it cost $8,000 more than the Chevrolet Corvette. And of course a recession during 1981-82 didn't help, either. DeLorean expected to sell 12,000 cars a year; in the first six months only 3,000 DMC-12s were purchased.
A pair of 24-karat solid gold cars bearing $85,000 price tags were made for an American Express Christmas catalog; one resides in a glass showcase in the lobby of a Snyder, Texas bank and the other is in a Reno,Nevada car museum.
By February 1982 the DMC factory was in receivership, and in October of that year the British government ordered it shut down. DeLorean needed $17 million in a hurry to save his business. In desperation he entered into a drug-smuggling scheme, and in so doing walked right into a FBI sting operation designed to nab a smuggler named William Hetrick.
Hetrick was suspected of flying cocaine in from Colombia and moving it through the offices of a company called Morgan Aviation at Mojave Airport, ninety miles out of Los Angeles. He was looking for a bank that would launder his ill-gotten gains. The FBI confidential informant hooked Hetrick up with one agent posing as a bank officer and another who posed as a drug distributor. DeLorean then approached the CI, and was filmed and recorded at meetings in Washington D.C.'s L'Enfant Plaza Hotel as well as L.A.'s Bel Air Sands and the Sheraton Plaza. Hetrick was arrested after exchanging the cocaine for money; DeLorean was was taken into custody the following day when he flew into L.A. from New York.
Ironically, he just missed a call from a banker who wanted to offer a legitimate $200 million loan that would have saved DMC, which shut its doors for good owing creditors $180 million. DeLorean's dream had turned to dust -- and left a lot of investors burned.
Interviewed by Rolling Stone's Aaron Latham in 1983, DeLorean claimed that he was trying to get a loan using stock in a shell company as collateral, and that he tried to back out of the deal after discovering that drugs were involved. At that point, according to DeLorean, the lives of his kids were threatened. Furthermore, the money paid for the drugs brought in by Hetrick was provided by the government. DeLorean suggested that the government was out to destroy him because the Big Three automakers wanted to see his enterprise fail; at other times he surmised that either the British government or the Irish Republican Army had set him up.
In 1984, DeLorean was acquitted of all charges after a federal judge ruled that the FBI operation had been a clear case of entrapment. He became a born-again Christian and wrote his autobiography. But in April, 1985 Christina divorced him, and that September a federal grand jury indicted him for income tax evasion and mail and wire fraud on evidence that he had bilked DMC investors, siphoning the funds into his private bank account. Though never convicted, DeLorean was ordered to reimburse creditors to the tune of $9 million. In 1995 a jury ordered him to pay the law firm of Morganroth and Morganroth $10.3 million in unpaid legal fees. In 1998 a New York jury ruled that DeLorean's accounting firm owed DMC investors $46 million, plus $65 million in interest