Mark Elliott 20/05/2024 Mark Elliott 20/05/2024

DeLorean Motor Company - Why did it Fail ?

Why did DeLorean Fail ? The answer is more complicated than some may think, and looking at the factors involved the DeLorean Motor Company it certainly had more than it’s fair share of problems… Here’s the Answer …..

Why did DeLorean Fail ? ……

The answer is more complicated than some may think, and looking at the factors involved the DeLorean Motor Company it certainly had more than it’s fair share of problems.

One thing to bear in mind before we get started here, is that John Z Delorean accomplished something still to this day could never be replicated again (and this was in 1978). In that he constructed an brand new assembly 66,321sqm Plant, hired a management team / supporting staff, trained a workforce of 2300 to build a unique Stainless Steel Sports Car within 28 months.

At the time (1978) Porsche said it would take 7 years to design and build a brand new car, Ford said it would take them 5 years (Even with all the Design, Manufacturing, Supply, Staff and Production already in place…….

1974 DMC Incorporated - 1975 - Design placed with Giorgetto Giugiaro - 1977 First Prototype - 158 Investing Dealers - 1978 Funding Secured (after just 45 days) - 02.10.1978 Factory Groundbreaking started with the first DeLorean rolling off the line 21.01.1981 with the shipment of cars leaving from the factory on 20.02.1981.

DMC’s funding was exhausted as the 1st car rolled off the line, Sales were paramount. So no time was left to fully test the car / rectify and correct any factory production techniques before it was shipping. Of course this lead to many high profile and famous people receiving the first cars with production faults, bad press quickly sprea, the cars were returned to Dealers and and so the story begins …….

Why did DeLorean Motor Company fail ? here are some of answers are here …...

Taking you Back to January 1982

DMC was promised government funding after the 1st car rolled off the Production line (£21 Million) which never happen, as Margret Thatcher had come into power, she had been incorrectly advised of the funding required for DMC, so without further investigation or talks said no more British funding.

U.S dragged into recession, the worst since the 1970 fuel crisis, hitting car sales hard

Snowing in U.K but worse in North East of the United States (DeLorean’s only export market) experiencing its worse storm in modern history = no one buying cars
DMC used GM, Ford, Chrysler and European dealerships to sell their cars. But with dealerships needing to preserve their own cash flow, they concentrated on higher volume cars. So single figure sales for DeLorean were not a priority, so got pushed to one side.
Secret shopper tapes revealed dealerships knew very little about lead times, stock for sale, or details of the car, leading to poor sale technique/ no sales.
A strike on January 11th by Shipping workers between British and Northern Ireland caused supply problems, so workforce put on short time
Factory suffered (accidental) damage caused in the hunger riots which totally destroyed Design blueprints, and all factory worker records
£14 million compensation claim submitted by DCML (for insurance damaged caused to the factory by hunger strike riots) was never paid to DMC from the Department of Commerce.

Tough months ahead on cash flow for DMCL

DMCL had a credit line of $30 Million with the Bank of Americas. This covered the cars during transit – Export carparks were nearly full, so they neared credit limit

Suppliers asked to provide extra credit, as funding was so low

This coincided with the last 2 shipments of 1075 cars ($22 million dollars worth) being released without being covered by the Bank of America, meaning that inward cash flow had dried up.

DMC was also obliged to pay the British government £185 (nearly $400) for each car sold, cutting into the company’s per-car margins.

DMC American could not pay the $22 million to DCML for the stock exported as sales had dried up throughout network.

Week 3 - January with Bank of America Credit line exhausted, on the 28th they withdrawn export cover

1100 of the 2600 (mainly 2nd shift) made redundant, with C.P Trim reduced to 1 day a week

8,580 Cars made up to receivership on 19.02.1982

9,080 Cars made in total up to February 1983

One question remains did DeLorean really fail ?

Well 40 years on and the ‘Dream’ is still alive, maybe the Back to the Future film did move the spotlight from the amazing accomplishments of the 2500 Dunmurry Northern Ireland Factory workers.

But it firmly fixed the DeLorean as one of the most Iconic movie cars of all time.

John DeLorean’s original concept was to build a car :

That was instantly recognisable and the test of time this is still true today whether your young or old - Yes

A Dream Sports Car that lasted as long as the owner wanted to keep it - Yes
To ‘Live the Dream’ - Yes, (maybe not in the way John Z DeLorean imagined) but 40 years on the car is being kept alive by the owners, along with the backup of full dealer services by DeLorean Motor Company operating today in Texas, Florida, Midwest, California, U.K - Yes
Build a car that will never rust - Yes
A unique Iconic car - Yes

Perhaps that’s the ultimate tragedy of DeLorean

The car - The Company - The Man

Is that it’s not how far they fell, but how much higher they could have climbed ……

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21 DeLorean Facts - Click on picture to find out more !

21 DeLorean Facts

HOW FAST CAN A DELOREAN GO ? 129 MPH - 0.60 in 8.5 seconds (in european spec)

21 DELOREAN FACTS :

1. The DeLorean DMC-12 was the vision of automotive industry executive John DeLorean, who worked for Chrysler, Packard, Pontiac and Chevrolet before setting up his own company in 1975.

2. The car was built in Dunmurry, a suburb of south-west Belfast, with the first car rolling off the production line on January 21, 1981.

3. Approximately 9,000 were made before production halted in early 1983. Only 16 official right-hand-drive cars were ever produced.

4. The brand new 72-acre factory was claimed to have a capitalization value if $156 million. Would produce 30,000 cars per year a short fall from the 7,500 made whilst the plant was in operation.

5. The body panels weren’t painted, as they were made from the same brushed stainless steel used in the catering industry, SS304 austenitic stainless steel

6. However, 3 cars were plated in solid gold. The original plan was to build 100 as part of a Christmas 1980 promotion for American Express gold card members. Only two of the $85,000 cars were sold, but a third was also built with spare parts, in case one of the other two was damaged.

7. John DeLorean managed to design, engineer, build a brand new factory, staff it with 3000 staff, and produce a car in a record 28 months. To date this has never been replicated.

8. The official 0-60mph time for the DMC-12 in US Spec was 9.0 seconds, from the 130hp

9. The #DMC-12 was so named the because it was originally priced at $12,000. However, by the time it came to market, the car had a suggested retail price of $25,000 (optional extra was an automatic transmission for an extra $650).

10. A total of six DeLorean cars were used for the making of the Back to the Future movies, along with one built entirely out of fibreglass for scenes in which the car had to fly. Only three of the cars still exist, plus the one that was destroyed at the end of the trilogy’s final film.

DeLorean A Car - Full restored at the Petersen museum

DeLorean Train Scene - Back to the Future III - This was one of the real cars used in filming

11. The doors have space-age tech developed by the defence industry, Grumman Aerospace developed the doors' torsion bar (which helps with the lifting and lowering) and did most of the manufacturing under cryogenic conditions to ensure longevity. When not working on the DeLorean, Grumman made things like the Apollo Lunar Module and the F-14.

12. The government used DeLoreans to test airbags, DeLorean originally intended the DMC-12 to be an extremely safe vehicle -- in fact one of the top contenders for the car’s name was DSV, "DeLorean Safety Vehicle." The company even donated two of the early prototypes to the NHTSA for airbag crash tests.

13. Before starting his eponymous company, John Z. DeLorean was one of GM's brightest stars, He headed up Pontiac in the 1960s, where he was responsible for the birth of legendary cars like the GTO and Firebird, before running Chevrolet in the early 1970s and making a few enemies at GM along the way.

14. The car’s shape was penned by legendary designer Georgette Giugiaro, Even if you’ve never heard of Giugiaro, you know his other works: the BMW M1, Yugo, Lotus Esprit, and Lexus GS all came from his mind, to name just a few.

15. The chassis was engineered by Lotus founder Colin Chapman. Well, it was actually re-engineered by Chapman, because the first design used unproven techniques. The chassis shares much of its components with the Lotus Esprit, and made by GKN England

16. The engine? Straight out PR of a Volvo. DeLorean went through a couple of engine plans, including a rotary engine like you’d find in a Mazda RX-7, But ultimately, a version of a V6 developed by Peugeot, Renault, and Volvo found its way into the rear. The engine was a version of the 2.8-litre V6 that was developed jointly by Peugeot, Renault and Volvo. The Volvo varient was fitted (as this had already passed the strict U.S EPA emissions in the Volvo 260), and later the Volvo 760 (using the Bosh K-Jet tronic. Surprisingly, plutonium- and garbage-powered nuclear reactors were never taken into consideration.

17. John DeLorean had plans for a DMC 24 (Which would have been a 4 door saloon), a Twin Turbo DMC-12 with 0-60 around 5.5 Seconds.

DMC -24 1984 After the DeLorean DMC-24 project ran out of money, Giugiaro converted the full-size design proposal for the DMC-24 Sedan into a Concept 'Lamborghini Marco Polo', presented in Dec. 1982 at Bologna Motor Show.

18. The "A" hero DeLorean time machine used throughout the entire film series was painstakingly restored by Temporal FX and is now on permanent indoor display at the Petersen Automotive Museum in Los Angeles, California.

19. The DeLorean time machine which was outfitted for stunt work with train wheels for Back to the Future Part III is now on display at Universal Orlando next to Doc Brown's time traveling train from Back to the Future Part III.

20. The third remaining time machine was retrofitted with 1950's white-wall tires in Back to the Future Part III, and is now in private hands.

Now in a Private collection sold for $550,000

21. The time machine which was hit by the train at the end of Back to the Future Part III was the "B" main stunt car used throughout the trilogy. To create this effect, the special effects crew cut up the car and frame, rigging it with explosives. The wrecked body panels were reassembled after filming, and the DeLorean was suspended from the ceiling for a number of years at the Planet Hollywood Honolulu restaurant in Hawaii (closed in 2010).

Planet Hollywood Honolulu DELOREAN Screen used

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