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.
DMC Factory - Northern Ireland
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 …….
DeLorean Motor Company DMC-12
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.
Celebrating the DeLorean
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
Deloreans awaiting sale
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.
John Z DeLorean
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
DeLorean Factory
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
John DeLorean with Cristina Ferrare
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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DeLorean Motor Company - John DeLorean History Timeline
What Happened to John DeLorean
What Happened to the DeLorean Motor Company,
The DeLorean Timeline
Delorean - DMC 12 - John Z DeLorean
The History of DeLorean Motor Company - John DeLorean’s Timeline
* 1956 John Z. DeLorean’s 12½-year career at Pontiac director of advanced engineering
Age 40 DeLorean became a GM vice president, the ‘youngest general manager’ in the corporation’s history
John Z DeLorean
1972 Group Vice President, salary/bonuses totaling $650,000, $250,000 expenses
1973 DeLorean resigned. Frustrated with GM’s monotonous products / insular culture
1975 DeLorean Motor Company was incorporated
Living the Dream John DeLorean
1976 October DeLorean and Collins had arunning prototype, built by Triad
1977 Early - DeLorean allowed the press to see and sit in the prototype
1977 Floated in mid ‘77, was 2,000,000 shares at $5 each
1978 Spring DeLorean approached the Northern Ireland Development Agency (NIDA), proposing establishing a DMC factory in Ulster creating at least 2,000 jobs in the region. Deal reached in just 46 days
DeLorean with Management Team and the DMC Chassis
1978 Late July the British government agreed to give DMC
£16.5 million (about $31.7 million) in Loans and
£22 million (about $42.2 million) in Grants, plus an additional
£17.8 million (about $34.2 million) Equity Investment in a new holding company
72-acre (29-hectare) marshland in the village of Dun Murry in west Belfast. The package brought DMC’s total capitalization to a claimed $156 million
DeLorean Factory
1978 the deal with Colin Chapman for re-engineering the DMC-12 had called for Lotus to be paid through a Geneva-based holding company called GPD Services, allegedly run by two of Chapman’s longtime friends.
1981 January 21st First true production cars rolling off the line
John Z DeLorean at the Factory
1981 - Early, DeLorean toldAutocar that the Dunmurry factory’s maximum capacity was 30,000 units a year, BMW-rivaling volume in those days.
ohn DeLorean - The DMC-12 - Christine Ferrara
1981 DMC entered ‘81 with an $18.6 million shortfall.
1981 Inflation and exchange rate fluctuations had pushed the DMC-12’s U.S. retail price to $25,500
1981 Company said it would sell 30,000 cars a year
Brand New DeLorean
DMC was losing money at an alarming rate & obliged to pay the British government £185 (nearly $400) for each car sold, cutting into the company’s per-car margins.
DeLorean, meanwhile, was living as lavishly as ever with an annual salary of $500,000 and a generous expense account.
British approached for even more money: another £35 million (about $70 million). Since the Conservative Thatcher government was understandably nervous about the £77 million-odd (approximately $154 million). But in a misunderstanding Mrs Thatcher was not passed on the correct information regarding the money, and immediately said there would be no more British Funding.
1981 February 19, the British forced DMC Ltd. into receivership, appointing Sir Kenneth and Mr Shadwell as the official receivers.
John Z DeLorean
1981 DeLorean no longer in control of DMC Ltd.’s operations. Unless he could come up with another $20 million to pay off its outstanding debts, the company was doomed. DeLorean offered $10 million than a that Virginia-based Financial Services Inc. was prepared to loan him. Sir Kenneth judged that acceptable and set a deadline of October 20 for the transaction.
1981 The Dunmurry factory manufactured around 7,500 cars but DMC sold only about 3,000 of those, while the rest piled up in Belfast.
The Dream is over - DeLoreans Stockpiled
1982 Evening of October 19, 1982, John Z DeLorean was arrested in a Los Angeles hotel room for conspiracy to distribute more than $24 million of cocaine.
The receivers immediately shut down DMC Ltd., sending its 35 remaining employees home. DMC of America filed for Chapter 11 bankruptcy protection six days later.
1983 Some of the remaining cars were re-serial and sold as 1983 models, but the DeLorean Motor Company was finished. John DeLorean’s troubles, however, were only beginning.
DeLorean Dealer offer
After 10 days in Los Angeles County Jail, DeLorean was released on a $2.5 million bond.
1984 DeLorean was tried in a Los Angeles federal court in the summer ‘84. He never took the stand during the 62-day trial. August 16, the jury acquitted DeLorean of all charges
DeLorean had transferred $17.65 million to GPD (Grand Prix Drivers) setup by Colin Chapman, $5.1 million from DMC Ltd. the rest from one of his U.S. research partnerships. When the receivers investigated, however, they reported that none of those funds had gone to Lotus and that Lotus had billed DMC Ltd. directly for its engineering services, which totaled about $23 million. The receivers claimed that the GPD money had simply disappeared.
1997 Houston, Texas mechanic Stephen Wynne bought the remaining parts inventory along with the original engineering diagrams and the rights to the DMC name and logo
Stephen Wynne - DMC
It’s worth noting that despite all the accusations and allegations, John Z DeLorean was never convicted of any of the crimes of which he was charged.
The DMC-12 was Designed in 1975
DeLorean 0-60 performance in a bit under 8 seconds, DeLorean Top Speed of 129 mph 25.2 mpg combined
Gold 24 Karat Gold Plated DeLorean
Steel backbone frame, manufactured in England by GKN Sankey Bilston
The engine in the production DMC-12 was a hybrid, combining : Heads and Bosch K-Jetronic fuel injection from the rear-drive Volvo 260 Series - Bottom end of the front-drive Renault 30
DeLorean 2.8 V6 PRV Engine
The commonality with the Volvo engine enabled DMC to “piggyback” on Volvo’s EPA certification, avoiding the expensive and time-consuming 50,000 mile (81,000 km) durability test
The DMC-12’s engine had the same output as its Franco-Swedish cousins: 130 hp (97 kW) and 162 lb-ft (220 N-m) of torque. That was about what Bill Collins had anticipated, but Lotus’s structural redesign had left the production car some 500 lb (227 kg) heavier than originally planned
DeLorean Motor Company now defunct, the DMC-12’s finest hour arrived in : July 1985 with the premiere of the popular science fiction film Back to the Future which did much to restore DeLorean’s tarnished image.
Back to the Future - Marty McFly with DeLorean Time Machine
The DeLorean was nearly going to be a Mustang but Bob Gale flatly refused the $40,000 per day and reshooting fees from Ford
The DeLorean we know and love was almost called the ‘Z Tavio’. ‘Z’ stands for Zachary, which was John DeLorean’s middle name & the first name of his son. ‘Tavio’ was DeLorean’s father’s name, and also his son’s middle name.
Standing at 6 ft 4 in tall, John DeLorean wanted a vehicle he could get in and out of, and sit inside comfortably. He got his wish when special cavities were built into the tops of the gull-wing doors, which is why the 1.85 meter tall Christopher Lloyd doesn’t bang his head when he closes one of the time machine’s doors.
Before Back to the Future the most famous DeLorean’s were the 24 karat gold-plated ones American Express ordered.
24 Gold Plated DeLorean DMC-12
AmEx presumed that their gold card customers would buy them, so ordered a hundred from DMC. In reality, only two people were crazy enough to spend $85,000 on a gold-plated car nowadays, the gold-plated DeLorean’s are worth even more than the ones used in Back to the Future movies.
Wait! Did we say ‘crazy’? Now it Turns out the two guys who bought them weren’t so crazy after all!
Sources vary as to exactly How Many DeLorean DMC-12s were built ? 9020 was the total
Perhaps that is the ultimate tragedy of DeLorean
The car
The company
The man
John DeLorean
Perhaps that is the ultimate tragedy of DeLorean
The car
The company
The man
Is it’s not how far they fell, but how much Higher they could have climbed
_____________________________________
#JZD #Johndelorean #johnzdelorean #deloreanmotorcompany #carmanufacturing #livingthedream #innovation #cardesign #carmanufactuing #thestory #storyofdeloreanmotorcompany #thecar #theman #thecompany
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Top Gear - The DMC-12 40th Birthday - On Road and Track DeLorean Review
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The story of John Z DeLorean and his vision of building his own Supercar has certainly been a roller coaster ride and one that still to this day could not be replicated.
The DMC-12 DeLorean’s 40th Birthday
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