De Lorean Motor Company

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De_Lorean_DMC-12.jpg
De Lorean DMC-12

The De Lorean Motor Company was a manufacturer of passenger cars formed by John De Lorean in 1975. The company is most well known for producing the De Lorean DMC-12 (more commonly known simply as "De Lorean"), a stainless steel sports car with gull-wing doors. The DMC is also known for having a short and turbulent history in the automotive world, ultimately falling into receivership and bankruptcy in 1982. Near the end of the company's demise, founder John De Lorean was made infamous for his alleged involvement in a drug trafficking ploy to raise the funds necessary to revive the company from its financial death-sentence. De Lorean was acquitted of these charges on the basis of entrapment by FBI officials.

Contents

History

For a detailed history of the car produced by the De Lorean Motor Company, see the De Lorean DMC-12 article.

Company startup

The DMC (De Lorean Motor Company) was founded on October 24, 1975 in Detroit, Michigan by flamboyant automobile industry executive John De Lorean, to make the sports car of his dreams. At that time, De Lorean was already a well known name due to the jet-setting notoriety garnered by its founder. De Lorean was also known as a first-rate engineer, and a maverick business innovator. Investment capital for the startup came primarily in the form of Bank of America business loans, formations of various partnerships, and private investment from select parties including The Tonight Show host, Johnny Carson. Principal was also gained later through a dealer investment program, in which the dealerships who wished to offer the car were made shareholders in the company.

Additionally, De Lorean sought lucrative incentives from various government economic organizations to aid in the construction costs of the manufacturing facilities. He looked at countries outside the US, particularly where unemployment was high, as a manufacturing base. One of these was the Republic of Ireland, although Des O'Malley, then the country's Minister for Industry and Commerce, decided against supporting the project. De Lorean was then looked to Puerto Rico, where he was about to agree to a deal for the car to be manufactured locally, when last minute offer from the UK's NIDA (Northern Ireland Development Agency) led the production company to set up shop in Northern Ireland. De Lorean was also under the impression that the British government would provide his company with Export Credit Financing, which provided the manufacturer a loan of 80% of the wholesale cost of the vehicles ($20,000) upon completion and delivery to the shipper.

Manufacturing facility

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DMCL production in progress
In October 1978, construction of the manufacturing plant began in Northern Ireland. Officially known as DMCL (De Lorean Motor Company, Ltd.), the facility was located in Dunmurry, just outside Belfast. Construction of the 6-building, 660,000 square foot (61,000 m²) complex was completed in an impressive 16 months, and was situated on the border between two communities with differing religious predominations; Twinbrook (Catholic), and X (Protestant). [1] (http://www.home.no/delorean/dmcltd.htm) The facility had separate entrances for each side, but this was more of a geographic convenience rather than for religious segregation.

Unit production was scheduled to begin in 1979, but the engineering delays and budget overruns caused the first cars to start rolling off the assembly lines in early 1981. Workers at the factory were generally inexperienced, many of whom had never had regular jobs prior to this. This may have contributed to the reported quality issues attributed to the early production vehicles, and the subsequent establishment of Quality Assurance Centers located at various delivery locations. "QACs" were set up in California, Delaware and Michigan where some of the quality issues were to be addressed and resolved before delivery to the dealerships. Some of the issues remedied in these locations related to the fit of body panels, retrofitting of higher output alternators, and gullwing door adjustments. The combined efforts of quality assurance improvements at the factory and the post-production QA done at the Assurance Centers were generally successful, although workmanship complaints would still occasionally arise. As the 1981 De Loreans were delivered without warranty, this could lead to dealership-customer disputes. By 1982, many of the assembly problems were worked through, and De Lorean was then offering a five year/50,000 mile warranty on their cars.

DMC-12

Reception by the car buying public and automotive magazines was mixed. Although the early vehicles had impressive waiting lists of anxious consumers, the MSRP sticker price of $25,000 was cost-prohibitive for the majority of the market - especially for what many considered to be an under-powered and impractical plaything. "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." The stainless steel body panels were an attractive design concept and impervious to corrosion, but in practice the sheen surface tended to show fingerprints. It also meant that the car could not be easily painted; every factory original De Lorean looked virtually identical. Some dealerships painted their cars on delivery to help make theirs more distinctive. De Lorean Motor Company was testing the use of translucent paint to help provide different color options on the cars while also allowing the stainless steel grain to show through, but no cars were sold with factory painted body panels. The only factory option initially available was an automatic transmission. A grey interior was offered later in 1981 as an alternative to the standard black interior. Several accessories including pinstriping and luggage racks helped provide further individuality. [2] (http://www.babbtechnology.com/thecar/misc.htm)

Downturn

It would seem that the eventual lack of demand, unforseen cost overruns, and unfavorable exchange rates began to take their cash-flow toll on DMC in late 1981. The company had estimated their break-even point to be between 10,000 and 12,000 units, but the limiting demand factors precipitated a falloff in sales to somewhere around 6000. In response to the income shortfall De Lorean was experiencing, a restructuring plan was devised where a new "DeLorean Motors Holding Company" would be formed, 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). In January 1982, due to SEC questions about the company's viability, the company was forced to cancel the stock issue for the holding company that DeLorean had hoped would raise about $27 million.

John De Lorean then lobbied the British government for aid, but was refused unless he was able to find a matching amount from other investors. What followed is a matter of debate between the British government, the FBI, the DEA, De Lorean, his investors, and the US court system. At some point in 1982, John De Lorean became the target of an FBI sting operation designed to nab drug trafficking criminals. He was arrested in October 1982 and charged with conspiring to smuggle $24 million worth of cocaine into the US. The key element of evidence for the prosecution was a videotape showing DeLorean discussing the drugs deal with undercover FBI agents Benedict (Ben) Tisa and West, although De Lorean's attorney Anthony Pelicano successfully demonstrated to the court that he was coerced into participation in the deal by the agents who initially approached him as legitimate investors. He was acquitted of all charges, but his reputation was forever tarnished. After his trial and subsequent acquittal, De Lorean quipped, "Would you buy a used car from me?"

In the end, sufficient funds were never raised to keep the company alive. The De Lorean Motor Company went bust in 1982, taking with it 2,500 jobs and over $100 million in investments. The British government attempted to revive some useable remnants of the manufacturing facility without success, and the Dunmurry factory was closed. De Lorean himself retired in New England, and the dream with which he had mesmerised Britain's Labour government, of industry rising out of the ashes of Ulster's sectarian conflict, was shattered. He claims that the DMCL was deliberately closed for political reasons, and at the time of closing was a solidly viable company with millions of dollars in the bank and two years of dealer orders on the books.

Approximately 9,200 cars were made between 1981 and 1982 (actual production figures are unclear, and estimates differ). Some 1983 models (manufactured late in 1982) were assembled by KAPAC (then Consolidated), a firm that had a buyback program with DMC and had bought out their remaining stock after the bankruptcy.

The vehicle has also garnered worldwide attention and celluloid fame as the basis for the time-machine in the 1985 movie Back to the Future.

Today

A very large number of the original cars are still on the road after over 20 years; most estimates put it at 6,000 cars surviving out of just over 9,000 built. There is a very active enthusiast community around the cars, with strong owners' clubs. A number of commercial enterprises set up after the demise of the De Lorean Motor Company to provide parts and service, and most of those are still in existence. In particular, DeLorean Motor Company of Texas (not affiliated with the original company) now owns the large remaining original parts stock from the factory, US stock and original suppliers.

Many aftermarket improvements have been offered over time to address some of the flaws in the original production cars, and to improve performance. A common opinion of the car is that in stock form it is somewhat underpowered, and a variety of solutions have been implemented, from complete engine swaps (either to a larger PRV engine, or to completely different engines such as the Cadillac Northstar engine), turbocharger kits (single or twin-turbo), down to simpler solutions such as improved exhausts and other normal engine tuning work.

As of 2005, one can buy a fully restored De Lorean DMC-12 for approximately US$35,000, while unrestored but good condition vehicles run from about US$15,000 upwards.

Delorean vs. DeLorean vs. De Lorean

De Lorean is more often seen spelled without the space: DeLorean. Typewritten company documents universally use the space, however, so this appears to have been the company's chosen form. In typeset documents, a half space, not a full space, appears between the two portions, and the same is visible in more stylistic representations, as on the automobiles themselves. This use of a half space probably influenced many people to see no space there.

The company's founder originally spelled his name as John Delorean. At some point in his life he began using the more European-looking De Lorean instead. During the period the De Lorean Motor Company was operating, he used a space exclusively when spelling his name in the course of business.

External links

fr:DeLorean Motor Company ja:デロリアン nl:De Lorean no:De Lorean Motor Company

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