Magazine Memories: Dreams Of Delorean

Ronnie Schreiber
by Ronnie Schreiber

TTAC readers, the Best and the Brightest, seemed to have liked the first Magazine Memories so I started to sort and organize the boxes of old buff books in the basement, with an eye towards another column for you guys. The first piece was about a Sports Car Graphic from 1969, a golden age for both performance cars and auto racing. I thought it would be interesting, by way of contrast, to look at an era of less worthy automobiles, the “malaise era”, so named because of a speech given by Jimmy Carter during his presidency that attempted to address a sense of national lethargy. Though Carter never actually used the word malaise, the tag stuck. Looking at magazines from the middle of the Carter years, the winter of 1980-81, though, the cars were so boring and mediocre that I thought it’d be too much of a challenge to even joke about how boring and mediocre they were.



One topic that looked promising was the number of splashy concept cars on the covers with radical styling or technological features that we now know as being automotive vaporware. There was just an entrepreneur, a prototype and sometimes even investors, but the car magazines would treat them like the holy grail, with full feature treatment between the covers. Examples of that might be the F1 Tyrell inspired Panther 6 six-wheeler, or automotive writer & designer Robert Cumberford’s BMW powered, Citroen suspended, wood veneered Martinique – both of which I kind of like.

One of those concepts getting the full feature treatment in 1977 was the DeLorean DMC concept. At the time, John DeLorean was still in the road show stage of his enterprise, trying to entice various governments into providing funding and it then looked as though the car would be assembled on an abandoned military base in Puerto Rico. The short history is that though much of the production car’s styling including the iconic stainless steel exterior remained intact, when the DeLorean finally started production in Northern Ireland almost 4 years later nothing of the car’s mechanical or structural designed remained except for the rear mounted 6cyl PRV engine. With Lotus providing the production design and engineering, and pressed for time, it was essentially a rear-engined, gull-winged Lotus Esprit with a stainless skin.

To prove to the British government that it was viable (and convince them to free up an additional $30 million set aside


in the original aid package), DeLorean kept the factory running at capacity even though sales were about half that amount. DeLorean was in receivership in barely more than a year, and John was in handcuffs as a result of a cocaine sting by the end of 1982.

As I’d just written a review of Karl Ludvigsen’s book about Colin Chapman, and since the DeLorean deal and subsequent scandal were significant events in Chapman’s career and life (and his impending legal difficulties may have contributed to his fatal heart attack) I was drawn to the story. Then I realized it might be worthwhile to see how the car magazines covered the DeLorean story as it developed. Were the journalists starry-eyed or were they appropriately skeptical?

The DeLorean first shows up in my collection on the cover of the July 1977 issue of Road & Track. The cover has two photos of the DeLorean styling push-car (at the time there was a push-car styling model and one running prototype), with the heading “DeLorean Rear-Engine Giugiaro Design with Stainless Steel Skin on a Plastic Chassis”. Inside is an extensive article on the project by John Dinkel along with a styling analysis by Werner Buhrer of what was then called the DMC 12, as well as a sidebar by John Lamm on how John DeLorean arranged financing for the project, “Got A Spare $90 Million?”

What’s most interesting about the Dinkel piece is just how little of it ended up being relevant to the production DeLorean car. The article is built around an interview with then DMC chief engineer, Bill Collins, who left a long career at GM to join John DeLorean’s new project in 1974, and is illustrated with static photos of the styling model and technical drawings of the composite chassis. Collins discusses the design brief, why they went with a rear-engine layout and how they settled on using Italdesign. Everybody seemed particularly happy with Giugiaro’s solution for 10mph bumpers, something else that didn’t make it to the production car. What I find striking about the article is how much credibility R&T gives the project despite the fact that only one running prototype had been finished at that time. Though they mention that the DeLorean company only had 5 engineers on its staff, they accepted Collins’ claims that production would start by the end of 1978 with no skepticism.

A good deal of the article focuses on “the most interesting aspect of the DeLorean”, the way the structure of the car was going to be built up of composite panels made with John DeLorean’s propriety Elastic Reservoir Molding (ERM) process. ERM combines resin infused open cell foam, fiber (glass or synthetic) and light pressure into a lightweight and strong sandwich. The car would be a plastic monocoque with metal subframes carrying drivetrain and suspension components.

Neither that monocoque, nor ERM ever made it to the production car. Nor was the DMC 12 destined to be built in Puerto Rico, where Dinkel suggested early orderers should reserve flights to arrange factory pickup in late 1978. The specified Peugeot Renault Volvo sourced V6, though not installed in the prototype, did make it to production.

There is some interesting foreshadowing in the article. In comparing the DMC 12’s proposed specs with those of other cars in its segment, Dinkel mentions how similar to the Lotus Esprit it was though at the time, the two cars had no connection other than sharing an exterior stylist. Collins expressed admiration for the Esprit’s handling, performance and ride but said that the DMC would have more headroom, enough for John DeLorean’s 6’4″ frame. The Esprit also comes up in Buhrer’s styling analysis, where he calls the DeLorean a “direct nephew” of Giugiaro’s design for the Esprit. It’s humorous to see him describe the DMC as being designed around “big wheels” and then see that there were 15s in front and 16s in back. Not 20″ rims for sure, but bigger than the 14s more commonly found on sports cars of the era.

Coincidentally, the magazine ran a review of the then new Lotus Esprit and an article about the James Bond Esprits including the submarine in the pages immediately preceding the DeLorean features. I think it stands to reason that John DeLorean read that issue of Road & Track and I think there’s a good chance that Colin Chapman read it as well. While Dinkel and DeLorean may have genuinely admired Chapman and the cars he made, Chapman saw DeLorean, or more specifically the two seat sports car he was planning to sell in America, as a direct and possibly fatal threat to Lotus’ own sales in the US.

Besides a connection to the Esprit, another omen for the future was in a discussion of price. In 1977, the target price of the DeLorean car was $13,000. Though John DeLorean was not a strong believer in market research they had done a couple of focus clinics and he may have been swayed by one result. Datsun 280Z and Porsche 911 owners’ rated the DeLorean as more desirable when the suggested MSRP was raised significantly. This may have convinced John D that the car was less price sensitive than it actually was, as production realities doubled the price of the car.

Since so little of the prototype ended up on the production car, and because of the scandals that followed, the most interesting part of R&T’s coverage of the DMC was John Lamm’s look into DeLorean’s financing and attempts to locate and build his factory. As the article went to press, DeLorean expected to receive SEC approval to sell stock to investors and potential dealers. That was the money DeLorean used to operate while trying to swing government financing. In July 1977, it looked like the gov’t of Puerto Rico (along with the Feds) would pony up $64.75 million of the $90 million the project needed to go forward.

When written, the Lamm piece said “it is about 90 percent sure the car will be built in Puerto Rico at the abandoned Ramey Air Force base.” At the time DeLorean and his early backers claimed to have had about $2.3 million of their own money in the project. In retrospect it looks like the house of cards it in fact was, but John DeLorean was everybody’s fair haired guy and the automotive press generally wanted him to succeed.

It took almost four years to get the DeLorean car into production. By then, the ERM based composite monocoque had been discarded, along with Bill Collins who had moved on to what would be a short lived career converting American Motors plants to building Renaults. The proposed location of the plant shifted from Puerto Rico to elsewhre to ultimately settling on Northern Ireland. The British government, eager to do something about 30% unemployment there and newly awash in North Sea oil, agreed to a $115 million package of loans, grants and stock purchases in 1978 to have DeLorean locate their plant in Dunmurry, just west of Belfast.

That aid package did not make Colin Chapman a happy man. He’d competed against Italian and French teams in Grand Prix that had been funneled government money via state owned enterprises like the ELF oil company. When Lotus had requested a relatively small loan from the British government to tide it over one of its routine financial doldrums, it had been refused. Now an American entrepreneur without even a production prototype was getting over $100 million to build a car that would directly compete with Lotus in the United States. Chapman vowed to get his share. That and the urgent need for production engineering due to DeLorean having promised Her Majesty’s government that production would start within 18 months (a completely unrealistic figure to build a greenfield plant, let alone do the production design work), meant that DeLorean and Lotus were a logical marriage of convenience.

Remember, in 1978 Lotus was busy winning the F1 championship with a revolutionary ground effects car. Their cachet was valuable and DeLorean gained credibility by having the World Championship automaker involved in his project. DeLorean and Chapman personally worked out a deal for Lotus to do design andproduction engineering for the finished car. The nature of that deal, how much funds went to which parties, and whether or not DeLorean, Chapman and Fred Bushell, Lotus accountant, diverted millions remains somewhat murky to this day. Bushell eventually did prison time and there is a paper trail indicated that as much as $16 million or so ended up with a Swiss concern named GPD. Years earlier, Chapman had set up Grand Prix Drivers in Switzerland as a means of reducing his and his drivers’ tax liabilities.

Production on the DeLorean car began in early 1981 and by the spring 1981 magazine issues, there were cars arriving at dealers in the US. The May 1981 Car and Driver has a large front shot of the DMC on the cover (green Irish hills in the background) with the caption “Gull-winged, stainless-steel jet-set dream come true”. Inside is a feature article by Don Sherman, a personal profile of John DeLorean by Jean Lindamood, and Automotive News’ financial editor Edward Lapham contributed an article on the financing of DeLorean’s dream titled “Where the Money Was, Shades of Billy Durant.”

Though the production car looked very close to the prototype in terms of styling, the sleek 10mph bumpers being the most obvious casualty, one look at the photos of the bare backbone chassis shows that DeLorean had abandoned completely the idea of a composite monocoque in favor of what at the time was standard Lotus design and construction. It would not be inaccurate to describe the DeLorean car as a V6 Renault powered Esprit with the drivetrain flipped around to hang the engine off the back. The composite monocoque was discarded, rejected in favor of the standard Lotus method of molding the body in a top and bottom half and bonding the two halves to from a unitary structure. The ERM process and composite was also rejected in favor of Chapman’s own patented VARI process. Bill Collins, not thrilled about being replaced, characterized Lotus engineering as “whittle and fit.”

Sherman mentions how DeLorean’s 339 dealers (not too far off from John DeLorean’s 1977 prediction of 400) and many deposit paying customers were eagerly anticipating delivery. This was a car announced in 1977 for delivery in late 1978 finally arriving at dealers in 1981. He described DeLorean’s globe-hopping in search of a factory site, or more accurately, for government financing to build his factory: Detroit, Kansas, Pennsylvania, France, Spain, Portugal, Puerto Rico and finally Northern Ireland. The delay had driven up costs. A car intended to slot between the Corvette and Porsche was now much closer in the latter’s territory, costing $25,000. Since the cars had not yet arrived in the US at press time, Sherman didn’t make a dynamic appraisal of the car in US trim, but he did offer his less than glowing assessment of the poorly executed bumpers and the “prosaic” interior with its ergonomic problems.

Still, the folks at C and D were optimistic. Like I said, auto journalists were rooting for one of their favorites, John DeLorean, assisted by Chapman another man esteemed by car journos. “We, like John Z., feel much like proud new parents,” was how Sherman wrapped up his article. In fact, Car and Driver was so enthused about the DeLorean that they actually broke the embargo on the story (back then there were huge delays between writing a story and it reaching subscribers) by a month, not that John Z would have objected to the publicity.

Lindamood’s profile of DeLorean the man is pretty much by the numbers. Packard wunderkind discovered by Bunkie Knudsen, put in charge of Pontiac, invents modern muscle car and makes Pontiac very successful, moves to run Chevy and stymied by GM’s hidebound bureaucracy, leaves GM, writes On A Clear Day You Can See GM but decides against publishing it.

Ed Lapham’s look into the DMC’s financing is a bit more interesting. It seems that for the first time some of John Z’s sums didn’t add up. Lapham points out that DeLorean was a firm believer in OPM, other people’s money, and that the $10 million of his own money that he claimed as out of pocket expenses, didn’t jibe with documents filed with state and federal regulators and was probably significantly less. DeLorean’s primary contribution of assets to the project were his “rights” to the idea of the car itself, its design and the processes for making it (not all elements of which made it to the final product). He first sold those rights to his original partners, then bought them back in exchange for stock in the company. Those same rights were then sold to 134 investors organized by the Oppenheimer firm, for $18 million, and they were entitled to a per car royalty. In addition, DeLorean raised another $8.6 million selling stock in the DeLorean Motor Company to prospective dealers. He also sold a half million shares of DMC to Johnny Carson and another private investor at $2 a share. It appears that the millions used to bring Chapman into the deal came from


that ~$29 million.

Of course, at the time, nobody knew about the deal with GPD. However, though DeLorean was all smiles and cheer now that the car was in actual production and being shipped, there were some storm clouds on the horizon. Lapham raised the issue of a dispute between the car company and the British government, which was reluctant to provide an additional $30 that the company said it was due as an inflation adjustment, and that that dispute might jeopardize government guarantees on $24 million the company had borrowed from banks.

So even as the company was getting off the ground, Lapham asked, “Will DeLorean make it?” His conclusion: maybe. Lapham admires DeLorean’s team for doing a “prudent job of marshalling and disbursing” the costs of starting up a car company and that barring a disastrous recall or complete collapse of the market “the project should be able to remain afloat through the first crucial eighteen months of production.”

That was published in May of 1981. Lapham’s time frame and the need to be prudent with costs turned out to be fatally accurate. Less than 18 months later, in July of 1982, the cover of Car and Driver featured a drawing of chickens coming home to roost in a DeLorean coop up on blocks with the caption: “Decline and Fall – DeLorean’s gull-wing in a tailspin”. John DeLorean had not yet lost complete control of his company. His drug bust for attempting to broker a cocaine deal that he hoped would net him enough money to keep the company afloat was half a year in the future, as were allegations of financial misdeeds that would tar both DeLorean and Chapman.

DeLorean Motor Company was not yet completely dead, as John was still scrambling to refinance but C and D’s John Hilton took a look at the comatose DMC barely a year after it shipped its first cars, in a feature article titled “The Decline and Fall of the DeLorean Dream”. Hilton traces the roots of DeLorean’s failure to his dreaming too big. Small car companies face a large cost differential disadvantage. They simply don’t have the economies of scale to compete so the incentive is to keep production high and costs low.

Also in the magazine issue is a piece by Bruce McCall. The automotive writers’ guild insists that no mention of automotive entrepreneurial failure may be written without at least passing reference to Wm C. Durant, so McCall gives us a profile of the founder of General Motors in a short piece called “Mr. DeLorean, Meet Mr. Durant”.

DeLorean did manage to accomplish something. He may have committed fraud but he was not a complete fraud. In seven years he went from a concept to a company to a finished car produced in the thousands, including designing the car and the factory to assemble it. With innovative methods, some of it legal, he raised over $217 million dollars, hired some very talented industry insiders, and at least gave the impression of a going concern. Hilton was not the only journalist who took note of DMC’s “stylish” Park Avenue offices. Hilton reviews the history of the company and prototypes, mostly the work of Collins, and of DeLorean’s discovery of how easily government funds were offered when he mentioned 2,000 factory jobs.

Production began in early 1981. Dealers reported 30,000 pre-orders and when the first cars showed up on the showrooms, and they fetched price premiums over sticker MSRP. Cutty Sark scotch liquor advertisements featured DeLorean, both the car and the man. American Express offered a gold plated edition of the DeLorean to its members at $85K a pop and sold a couple. Few cars since the Model A were greeted with more anticipation or treated with as much free publicity.

And then barely a year later, the plant was shuttered and DeLorean joined Bricklin and Tucker in that gray zone between entrepreneur and scam artist in the public imagination.

Things at first looked fine. By the fall of 1981, all dealers had started receiving their allocations of cars. By October, they were selling over 700 cars a month, not a bad figure for a new company selling a two-seater with limited appeal. Remember, most years GM is happy to sell 25,000 Corvettes. The problem was that DeLorean kept the factory spinning out cars at its maximum capacity, more than two times what sales were at their best. Apparently, DeLorean was loath to cut production, fearing that would kill any chance of getting the disputed funds from the British government.

Unsold cars started piling up. Had they not built so many, the funds used to build them might have kept the company alive while it grew sales, but by November 1981, production rates had climbed to 20,000 units a year and by the new year they were running out of operating cash. Before February 1982 was out, DeLorean had lost control of the factory and it was in receivership.

Many blame Lotus, the cost of reengineering the car, and whatever funds Chapman, Bushell and DeLorean may have diverted to their own accounts, for the demise of the DMC. Hilton points out, though, that besides the costs incurred doing business with Lotus, DeLorean himself had unrealistic expectations. DeLorean preferred, it seems, to listen to those Porsche owners impressed with a high price tag than his own team’s market research that showed that demand was directly proportional to price. DeLorean ignored analysts who pointed out that even Porsche didn’t sell 20,000 911s a year.

Though at the time this particular magazine issue went to the printers in 1982 John DeLorean was still scrambling to find financing to reacquire control of the Dunmurry plant, it was pretty clear that it was all over but for the shouting (and indictments). Hilton concluded that DeLorean could have made a go of it had he had lower expectations and built fewer than 10,000 cars a year to start with, but that “overproduction appears to have been the biggest stumbling block in the DeLorean enterprise.” He could have been a contender but he was fighting way above his weight class. Even when production could have been cut to avert the solvency crisis, John Z overrode both his financial and sales staffs and increased production. The converse of Ed Lapham’s prediction came true, they were not prudent with their resources so they did not survive 18 months.

In the end, DeLorean might have been swayed by his own legends. Though it ran a couple of months before Hilton’s post-mortem of DeLorean, the April 1982 issue of Car and Driver was finalized after the company’s financial situation was already widely known to be insecure and maybe even after John lost control of Dunmurry in February. Cutty Sark, though, was still running the ad, headlined “One out of every 100 new businesses succeeds. Here’s to those who take the odds.”

Ronnie Schreiber
Ronnie Schreiber

Ronnie Schreiber edits Cars In Depth, the original 3D car site.

More by Ronnie Schreiber

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  • Catbert430 Catbert430 on Jun 28, 2010

    I remember the first DeLorean car that I ever saw in the flesh. My girlfriend and I were driving from Phoenix to the O.C. in the Spring of 1982 on the I-10 and stopped in Blythe for a break. I saw the DMC glistening in the sun and ran over to get a closer look. At that point, the couple who owned it came out of the rest stop and I told them that I really admired their new car. They told me that the air conditioner had already broken and only one of the electric windows was still working. It was 112 degrees and the working window only opened a 4 or 5 inch slot. They told us that they were baking to death, hated the car and intended to get rid of it as soon as they got back to L.A. I never saw another one in person but, my cousin had a mango-colored Bricklin.

  • Catbert430 Catbert430 on Jun 29, 2010

    Weird coincidence. I hadn't seen a DeLorean on the road since 1982 and, when I left work yesterday, I saw one right in front of me that was in mint condition. It seemed impossibly low when surrounded by all of today's high-waisted sedans and crossovers.

  • Kwik_Shift Hyunkia'sis doing what they do best...subverting expectations of quality.
  • MaintenanceCosts People who don't use the parking brake when they walk away from the car deserve to have the car roll into a river.
  • 3-On-The-Tree I’m sure they are good vehicles but you can’t base that on who is buying them. Land Rovers, Bentley’ are bought by Robin Leaches’s “The Rich and Famous” but they have terrible reliability.
  • SCE to AUX The fix sounds like a bandaid. Kia's not going to address the defective shaft assemblies because it's hard and expensive - not cool.
  • Analoggrotto I am sick and tired of every little Hyundai Kia Genesis flaw being blown out of proportion. Why doesn't TTAC talk about the Tundra iForce Max problems, Toyota V35A engine problems or the Lexus 500H Hybrid problems? Here's why: education. Most of America is illiterate, as are the people who bash Hyundai Kia Genesis. Surveys conducted by credible sources have observed a high concentration of Hyundai Kia Genesis models at elite ivy league universities, you know those places where students earn degrees which earn more than $100K per year? Get with the program TTAC.
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