De Lorean Motor Company
Encyclopedia
The original DeLorean Motor Company (DMC) was a short-lived automobile manufacturer formed by automobile industry executive John DeLorean in 1975. It is remembered for the one model it produced — the distinctive stainless steel
Stainless steel
In metallurgy, stainless steel, also known as inox steel or inox from French "inoxydable", is defined as a steel alloy with a minimum of 10.5 or 11% chromium content by mass....

 DeLorean DMC-12 sports car
Sports car
A sports car is a small, usually two seat, two door automobile designed for high speed driving and maneuverability....

 featuring gull-wing door
Gull-wing door
Gull-wing door is an automotive industry term describing car doors that are hinged at the roof rather than the side, as pioneered by the 1952 Mercedes-Benz 300SL race car and its road-legal version introduced in 1954....

s — and for its brief and turbulent history, ending in receivership
Receivership
In law, receivership is the situation in which an institution or enterprise is being held by a receiver, a person "placed in the custodial responsibility for the property of others, including tangible and intangible assets and rights." The receivership remedy is an equitable remedy that emerged in...

 and bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....

 in 1982. Near the end, in a desperate attempt to raise the funds his company needed to survive, John DeLorean was filmed appearing to accept money to take part in drug trafficking, but was subsequently acquitted of charges brought against him on the basis of entrapment
Entrapment
In criminal law, entrapment is conduct by a law enforcement agent inducing a person to commit an offense that the person would otherwise have been unlikely to commit. In many jurisdictions, entrapment is a possible defense against criminal liability...

.

The DeLorean DMC-12 shot to worldwide fame in the Back to the Future movie trilogy
Back to the Future trilogy
The Back to the Future trilogy is a comedic science fiction adventure film series written by Bob Gale and Robert Zemeckis, directed by Zemeckis, produced by Amblin Entertainment and distributed by Universal Pictures. The main plot follows the adventures of a high school student Marty McFly and...

 as the car made into a time machine
Time travel
Time travel is the concept of moving between different points in time in a manner analogous to moving between different points in space. Time travel could hypothetically involve moving backward in time to a moment earlier than the starting point, or forward to the future of that point without the...

 by eccentric scientist Doctor Emmett L. Brown
Emmett Brown
Doctor Emmett Lathrop "Doc" Brown, Ph.D. is a fictional character and one of the lead characters in the Back to the Future film trilogy, in which he is the inventor of the first time machine, which he builds out of a DeLorean sports car...

, although the company had ceased to exist before the first movie was made.

In 1995, Texas entrepreneur Stephen Wynne started a separate company using the "DeLorean Motor Company" name and shortly thereafter acquired the remaining parts inventory and the stylized "DMC" logo trademark of DeLorean Motor Company. The current DeLorean Motor Company located near Houston is not, and has never been, associated with the original company but supports owners of DeLorean cars. DMC (Texas), as they are known, has an additional five authorized, franchised dealers in Bonita Springs, Florida; Crystal Lake, Illinois; Garden Grove, California; Bellevue, Washington and Hem, The Netherlands.

Beginning

John DeLorean founded the DeLorean Motor Company in Detroit, Michigan
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...

 on October 24, 1975. He was already well known in the automobile industry as a capable engineer, business innovator, and youngest person to become a General Motors (GM) executive. Investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

 came primarily in the form of business loans from the Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...

 and from the formation of partnership
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...

s and private investment from select parties, including The Tonight Show
The Tonight Show Starring Johnny Carson
The Tonight Show Starring Johnny Carson is a talk show hosted by Johnny Carson under the Tonight Show franchise from 1962 to 1992. It originally aired during late-night....

host Johnny Carson
Johnny Carson
John William "Johnny" Carson was an American television host and comedian, known as host of The Tonight Show Starring Johnny Carson for 30 years . Carson received six Emmy Awards including the Governor Award and a 1985 Peabody Award; he was inducted into the Television Academy Hall of Fame in 1987...

 and entertainers Roy Clark
Roy Clark
Roy Linwood Clark is an American country music musician and performer. He is best known for hosting Hee Haw, a nationally televised country variety show, from 1969–1992. Clark has been an important and influential figure in country music, both as a performer and helping to popularize the genre...

 and Sammy Davis, Jr.
Sammy Davis, Jr.
Samuel George "Sammy" Davis Jr. was an American entertainer and was also known for his impersonations of actors and other celebrities....

. Money was also gained later through a dealer investment program in which those dealerships offering DeLorean's cars for sale were made shareholders in the company.

DeLorean also sought lucrative incentives from various government and economic organizations to pay for constructing the company's automobile manufacturing facilities. To gain these, he looked to build his first factory in a country or area where unemployment was particularly high. One candidate was the Republic of Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...

, although the country's then Minister for Industry and Commerce
Minister for Enterprise, Trade and Employment (Ireland)
The Minister for Jobs, Enterprise and Innovation is the senior minister at the Department of Jobs, Enterprise and Innovation in the Government of Ireland.The current Minister for Jobs, Enterprise and Innovation is Richard Bruton, TD...

, Desmond O'Malley
Desmond O'Malley
Desmond Joseph "Des" O'Malley is a former Irish politician.Born in Limerick, O'Malley was raised in a local political dynasty that had a strong association with Fianna Fáil. Elected to Dáil Éireann in 1968, he quickly became a trusted confidante of Taoiseach Jack Lynch...

, decided not to support the project. A deal in Puerto Rico
Puerto Rico
Puerto Rico , officially the Commonwealth of Puerto Rico , is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin Islands.Puerto Rico comprises an...

 was about to be agreed when DeLorean took up a last-minute offer from the Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...

's Industrial Development Board. The British government was very keen to create jobs in Northern Ireland to reduce sectarian violence
Sectarian violence
Sectarian violence and/or sectarian strife is violence inspired by sectarianism, that is, between different sects of one particular mode of ideology or religion within a nation/community...

 by reducing unemployment. As part of this offer, DeLorean was apparently under the impression that the British government would provide his company with Export Credit
Export Credit Agencies
An export credit agency or Investment Insurance Agency, is a private or quasi-governmental institution that act as an intermediary between national governments and exporters to issue export financing...

 financing. This would provide a loan of 80% of the wholesale cost of the vehicles (US$20,000) upon completion and delivery for shipping.

Manufacturing facility

In October 1978, construction of the 6-building, 660,000 ft² (61,000 m²) manufacturing plant began in Northern Ireland and was completed in 16 months by Farrans McLaughlin & Harvey. Officially known as DMCL (DeLorean Motor Cars, Ltd.), the facility was located in Dunmurry
Dunmurry
Dunmurry is an urban townland, in County Antrim, Northern Ireland. Located between Belfast and Lisburn, it was once a rural village, but is now within the Greater Belfast conurbation...

, a suburb of Belfast
Belfast
Belfast is the capital of and largest city in Northern Ireland. By population, it is the 14th biggest city in the United Kingdom and second biggest on the island of Ireland . It is the seat of the devolved government and legislative Northern Ireland Assembly...

. It was situated on an interface between two communities with differing religious predominations: Catholic Twinbrook and Protestant
Protestantism
Protestantism is one of the three major groupings within Christianity. It is a movement that began in Germany in the early 16th century as a reaction against medieval Roman Catholic doctrines and practices, especially in regards to salvation, justification, and ecclesiology.The doctrines of the...

 Dunmurry (coordinates: 54°32′46"N 6°1′3"W). The facility had separate entrances for each side, but this was more of a geographic convenience than it was for religious segregation.

Unit production
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...

 was scheduled to begin in 1979, but engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

 delays and budget
Budget
A budget is a financial plan and a list of all planned expenses and revenues. It is a plan for saving, borrowing and spending. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods...

 overruns caused the assembly line
Assembly line
An assembly line is a manufacturing process in which parts are added to a product in a sequential manner using optimally planned logistics to create a finished product much faster than with handcrafting-type methods...

s to start only in early 1981. Workers at the factory were generally inexperienced; many never had jobs before joining DMC. This may have contributed to the reported quality issues
Quality Assurance
Quality assurance, or QA for short, is the systematic monitoring and evaluation of the various aspects of a project, service or facility to maximize the probability that minimum standards of quality are being attained by the production process...

 attributed to the early production vehicles and the subsequent establishment of Quality Assurance Centers (QAC) located at various delivery locations. QACs were set up in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...

, New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...

 and Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....

 where some of the quality issues were to be addressed and resolved before delivery to dealership
Car dealership
A car dealership or vehicle local distribution is a business that sells new or used cars at the retail level, based on a dealership contract with an automaker or its sales subsidiary. It employs automobile salespeople to do the selling...

s. Some of the issues related to the fitting of body panels, higher-output alternators, and gullwing door adjustments.

The combined efforts of quality assurance improvements at the factory and the post-production quality assurance
Quality Assurance
Quality assurance, or QA for short, is the systematic monitoring and evaluation of the various aspects of a project, service or facility to maximize the probability that minimum standards of quality are being attained by the production process...

 done at the QACs were generally successful, although workmanship complaints would still occasionally arise; the 1981 DeLoreans were delivered with a 12-month, 12000 mi (19,312.1 km) warranty
Warranty
In business and legal transactions, a warranty is an assurance by one party to the other party that specific facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed.In real estate transactions, a...

. By 1982, improvements in components and the more experienced workforce meant that production quality was vastly improved. Disputes between dealerships and customers arose later because many dealerships refused to do warranty work because they were not reimbursed.

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 ($57,500 in 2008 dollars) 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 DeLorean looked virtually identical. Some dealerships painted their cars on delivery to help make theirs more distinctive. DMC 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.

In 1981, it was reported there were plans to have made a 4-door version of the car (perhaps on a longer wheelbase) for 1983. It was to have been of stainless steel, and with gullwing doors.

Downturn

The lack of demand, cost overruns, and unfavorable exchange rates began to take their toll on DMC's cash flow in late 1981. The company had estimated their break-even point to be between 10,000 and 12,000 units, but sales were only around 6,000. In response to the income shortfall, a restructuring plan was devised where a new "DeLorean Motors Holding Company" would be formed, which in turn would have become corporate parent to DMC 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 United States Securities and Exchange Commission
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...

 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 DeLorean 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 US Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...

, the Drug Enforcement Administration
Drug Enforcement Administration
The Drug Enforcement Administration is a federal law enforcement agency under the United States Department of Justice, tasked with combating drug smuggling and use within the United States...

, DeLorean, his investors, and the US court system. At some point in 1982, John DeLorean became the target of an FBI sting operation designed to arrest drug traffickers. 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 DeLorean's attorney Howard Weitzman
Howard Weitzman
Howard Weitzman is a prominent American trial lawyer. He is a graduate of the University of Southern California and University of Southern California Law Center . He was admitted to the state bar in 1966...

 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, DeLorean quipped, "Would you buy a used car from me?"

In the end, sufficient funds could not be raised to keep the company alive. DMC went bust in 1982, taking with it 2,500 jobs and over $100 million in investments. The British government attempted to revive some usable remnants of the manufacturing facility without success, and the Dunmurry factory was closed. DeLorean himself retired in New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...

, and the dream with which he had mesmerized Britain's Labour government, of industry rising out of the ashes of Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...

's sectarian conflict
The Troubles
The Troubles was a period of ethno-political conflict in Northern Ireland which spilled over at various times into England, the Republic of Ireland, and mainland Europe. The duration of the Troubles is conventionally dated from the late 1960s and considered by many to have ended with the Belfast...

, was shattered. He claimed 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 9,000 cars were made between January 1981 and December 1982, although actual production figures are unclear and estimates differ. Some of the cars manufactured in 1982, but not shipped to the states (as the US arm of DMC had no money to 'buy' the cars from the factory in Northern Ireland), with 15XXX and 16XXX Vehicle Identification Numbers are actually 1982 models that were given later VINs, dated 1983, by Consolidated International (now known as Big Lots
Big Lots
Big Lots, Inc. is a Fortune 500 retail corporation with annual revenues well over $4 billion.Its department stores focus mainly on selling closeout and overstock merchandise. The company is based in Columbus, Ohio, USA and currently operates over 1,400 stores in 47 states...

), a company that had a buyback program with DMC and had bought out the remaining unsold cars and also the inventory of unused parts left in the factory after the bankruptcy.

Today

A large number of the original cars are still on the road after over 25 years; most estimates put it at 6,500 cars surviving out of just over 9,000 built. There is an active enthusiast community around the cars, with strong owners' clubs. A number of businesses were set up after the demise of DMC to provide parts and service, and most of those are still in existence. In particular, DMC (based in Humble, Texas
Humble, Texas
Humble is a city in Harris County, Texas within the Houston–Sugar Land–Baytown metropolitan area.As of the 2000 census, the city population was 14,579. The city shares a zip code with the small Houston neighborhood of Bordersville, although people who live in Bordersville still have Humble...

), operates under entirely new ownership. It acquired the original company's assets, now owns trademark and copyright registrations for the brand and the DMC-12 automobile, and inventories the largest 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
PRV engine
The PRV engine is an automobile petrol V6 engine that was developed jointly by Peugeot, Renault and Volvo Cars – and sold from 1974 to 1998. It was gradually replaced after 1994 by another joint PSA-Renault design, known as the ES engine at PSA and the L engine at Renault.-Corporate history:The...

, or to completely different engines such as the Cadillac Northstar engine, turbocharger
Turbocharger
A turbocharger, or turbo , from the Greek "τύρβη" is a centrifugal compressor powered by a turbine that is driven by an engine's exhaust gases. Its benefit lies with the compressor increasing the mass of air entering the engine , thereby resulting in greater performance...

 kits (single or twin-turbo), down to simpler solutions such as improved exhausts and other normal engine tuning
Engine tuning
Engine tuning is the adjustment, modification or design of internal combustion engines to yield optimal performance, to increase an engine's power output, economy, or durability....

 work.

Despite being cleared of all drug trafficking charges, DeLorean still had to battle many legal cases (stemming from the company's bankruptcy) well into the 1990s. He declared bankruptcy in September 1999 and was evicted from his 434 acre (1.8 km²) New Jersey estate in March 2000. He died of stroke complications at 80 years old on March 19, 2005.

In August 2007, it emerged that due to demand for the DeLorean DMC-12, it would go back into limited production. Businessman Stephen Wynne has purchased all the remaining parts for the car and builds them in Houston
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...

.
Currently, a DeLorean can be assembled from the ground up using a combination of new, original and reproduction parts for US$57,500, while unrestored but good condition vehicles run from about US$25,000 upwards.

On December 3, 2009, DMC released a collection of t-shirts and hats in collaboration with streetwear brand The Hundreds, featuring modernized images of the DMC-12 in Los Angeles culture based graphic designs. The collaboration project also includes a special edition DMC-12 painted in The Hundreds recognizable JAGS pattern in black and flat black which will be also for sale on December 3, 2009 and displayed at The Hundreds flagship store in Los Angeles the entire day.

In November, 2010, in collaboration with DMC, Nike
Nike, Inc.
Nike, Inc. is a major publicly traded sportswear and equipment supplier based in the United States. The company is headquartered near Beaverton, Oregon, which is part of the Portland metropolitan area...

 released a limited edition DeLorean Dunk shoe with an estimated production of 1,000 pairs at a suggested retail price of $90.

In October, 2011, the DeLorean Motor Company of Humble, Texas, announced intentions to sell custom-made electric DeLoreans by 2013.

See also

  • List of notable business failures
  • List of defunct United States automobile manufacturers
  • Logan Machine Company
    Logan Machine Company
    LMC is both the tradename and an abbreviation for Logan Manufacturing Company - a US manufacturer of snowcats that ceased operation in 2000. LMC was formed in 1978 when John DeLorean purchased the snowcat division from Thiokol...

    , the snowcat company owned by John DeLorean
  • Thiokol
    Thiokol
    Thiokol is a U.S. corporation concerned initially with rubber and related chemicals, and later with rocket and missile propulsion systems...

    sold DeLorean its snowcat division in 1978

Further reading

  • John Z. DeLorean, Ted Schwarz, Delorean, Zondervan (September, 1985), ISBN 0-310-37940-7
  • Ivan Fallon, James Srodes, Dream Maker: The Rise and Fall of John Z Delorean (November, 1985), ISBN 0-399-12821-2
  • William Haddad, Hard Driving : My Years with John DeLorean (August 12, 1985), ISBN 0-394-53410-7
  • J Lamm, DeLorean Stainless Steel Illusion, 2nd edition (2003), ISBN 0-9744141-0-7
  • R. M. Clarke, Delorean 1977-1995 Gold Portfolio (December 28, 1995), ISBN 1-85520-331-6
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