Review
Review
Podcast
27.12.2021
Imagine a man: charismatic, rich, with unusual hobbies and a prominent wife. This man wants to shake up the ossified car industry. To do so, he plans to set up his own company to take on the giants of the industry. Everyone is talking about a daring venture, but after initial difficulties, it looks as if he will actually achieve his goal. Who comes up with the name?
Anyone typing "Elon Musk" is wrong. The man we are talking about here is John DeLorean. He was born in the car city of Detroit in 1925 and later rose to become one of the most successful car managers in the United States at a comparatively young age, at the same time overturning many industry conventions with his extroverted nature. In a dispute with his superiors, he left the US industrial giant General Motors to found his own company, the DeLorean Motor Company.
This company ended up producing exactly one model, the DMC DeLorean, in civil war-torn Northern Ireland of all places. But the DeLorean became an absolute icon, not least thanks to its appearance in the movie "Back to the Future". And yet the company died a quick death, triggered by a recession and a change of government in the UK. The subsequent downward spiral of his company drove DeLorean into an abyss, at the bottom of which the FBI caught him with 27 kilograms of cocaine in a hotel room in Los Angeles. The short history of the DeLorean Motor Company was a hell of a ride, one that would have made even Elon Musk a little pale around the nose.
DeLorean's path into the automotive industry was actually mapped out from birth. His father, an immigrant from Hungary, worked for Ford. After school, his son therefore attended the Lawrence Institute of Technology, at the time a training school for automotive engineers. However, the then 23-year-old initially sold life insurance after graduating. By his own admission, he found the work so boring that he ended up at Chrysler in 1952. After a few years there and at the small Packard Motor Company, he moved to General Motors in 1956.
At the Detroit conglomerate, DeLorean initially became a personal assistant to the Pontiac management. He quickly gained a reputation as a child prodigy. His greatest successes at Pontiac were the development of the GTO and Firebird muscle cars, with which the rather old-fashioned brand refreshed its image and became a profit machine for General Motors. In 1965, DeLorean became head of the Pontiac department - the youngest in the company's history at the age of 40 - and four years later, he became boss at Chevrolet. Within a few years, he also brought GM's badly ailing flagship brand back on track.
But despite his success, DeLorean was anything but uncontroversial at GM. He liked to present himself in public, attracted attention with his relaxed style of dress - fewer ties, more open shirts and sideburns - and maintained close contact with the press. Through his friendship with John Aubrey, the president of the MGM film studio, he regularly appeared at celebrity parties in Hollywood. He bought shares in the New York Yankees, the most successful baseball team in the USA, and after a three-year marriage to actress Kelly Harmon, he married supermodel Cristina Ferrare.
This lifestyle met with little approval at the tradition-conscious General Motors. He was promoted again in 1972, this time to Vice President of the entire group. But a year later, his constant bickering with other executives had probably worn down the high-flyer DeLorean. He resigned from his well-paid position and set himself a new goal: He wanted to found his own car manufacturer.
The project was ambitious. Since Chrysler in the 1920s, no new manufacturer had been able to establish itself on the market in the long term. However, the man-catcher DeLorean initially had no problem raising money for his project. He himself had long been a millionaire, and his Hollywood friends such as country singer Roy Clark and entertainer Sammy Davis Jr. also contributed money. In the end, the biggest donor was even the British government. DeLorean had toured the world with his plans for a new factory and had almost reached an agreement in Puerto Rico, among other places. In the end, the British government offered him the prospect of a three-digit million sum if he would build his factory in civil war-torn Northern Ireland.
The DMC DeLorean, also known as the DMC 12, was to be built there. It was a sleek sports car with gullwing doors, which the boss wanted to be both affordable and environmentally friendly. In 1978, five years after DeLorean left GM, construction of the factory began in a suburb of Belfast. It is said that 30,000 orders for the new vehicle had already been received before production began.
The timetable, which envisaged production starting in 1979, was ambitious from the outset. DMC wanted to create something in 18 months that would take large car manufacturers five years. The start was correspondingly bumpy, partly because DeLorean's hunt for generous government subsidies took its revenge. The workers in Belfast had hardly any experience in car production, if they had ever had a job at all. As a result, it took until 1981 before the first DeLorean rolled off the production line, which now cost twice as much as originally planned.
In the end, John DeLorean's vision did not really go far. A recession in the UK and unfavorable exchange rates between the British pound and the US dollar put a huge dent in demand. By the beginning of 1982, his company was already in a dangerous predicament, which is why he called on his old friends in the British government for support.
However, these friends were no longer at the levers of power. Conservative Prime Minister Margaret Thatcher had taken over the government and was not prepared to put any more money into DeLorean's increasingly precarious project in Northern Ireland. The resourceful founder, who had always been somewhat successful up to this point, was on the verge of bankruptcy.
The details of what happened next are still disputed to this day. Only one thing is clear: at the end of 1982, John DeLorean was sitting in an airport hotel in Los Angeles with 27 kilograms of cocaine on the table in front of him and two undercover FBI agents opposite him. The former car industry wunderkind was arrested. He was accused of trying to buy another 100 kilograms with the plan of using the profits from the drug trade to save his company DMC from insolvency.
In court, however, it turned out that DeLorean's former neighbor, a key witness for the prosecution, had more or less talked him into the deal at the hotel on behalf of the FBI. About two years later, a jury recognized that the desperate DeLorean had been lured into a trap and acquitted him.
This acquittal came too late for DMC. DeLorean's reputation was ruined. He himself asked sarcastically after his acquittal: "Would you still buy a used car from me?" The company went bankrupt in 1982 after only 9,000 cars had been produced. 2,500 people lost their jobs and a three-digit million sum of capital was burned. John DeLorean's wife left him shortly after his acquittal. He himself was charged with fraud and tax evasion in 1985, but was acquitted again.
While the man disappeared into obscurity in the years that followed, the DMC 12 became a cult car over the years. This is mainly thanks to the film series "Back to the Future", in which a converted DeLorean acts as a time machine. Its cult status is so strong that at the beginning of 2021, a company in Texas announced plans to start a small series production of replica DeLoreans. John DeLorean would probably be delighted with this comeback. He was reportedly working on reviving the DeLorean Motor Company in the years before his death in 2005, with a new model, the DMC 2.
Review
27.12.2021
Lars-Thorben Niggehoff
Almost 50 years ago, an eccentric, rich and uncompromising founder tried to turn the automotive industry upside down with his own company. A story about time machines, cocaine and one of the most legendary cars of all time.
Imagine a man: charismatic, rich, with unusual hobbies and a prominent wife. This man wants to shake up the ossified car industry. To do so, he plans to set up his own company to take on the giants of the industry. Everyone is talking about a daring venture, but after initial difficulties, it looks as if he will actually achieve his goal. Who comes up with the name?
Anyone typing "Elon Musk" is wrong. The man we are talking about here is John DeLorean. He was born in the car city of Detroit in 1925 and later rose to become one of the most successful car managers in the United States at a comparatively young age, at the same time overturning many industry conventions with his extroverted nature. In a dispute with his superiors, he left the US industrial giant General Motors to found his own company, the DeLorean Motor Company.
This company ended up producing exactly one model, the DMC DeLorean, in civil war-torn Northern Ireland of all places. But the DeLorean became an absolute icon, not least thanks to its appearance in the movie "Back to the Future". And yet the company died a quick death, triggered by a recession and a change of government in the UK. The subsequent downward spiral of his company drove DeLorean into an abyss, at the bottom of which the FBI caught him with 27 kilograms of cocaine in a hotel room in Los Angeles. The short history of the DeLorean Motor Company was a hell of a ride, one that would have made even Elon Musk a little pale around the nose.
DeLorean's path into the automotive industry was actually mapped out from birth. His father, an immigrant from Hungary, worked for Ford. After school, his son therefore attended the Lawrence Institute of Technology, at the time a training school for automotive engineers. However, the then 23-year-old initially sold life insurance after graduating. By his own admission, he found the work so boring that he ended up at Chrysler in 1952. After a few years there and at the small Packard Motor Company, he moved to General Motors in 1956.
At the Detroit conglomerate, DeLorean initially became a personal assistant to the Pontiac management. He quickly gained a reputation as a child prodigy. His greatest successes at Pontiac were the development of the GTO and Firebird muscle cars, with which the rather old-fashioned brand refreshed its image and became a profit machine for General Motors. In 1965, DeLorean became head of the Pontiac department - the youngest in the company's history at the age of 40 - and four years later, he became boss at Chevrolet. Within a few years, he also brought GM's badly ailing flagship brand back on track.
But despite his success, DeLorean was anything but uncontroversial at GM. He liked to present himself in public, attracted attention with his relaxed style of dress - fewer ties, more open shirts and sideburns - and maintained close contact with the press. Through his friendship with John Aubrey, the president of the MGM film studio, he regularly appeared at celebrity parties in Hollywood. He bought shares in the New York Yankees, the most successful baseball team in the USA, and after a three-year marriage to actress Kelly Harmon, he married supermodel Cristina Ferrare.
This lifestyle met with little approval at the tradition-conscious General Motors. He was promoted again in 1972, this time to Vice President of the entire group. But a year later, his constant bickering with other executives had probably worn down the high-flyer DeLorean. He resigned from his well-paid position and set himself a new goal: He wanted to found his own car manufacturer.
The project was ambitious. Since Chrysler in the 1920s, no new manufacturer had been able to establish itself on the market in the long term. However, the man-catcher DeLorean initially had no problem raising money for his project. He himself had long been a millionaire, and his Hollywood friends such as country singer Roy Clark and entertainer Sammy Davis Jr. also contributed money. In the end, the biggest donor was even the British government. DeLorean had toured the world with his plans for a new factory and had almost reached an agreement in Puerto Rico, among other places. In the end, the British government offered him the prospect of a three-digit million sum if he would build his factory in civil war-torn Northern Ireland.
The DMC DeLorean, also known as the DMC 12, was to be built there. It was a sleek sports car with gullwing doors, which the boss wanted to be both affordable and environmentally friendly. In 1978, five years after DeLorean left GM, construction of the factory began in a suburb of Belfast. It is said that 30,000 orders for the new vehicle had already been received before production began.
The timetable, which envisaged production starting in 1979, was ambitious from the outset. DMC wanted to create something in 18 months that would take large car manufacturers five years. The start was correspondingly bumpy, partly because DeLorean's hunt for generous government subsidies took its revenge. The workers in Belfast had hardly any experience in car production, if they had ever had a job at all. As a result, it took until 1981 before the first DeLorean rolled off the production line, which now cost twice as much as originally planned.
In the end, John DeLorean's vision did not really go far. A recession in the UK and unfavorable exchange rates between the British pound and the US dollar put a huge dent in demand. By the beginning of 1982, his company was already in a dangerous predicament, which is why he called on his old friends in the British government for support.
However, these friends were no longer at the levers of power. Conservative Prime Minister Margaret Thatcher had taken over the government and was not prepared to put any more money into DeLorean's increasingly precarious project in Northern Ireland. The resourceful founder, who had always been somewhat successful up to this point, was on the verge of bankruptcy.
The details of what happened next are still disputed to this day. Only one thing is clear: at the end of 1982, John DeLorean was sitting in an airport hotel in Los Angeles with 27 kilograms of cocaine on the table in front of him and two undercover FBI agents opposite him. The former car industry wunderkind was arrested. He was accused of trying to buy another 100 kilograms with the plan of using the profits from the drug trade to save his company DMC from insolvency.
In court, however, it turned out that DeLorean's former neighbor, a key witness for the prosecution, had more or less talked him into the deal at the hotel on behalf of the FBI. About two years later, a jury recognized that the desperate DeLorean had been lured into a trap and acquitted him.
This acquittal came too late for DMC. DeLorean's reputation was ruined. He himself asked sarcastically after his acquittal: "Would you still buy a used car from me?" The company went bankrupt in 1982 after only 9,000 cars had been produced. 2,500 people lost their jobs and a three-digit million sum of capital was burned. John DeLorean's wife left him shortly after his acquittal. He himself was charged with fraud and tax evasion in 1985, but was acquitted again.
While the man disappeared into obscurity in the years that followed, the DMC 12 became a cult car over the years. This is mainly thanks to the film series "Back to the Future", in which a converted DeLorean acts as a time machine. Its cult status is so strong that at the beginning of 2021, a company in Texas announced plans to start a small series production of replica DeLoreans. John DeLorean would probably be delighted with this comeback. He was reportedly working on reviving the DeLorean Motor Company in the years before his death in 2005, with a new model, the DMC 2.
About the author
Lars-Thorben Niggehoff
Lars-Thorben Niggehoff writes about real estate, start-ups and investing.
