How Back to the Future saved the DeLorean
John DeLorean tried everything to rescue his beloved machine, but in the end, only Hollywood could save the DMC.Peter Iantorno February 25, 2015
"It's as good as gold... gold weighs more than this for heaven's sake." These were the fateful words uttered by John DeLorean, owner and CEO of the DeLorean Motor Company and one of the most famous names in the auto industry, as he held in his hands a large bag of pure white cocaine.
"Here's to a lot of success for everyone," he continued, placing the drugs back onto the coffee table of a dingy Los Angeles Airport hotel room and shaking hands with the three other men in the room. He thought that handshake was going to earn him a $24 million windfall, but little did he know that he'd just implicated himself in an FBI sting operation, and just moments later he would be cuffed, put in the back of a police car and charged with drug-trafficking.
So how did it ever come to this? How did John DeLorean, a playboy millionaire who made one of the most iconic sportscars in motoring history, fall on such hard times that he ended up resorting to dodgy deals in airport hotel rooms? This is the story of the incredible rise and fall of John DeLorean.
The early years
Born on January 6th, 1925, in Detroit to a Romanian immigrant father, Zachary, and a Hungarian immigrant mother, Kathryn, DeLorean had a humble upbringing, with neither of his parents able to find highly paid jobs due to their poor English skills. However, DeLorean was a bright child and did well in his studies, showing a particular interest in both engineering and music and earning himself a scholarship at Lawrence Institute of Technology - a small college that had a reputation for producing some of the motoring industry's best engineers. While the Second World War interrupted his studies (in 1943 DeLorean was drafted for military service, serving three years in the US Army and receiving an honorable discharge), DeLorean managed to return to collage, complete his industrial engineering degree and get a post-graduate job with Chrysler.
After a successful first year in full-time work with Chrysler, DeLorean was soon headhunted by Packard Motor Company, who tasked him with turning the business around as it struggled to adapt to a changing post-war market. And sure enough, after four years at Packard, during which he came up with a range of improvements for the company's existing models, including developing a brand new 'Twin-Ultramatic' transmission system, he was promoted to the lofty position of Head of Research and Development.
Such was his success at Packard, DeLorean was soon attracting more suitors from rival companies, and in 1956 he accepted a job at General Motors, who offered him a role in his choice of five divisions of the company. He chose to work at Pontiac as assistant to the chief engineer and general manager, and soon put his unique stamp on the company, producing dozens of patented innovations including wide-track wheels, the lane-change turn signal and articulated windscreen wipers.
While his small-scale innovations were gaining him notoriety within the company, what DeLorean really craved was a shot at designing a car completely of his own, and in 1963 he got his wish, as he was put in charge of designing a high-performance car that would move the brand in a new direction. And, boy, did he grab it with both hands, as he came up with the Pontiac GTO - widely regarded as the first ever muscle car.The car launched in '64, seeing strong sales that only got stronger, as the marketing for the car - also overseen by DeLorean - convinced America that it needed high-powered muscle in its autos. The GTO was such a success that DeLorean was promoted to head of the entire Pontiac division as a result, which, at the age of 40, broke the record for GM's youngest division head.
At this point in his career, everything DeLorean touched turned to gold. In five successful years as head of Pontiac, he developed the iconic Firebird and Grand Prix models, turning the division into a profit-making machine even though GM as a whole was seeing a decline in revenue. So, hoping to spread DeLorean's golden throughout the company, in 1969 GM promoted Delorean again, this time to head up the flagship Chevrolet division.
Suddenly this once-humble boy from Detroit, who started at GM with a $16,000 salary, was now earning $200,000 a year with an additional $400,000 annual bonus. Embracing his newfound wealth, DeLorean made a lavish investment into the New York Yankees, and would often be seen with celebrities coming out of exclusive nightclubs and restaurants.
Having revamped the Camaro and overseen a massive growth in sales during his first couple of years at Chevrolet, DeLorean was the golden boy of GM. However, for a company with traditionally conservative values, the way in which he conducted himself - flashing his cash around town at fancy parties and showing up to work wearing his trademark sideburns and unbuttoned shirts, rather than the corporate suits everyone else was wearing - was starting to jar with upper management. His results spoke for themselves, but by 1973, even though he'd since been promoted yet again to head up the cars and trucks division for the whole of GM, relations between him and some of the company's more conservative executives were becoming untenable, and on April 2 that year, he decided to leave the company, announcing to the press, "I want to do things in the social area. I have to do them, and unfortunately the nature of our business just didn't permit me to do as much as I wanted."
The DeLorean Motor Company
After leaving GM in such good shape, DeLorean's stock was so high that he could have walked into a top position at any major automotive company in America. However, sick of dealing with company bureaucracy and supremely confident that he could do better than the old American marques, DeLorean decided instead to strike out on his own.
And so, in 1973, the DeLorean Motor Company was formed. Determined to do things his own way, DeLorean immediately set about designing a car the likes of which had never been seen before. Featuring an innovative fibre-glass chassis, brushed stainless steel body and eye-catching gull-wing doors, the DMC-12, or simply "the DeLoren", was the sportscar of the future.
The concept was great - a safe, reliable, affordable and high-performance sportscar that would be available to the masses. But there was just one problem: despite his high earnings, DeLorean didn't have anywhere near the capital required so get such an ambitious project off the ground. So, to raise the funds, he turned to the unlikely source of Northern Ireland, securing an investment to the tune of around $150 million, in return for his company making the car there, providing 2,000 much-needed jobs at a time when the country was in the grip of a bitter sectarian conflict, devastating the local economy.After raising a further $25 million from his Hollywood celebrity friends, including the likes of Johnny Carson and Sammy Davis Jr, the Irish factory was built, and despite engineering issues and going way over budget, finally, in 1981, a full eight years after he formed the company, the first DMC-12 rolled off the production lines.
By that time, the 1980 US economic recession had hit the car market badly, and despite much fanfare and the typically exuberant marketing style of DeLorean, on its arrival in the US, the DMC-12 did not sell at all well. Ironically, perhaps its main rival, the Chevrolet Corvette, managed solid sales figures during this testing period, mainly due to the fact that it boasted a more powerful engine and came in at a lower price than the DMC.
By the summer of '82, with more than half of the 9,000 or so DMCs produced remaining unsold, and the company's debts standing at $175 million and spiraling out of control, DeLorean, who had dreamt of creating the sportscar of the future, was now backed into a corner, desperate for a way to save his struggling company.
If there was one thing DeLorean valued over all else, it was his company, so when he received a phone call from James Hoffman, a convicted felon-turned FBI informant, claiming that he knew a way to save DeLorean's business, it was his desire for success that over-rid his instinct that things may not have been as they seemed.
Claiming to be in touch with some serious drug-smugglers, Hoffman convinced DeLorean that if he traded some of his company stock to fund seed money for a small investment to procure a deal, he could be in line for a $24 million windfall, with the prospect of making much, much more over time. After a few months of negotiations and plenty of convincing from Hoffman that everything would go to plan, on October 19, 1982, DeLoren found himself in a Los Angeles airport hotel room examining 25 kilograms of cocaine in the presence of three men who he thought were drug-traffickers but later turned out to federal agents.
The great John DeLorean had been busted, and even though the case was eventually thrown out of court when the judge ruled that the FBI had entrapped DeLorean, his career in the automobile industry was all but over. After all, as he famously said when leaving court after the 'not guilty' verdict: "Would you buy a used car from me?"
With DeLorean's reputation in tatters and his company dissolved, the DMC-12 looked ready to be cosigned to the scrapheap - a beautifully designed car that would be forgotten as a victim of circumstance. But there was one more twist in the tale of the DeLorean, when Back to the Future director Robert Zemeckis decided that instead of his original idea of a fridge or a washing machine, the DMC would make the perfect time machine.
So despite a tragic existence marred by poor sales, civil wars and drugs-trafficking, that glorious final swansong in 1985 would ensure that the beautiful DeLorean DMC-12 would forever be immortalised as the world's favourite time machine.