- DeLorean: The Rise and Fall of a Dream-Maker by Ivan Fallon and James Srodes
Hamish Hamilton, 418 pp, £8.95, July 1983, ISBN 0 241 11087 4
Among phrases that stay in the mind, a chairman of Rolls-Royce saying: ‘We don’t make cars, we’re not part of the motor industry. We’re in the toy business, making toys for big boys.’ John DeLorean intended to do the same: to build a sports car of polished steel for, as he put it, ‘the horny bachelor who’s made it’. But the toy market is demanding and capricious and the car failed to please. The Belfast factory making it had no sooner opened than it closed with the loss of 2500 jobs and £85 million of British government money. Such are the bones of a bizarre and discreditable story. The authors, both financial journalists of repute and long standing, place the discredit on John DeLorean. I think they are unfair. Not because DeLorean emerges as likeable. He lacked, as they say, the gift of friendship – although his third and most beautiful wife has been loyal to the last. But unfair because he could not have embarked on five years of self-indulgence and self-destruction, ending in charges of drug trafficking, if he had not been bankrolled by the British Government and in particular by the Labour Secretary of State for Northern Ireland, Roy Mason. Mason put up the loan that brought the factory to Belfast. He gets off lightly.
Granted that within the year Labour was out of office and Mrs Thatcher in with new ministers who could have had a new look at the project and the man behind it. But anyone who has watched government-financed projects stagger from crisis to crisis like drunkards to a lamp-post knows that, once started, they acquire a certain unstoppability. Common sense may say that they should be stopped, but nothing short of a fiasco will make that politically possible. It was fervently hoped in parts of Whitehall that the Concorde airliner would develop a technical fault somewhere along the line so that it could be declared unsafe. It didn’t, so the project went on. Likewise John DeLorean: until January 1982, he bore a charmed life. Not until then did the Government, in the person of Northern Ireland Secretary Jim Prior, feel able to call his bluff.
DeLorean was the son of an immigrant French millwright who qualified as an engineer but began his working life as an insurance salesman and a successful one – all his life he was to retain a salesman’s gift of the gab. Left insurance and went into cars – Chrysler, Packard, Pontiac, always as an engineer. He was made general manager first of Pontiac and then of Chevrolet, making more than three million cars a year. It began to emerge that while the increasingly stylish DeLorean was an exceptional engineer and an effective salesman, he wasn’t so hot as a manager, neither in administration nor in handling men. John himself thought otherwise and was making his personal pitch to become president of General Motors. The management of General Motors, like the management of most multinationals, is as grey and snufflingly set in its ways as a badger. And as savage when at bay. Glamorous gadfly DeLorean was asked to go and in 1973 he went, with a big handshake, a great reputation, but no future.
From 1973 to 1978, he tried to put flesh on a project that had been turning in his mind since Pontiac days: for a sports car that would fall midway between cheap’n cheerful little foreign imports and works of art like the Lamborghini. It was not so unrealistic. Sir William Lyons founded the Jaguar car company on such a dream in the Thirties and the dream survived both World War Two and the increasingly sporty performance of the staid family saloon. Hard-nosed American dealers were prepared to pay $25,000 for a DeLorean agency, sight unseen. Wall Street produced $3.5 million to back the DeLorean company when it consisted of not much more than a dozen people. One was the car’s designer, Bill Collins, also from General Motors.
That was the easy part. Putting a car into production would need twenty times as much money and the obvious – indeed, probably the only sources for that were going to be the regional investment grants offered by national and local government. The search led John DeLorean from Pennsylvania to Puerto Rico, promoting his car all the while. One of his speeches caught the attention of a scout for the Dublin Government and there followed a series of initially promising negotiations for a factory in the South of Ireland. However, Dublin’s finely tuned ear for blarney led to a decision to show DeLorean the door. He asked for too much and offered to put too little towards the project – nothing at all if he could help it. These are bad signs: Dublin saw and interpreted them correctly.
Then Northern Ireland stepped into the breach. The authors detail the growing misgivings of some, but by no means all, of the Northern Ireland negotiators who dealt with DeLorean. Here, however, was an American of starry reputation offering to create several thousand jobs. Most multinationals attracted to Northern Ireland are capital-intensive, employing few people. John DeLorean was offering assembly-line jobs that would provide work for semi-skilled men. As he pressed for more and more favourable contract terms, the authors repeat a devastating story of how the Northern Ireland Secretary Roy Mason was called briefly from a not enormously important dinner to hear about the contentious contract. ‘For Christ-sake sign it,’ he said.
From that point in 1978 to the showdown in 1982 John DeLorean had the Northern Ireland officials over a barrel – as he told his friends. How he used the £85 million he got from Roy Mason and from subsequent Tory ministers is a matter of conjecture which forms the core of this book. Tory Northern Ireland Secretary Humphrey Atkins and his junior, Adam Butler, were both a soft touch and so, for a while, was Jim Prior. The reason I feel the authors are too hard on John DeLorean himself is that his behaviour was not unusual. Men who create companies often treat the company’s assets as their personal property. They are cavalier about book-keeping; they often indulge in lavish offices and run to works of art; they have tantrums when asked to account for what they’ve spent. It is the job of the company’s bankers to see this does not get out of hand; to ask about tax havens and Swiss companies and insist on an answer. Such questions were asked of DeLorean; the civil servants dealing with him were neither blind nor gullible. But they let him get away without answering. And so helped him to ruin.
He had more than money to worry about. Colin Chapman, the late, great Colin Chapman of Lotus racing cars, the one man John DeLorean respected, had looked over Bill Collins’s prototype, driven it and pronounced it dreadful. Perhaps because of their financial background, the authors do not treat this as the shock it undoubtedly was, John DeLorean had promised the Northern Ireland Government and the American dealers a car within eighteen months. He knew the development work would have to be contracted out, he had no organisation of his own to do it. He can’t have bargained on a virtual re-design, which in the end was what the Lotus engineers performed. A car can’t be designed and put into production within eighteen months and the project’s subsequent troubles all stemmed from this. The contract was struck between Colin Chapman and John DeLorean in secret, in Switzerland, and its vehicle was an offshore subsidiary created specially for the purpose, whose existence was known to hardly anyone else. Nearly $18 million went through that company – where, or to whom, is a mystery. It may have been Colin Chapman’s personal commission. If so, it was a big one. And if it wasn’t, who got it? This is just one of the DeLorean financial loose ends.
The Lotus contract had two results. Colin Chapman’s engineers changed the engine, changed the chassis, changed practically everything but the Italian-designed steel shell. And this broke the morale of the original DeLoream team which had once contained a rernarikable line-up of American motor talent. Executives left and DeLorean’s personal wrath pursued them. There were three finance officers in five years. But, what was worse, a gulf opened up between the sort of car Lotus was designing and the sort of car the Belfast factory had been laid out to build. This is where the company began to feel DeLorean’s lack of management skill. An engineer of his experience must have known at a glance that unskilled Belfast labour was going to make a dog’s dinner of the Lotus design, and that is what happened. The cars came off the line on schedule to initial whoops of enthusiasm. Then they began to break up (or down). Unsold cars accumulated while DeLorean stepped up his demand for more money from the British Government. Instead, Jim Prior put in the receiver. The receiver came up with a salvage package that required John DeLorean to raise just $20 million and the City would do the rest. He tried to raise the money by trafficking in cocaine. That, anyway, is what is alleged in the American court case against him, backed by the evidence of videotapes.
What do you think would have happened if the car had been a success, or if it had sold even modestly? I suspect that John DeLorean would still be lording it in his Park Avenue penthouse office with the telescope and the magnificent view. A trickle of royalties would be coming through to the Northern Ireland exchequer, enough to silence the civil servants. There would be an active lobby to give the DeLorean company another great cash injection so that it could build a sedan version of the sports car. The convoluted financial reorganisation that the authors describe in horrid detail would have become a fact and John DeLorean would not only be behaving like a very rich man – he would be one. And he would still have the British government over a barrel.
Books like this are not easy to write. The piecing together of the story has taken years and there are still loose ends. There are also gaps that suggest a lawyer’s blue pencil – although, considering that John DeLorean had at times retained the formidable Lord Goodman to defend his reputation, it is remarkable what the lawyers have let through. A jigsaw – and this is a jigsaw – is never going to be a work of art, but this is an exciting read, full of sex, drugs, high life, financial juggling, purloined papers, moles, the Secretary-No-One-Would-Believe, and final tragedy, personal and national.
There is no reason why it should not happen again. John DeLorean was a big, handsome, clever, charming bully with a gift of the gab, but he was no superman. Just an ordinarily ambitious engineer. General Motors got his measure and eased him out. Dublin civil servants got his measure and would not let him in. Belfast needed his wofk and his prestige, so perhaps the men in Northern Ireland could not be so choosey. Let us give them, and Roy Mason, the benefit of that doubt, for indeed they suspected they were handling something of a rogue elephant. And yet we’re entitled to feel it should have been possible to pin John DeLorean down, for London was providing all the money. He was not going to walk out on them. There should have been someone somewhere who spoke his language and had his measure.
When governments put money into private ventures, they know, if they are honest with themselves, that the project has less than a fifty per cent chance of success – because, with even a fifty-fifty chance, private capital would have backed it. Political expediency may dictate that you accept the risk, but it is unforgivable then not to take elementary precautions to protect the investment. Or am I the naive one? Have we grown so cynical that civil servants handling government aid know that good money will inevitably follow bad almost in perpetuity if only to save jobs and avoid scandals. I have already quoted a Rolls-Royce chairman. Rolls-Royce believed that once a contract was signed with the company, no government would pull the rug away, John DeLorean thought the same. They were both wrong, as it turned out. But oh, the mess of broken eggs they left.