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 DeLorean DMC-12 sports car featuring gull-wing doors – and for its brief and turbulent history, ending in receivership and bankruptcy 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.
The DeLorean DMC-12 shot to worldwide fame in the Back to the Future movie trilogy as the car transformed into a time machine by eccentric scientist Doctor Emmett L. Brown, although the company had ceased to exist before the first movie was made.
Texas entrepreneur Stephen Wynne started a separate company using the "DeLorean Motor Company" name after acquiring the remaining parts inventory 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 and enthusiasts of DeLorean cars.
John DeLorean founded the DeLorean Motor Company in Detroit, Michigan 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 executive. Investment capital came primarily from the formation of partnerships and private investment from select parties, including The Tonight Show host Johnny Carson and entertainers Roy Clark and Sammy Davis, Jr.. Further funds were also raised 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. In many instances, as well, To gain many governments and economic development groups where unemployment was particularly high sought out the DeLorean project by offering incentives in the form of grants, loans and tax abatements.
One candidate was the Republic of Ireland, although the country's then Minister for Industry and Commerce, Desmond O'Malley decided not to support the project. A deal in Puerto Rico was about to be agreed when DeLorean took up a last-minute offer from the Northern Ireland's Industrial Development Agency (NIDA). The British government was very keen to create jobs in Northern Ireland to reduce sectarian violence by reducing unemployment.
In October 1978, construction of the 6-building, 660,000 square foot (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 Company, Ltd.), the facility was located in Dunmurry, near Belfast. It was situated on an interface between two communities with differing religious predominations; Twinbrook (Catholic), and Dunmurry (Protestant). The facility had separate entrances for each side, but this was more of a geographic convenience than it was for religious segregation.
Unit production was scheduled to begin in 1980, but engineering delays and budget overruns caused the assembly lines to start 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 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, New Jersey and Michigan where some of the quality issues were to be addressed and resolved before delivery to dealerships. Some of the issues related to the fitting of body panels, higher-output alternators, and gullwing door adjustments. By 1982, improvements in components and the more experienced workforce meant that production quality was vastly improved.
The combined efforts of quality assurance improvements at the factory and the post-production quality assurance done at the QACs were generally successful, although workmanship complaints would still occasionally arise; the 1981 DeLoreans were delivered with a 12 month, 12,000-mile (19,000 km) warranty, common for the era. Disputes between dealerships and customers arose later because many dealerships refused to do warranty work because they were not reimbursed as the financial problems of the original company grew. This, in turn, led to th growth of the independent DeLorean specialist service centers.
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 DeLorean Motor Company 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 SEC 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 FBI, the DEA, 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 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. The DeLorean Motor Company filed for bankruptcy protection 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, and the dream with which he had of industry rising out of the ashes of Northern Ireland's sectarian conflict, 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.
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 approximately 9,200 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 the DeLorean Motor Company to provide parts and service, and most of those are still in existence. In particular, DeLorean Motor Company of Texas (entirely new ownership which acquired the original company's name and some of the logos) now owns the large remaining original parts stock from the factory, US stock and original suppliers.
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 personally declared bankruptcy in September 1999 and was evicted from his 434-acre (1.76 km2) estate in New Jersey in March 2000. He died on March 19th 2005, of stroke complications at age 80.