DeLorean Motor
The DeLorean Motor Company (DMC) was an automobile manufacturer formed by automobile industry executive John DeLorean on October 1975 in Detroit, Michigan. He also known as a former General Motor executive, capable engineer and business innovator. In 197, DeLorean stunned the industry when he resigned and set up his own automobile company. The business of DMC automobile called an ‘ethical sports car’. It was the only one model that produced, the stainless steel DeLorean sports car featuring gull-wing doors. The DeLorean Company-12 shocked the world in the Back to the Future movie trilogy as the model of car made into time machine.
DeLorean approach the local or national government and economic organizations for lucrative incentives to pay the constructing the factory’s facilities. In 1978, he decided to build his first factory in Northern Ireland, where the rate of unemployment was high and the government was offered manufacturing incentives. The British government was offered to give about $120 Million of its $200 Million for DeLorean to build his factory. To lessen the violences by reducing the unemployment, the British Government was interested to create jobs in Northern Ireland. As part of it, DeLorean was apparently thought that the British Government would provide his company with Export Credit financing. This would provide a loan of 80% of the whole cost delivery for shipping and the vehicles.
At the time, Delorean needed $85 Million for setting up the production from the British government. DeLorean concluded that labour relation in the Irish Republic might risking the project. He alerted the British to competitive interest into his car production. He want the British make quick decision on backing the project or the opportunity will lose. Desperate to reduce unemployment and had only days to close the deal, the British government agreed to give the fund $100 Million to cover it. As the returned, DeLorean guaranteed to employ the workforce of 2,000 within five years after the start of production.
Construction work on the factory began in October 1978, John DeLorean made an agreement with Lotus Cars, which produced the similar cars. In August 1980, deLorean received additional loan of $20 Million for production began. Although production was schedules to start in 1979. The factory did not begin the production until January 1981 due to engineering delays and budget overruns. Then, the production begin in 1981, the unemployment rate was high and the locals came to apply for jobs at the company. The workers were not have an experience because many of them never had jobs before joining the company. That mean the quality of the finished cars was below the standard. The retailers soon found that they have to spend money to correct faults before the selling of cars.
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. In 1982, the improvements in components and many experienced workers make the production quality had improved. The combined efforts of quality assurance improvements at the factory and the post-production quality assurance done at the QACs were successful, but the workmanship complaints still arise. Many of dealerships refused to do warranty work because they were not paid and the quarrel between dealerships and customers arise later.
By the end of January 1982, the workforces at the Northern Ireland was over 2600.. This meant a large jump in labour costs. At 8300 Delorean cars had been produced and fewer than half of the 7400 cars shipped to America had been sold by retailers. At the same time, Delorean incident to partially justify approaching the British government for more money. The government immediately commissioned one of London’s leading accounting firms to analyse the finances of DeLorean ‘s company. Then, the answer come back recommending no more public money be invested to DeLorean. Due to that, production was reduced to one shift and the workforce was cut by half. And also drastically reduced production exceeded sales.
By the end of May 1982, production of the DeLorean cars had halted. The workforces in DMC has been dismissed. The machine tools that had been installed in the factory amid such high hopes were auctioned off. The British government as the major shareholder seized the body dais and had them destroyed. This ensured that no more DeLorean cars would ever build. All that left was the factory shell. Reactions from former DeLorean workers were mixed. In October 1982, DeLorean was filmed appearing to accept money to take part in drug trafficking and became target of the FBI. He was charged with conspiring to smuggle $24 Million worth of cocaine into the US. Then, the jury would find that he was not guilty because he had been entrapped. But in 1985, he was back in court because a number of chargers relating to his financing of company’s money. He was acquitted in 1986, it was too late to save the cars. The cars that been produced was only 9,000. The expensive cost production, unfavourable exchanges rates and less of consumer interest shows that the DeLorean Motor Company was declared bankrupt.
