The DeLorean Motor Company, the United States distribution company for the sportscar of the same name, filed today for reorganization under Chapter 11 of the Federal Bankruptcy Act.
The American company has sole distribution rights to the cars, which were made in Northern Ireland until recently by the company's production arm, DeLorean Motor Cars Ltd.
The production company itself has been in receivership for eight months, and was formally closed last week.
The six-page Chapter 11 petition, filed in United States Bankruptcy Court in Detroit, lists major 15 unsecured creditors, Detroit attorney Lawrence K. Snider said. He said there were ''definitely hundreds'' of other creditors.
The company's founder, former General Motors Corporation vice president John Z. DeLorean, was arrested Oct. 19 in Los Angeles on drug trafficking charges, hours after the British Government announced that it was closing his Northern Ireland manufacturing plant.
Among the 15 creditors listed in the petition were Arthur Andersen & Co., Chemical Bank and Prudential Insurance of America. Mr. Snider, an attorney with Jaffe, Snider, Raitt & Heuer, said that three actions had precipitated the filing. The first was that on Friday, Eugene A. Cafiero, who had been president of DeLorean Motor Company, was granted an order prohibiting the company from transferring any of its assets. ''That meant, in effect, they couldn't sell a car,'' Mr. Snider said.
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The second problem, Mr. Snider said, was that Audio Systems Inc., one of DeLorean's creditors, had scheduled a court hearing for Monday afternoon, also seeking a restraining order.
According to Mr. Snider, the third problem was that two Ohio companies that had financed DeLorean inventories allegedly claimed that the American distributor had defaulted on its agreement and were planning to take possession of hundreds of cars.
John Zachary DeLorean was indisputably a brilliant engineer. A flamboyant, aggressive business executive who burst out of the staid, yes-men culture of the 1950s, he would prove to be an early model of the modern American visionary—think Jobs, Bezos, Zuckerberg—who discarded convention in pursuit of a singular vision. In his case, that meant trying to create the greatest sports car the world had ever seen.
He also was accused of being a thief, a fraud, an embezzler and a brazen con man who fooled everyone he ever did business with, from celebrities to superpowers, bilking them out of millions of dollars in the process. DeLorean’s longtime attorney and staunch personal advocate Howard Weitzman told the Los Angeles Times after the carmaker’s death in 2005 that “John DeLorean had one of the most warped views of right and wrong” he had ever come across.
So how did the man behind America’s first muscle car become a figure with such a tortured legacy? Because much like the car he’s most famous for—the DMC-12, a cultural icon thanks to its featured role in the “Back to the Future” movies—he’s both celebrated for his sleek fantasy vision of the future, and widely mocked for his spectacular, and sordid, failures.
The Early Years
The son of immigrant factory workers, John Zachary DeLorean was born on January 6, 1925, and grew up in a primarily working-class neighborhood on the east side of Detroit. His father, Zachary, was a union organizer and foundry worker at the Ford Motor Company. Drivetribe, an online community platform for auto enthusiasts, reported that his “poor English and problems with alcohol prevented him from ever progressing beyond the factory floor.”
Back-to-the-Future
The DeLorean and its iconic cameo in “Back to the Future.” ALLSTAR PICTURE LIBRARY / ALAMY
John’s mother, Kathryn, worked for General Electric and tried to keep things together at home. Hemmings Daily reported that when things got particularly rough, she would whisk the boys away to her sister’s home in Los Angeles. It has been speculated that John developed a love for the California lifestyle during these escapes.
His education was interrupted by World War II (he served in the Army), but he eventually earned a master’s in automotive engineering and, later, an M.B.A. from the University of Michigan. He officially began his automotive career in 1952, joining the research and development team at the Packard Motor Car Company. Before long, he became a rising star in the company—and in the industry.
In 1956, DeLorean took a position at General Motors as an engineer at the Pontiac division. At the time, GM was the biggest company in the world and the place to be, but Pontiac struggled with its brand identity and wasn’t connecting with America’s youth—suddenly a huge new consumer force driving the country’s emerging car culture. Pontiac seemed to make only stuffy cars for older adults.
Pontiac was “really in trouble,” says J. Patrick Wright, author of On A Clear Day You Can See General Motors, the bestselling tell-all book about the auto giant. It was “like an old person’s division.”
1964-Pontiac-GTO
A 1964 Pontiac GTO. NEWSCOM
“When DeLorean left,” he says, it “had become the third-best nameplate in the auto industry, right behind Chevy and Ford.”
While other GM executives focused on building stately automobiles that seemed to float down the street on a cloud, DeLorean had different plans. He wanted to replace those sedate rides with sportier vehicles, machines that embraced a youth culture more interested in going fast than being cozy. When Pete Estes took over the reins of Pontiac in 1961 and DeLorean was named the division’s chief engineer, he seized the opportunity by having his engineering team throw a big, 389-cubic-inch V8 engine from the full-size Pontiac Bonneville into the midsize Pontiac Tempest. The result was a maneuverable but brawny car with a racing-friendly surplus of power and torque.
DeLorean called it the Pontiac Tempest LeMans GTO, and it created a new category of automobile that would come to be known as the muscle car.
But GM had a strict mandate prohibiting its engineers from sticking big engines in smaller cars to make them go fast. So the top executives at GM would never have approved the GTO as conceived. As captured in Framing John DeLorean, a new film directed by Don Argott and Sheena Joyce and told in a documentary style with dramatic reenactments starring Alec Baldwin as DeLorean and a supporting cast of top Hollywood character actors, the engineer came up with a loophole—with Estes’ approval, of course—to justify the high-performance aspect of the car. Instead of selling the car as a stand-alone model, the larger engine would be offered as a $295 option package on the 1964 Tempest. GTO-equipped coupes started at $2,852; convertibles started at $3,081.
The GTO package was an instant hit. Orders poured in. GM went on to sell 32,450 GTOs in its first year in production.
1967-Pontiac-Firebird
The 1967 Pontiac Firebird. PAT MCNULTY / ALAMY
For this blatant act of defiance, DeLorean was handsomely rewarded, leapfrogging in 1965 ahead of several promising engineers with more seniority to become the youngest general manager of Pontiac at age 40. Four years later, he was named the youngest manager of Chevrolet, and in 1972 he was made the head of GM’s North American car and truck operations.
Not only was DeLorean a great engineer, he cultivated a talent for marketing as well. He understood something other auto industry executives hadn’t yet grasped: Automobiles were just as much about style as they were about nuts and bolts. “None of these guys were paying attention to the fashion side,” Wright says. After DeLorean gave us the Firebird, his reputation took flight well beyond Detroit.
Before the GTO, DeLorean’s lifestyle had conformed to GM’s image of an executive: He kept his hair short and clean, wore conservative three-piece suits, was married and attended the right social functions. That all changed after the muscle car was born. Now he was a rock star—making the money of one and living the lifestyle. He started working out and wearing trendy clothes, and in 1968 he divorced his first wife, Elizabeth Higgins, after 14 years of marriage, to spend more time on the West Coast. There, he hobnobbed with Hollywood’s elite and dated models and actresses like Ursula Andress, Joey Heatherton and Tina Sinatra.
This new DeLorean was brash, even more arrogant and turned his nose up at GM’s elite—and they had a love-hate relationship with him because of it. He was successful for “not doing what they told him to do” and instead following his own instincts, Wright says. “The divisions were making money, and a lot of the profit ended up in the bonuses [of those executives] at the end of each year. They loved their bonuses” even as they grew to dislike DeLorean. It became a Catch-22 of greed.
In 1969, DeLorean married actress Kelly Harmon, the sister of actor Mark Harmon (of NCIS fame) and the daughter of Tom Harmon, a college-football legend, war hero and sportscaster. Kelly was 20. He was 44. The couple adopted a son, Zachary, but continued to live a jet-set lifestyle, shunning the social scene in Detroit.
“Even at $650,000 a year, if the job is not satisfying, you do something else,”—John DeLorean, after leaving GM.
If his lifestyle hadn’t rankled his colleagues already, his push for significant changes at GM—such as abandoning big cars in favor of smaller, more fuel-efficient vehicles—was sacrilegious.
But by the spring of 1973, it all changed. Harmon and DeLorean had divorced. Then came the infamous Greenbrier presentation. DeLorean was set to give a confidential speech to 700 top GM executives at the triannual Greenbrier Hotel GM management conference in West Virginia. Topic: How the poor quality of cars they were producing was hurting GM’s bottom line. The speech was very critical. His staff insisted he tone it down, which he did—but an unedited copy of the presentation mysteriously leaked and was published by the Detroit News. Both his supporters and his detractors at GM turned on him. DeLorean resigned in April 1973.
Six months later he told the New York Times that “he didn’t want the job anyway because a top management post at GM consists of sitting in meetings all day. Even at $650,000 a year, if the job is not satisfying, you do something else,” he said.
The DeLorean Era
Five weeks later, the flamboyant automaker had already began a new life, one free from the shackles of Detroit. He married supermodel Cristina Ferrare in a private ceremony in Los Angeles, and they promptly set up house in New York City. She was 23. He was 48. DeLorean also started working on plans to form a car company.
The DeLorean Motor Company was officially founded on October 24, 1975, in Detroit. The plan was to build what DeLorean called an “ethical car,” a car that was safe, long-lasting and sustainable. “He envisioned a car that would be the best of everything,” says Jordan Livingston, a documentary filmmaker finishing a project on the automaker entitled Living the Dream. “He wanted the best style, he wanted the [least] environmental impact, he wanted the best value for the customer, and he also wanted the best safety.”
1981-DeLorean
The DMC-12. MOTORING PICTURE LIBRARY / ALAMY
Within two years, the company had created a mid-engine prototype to draw investors. Bill Collins, a former colleague at Pontiac who was a key player in the creation of the GTO, engineered a first prototype for what would become the DMC-12. But DeLorean brought Colin Chapman, the charismatic, flashy founder of Lotus Cars, to reengineer the chassis and suspension. Collins was soon summarily dispatched.
And yet the car’s design drew backers. The coupe’s iconic look was created by Giorgetto Giugiaro, the Italian designer and founder of ItalDesign who was behind such classics as the Alfa Romeo Iguana concept car, the Lotus Esprit, the Ferrari 250 GT SWB Bertone, the Techrules Ren and many others. He based the DeLorean on a 1970 concept car he had drawn up for Porsche, which was similarly wedge-shaped and, most importantly, featured a stainless-steel body with gull-wing doors. Its power came from a rear-mounted Peugeot-Renault-Volvo 2.85 liter V6 engine that produced 130 horsepower.
Funding Follies
Seed capital came quickly, as DeLorean took a Bank of America loan and turned to entertainers—like Tonight Show host Johnny Carson, Roy Clark and Sammy Davis Jr.—for additional investors. He also raised money through a program that gave dealerships selling DeLorean’s cars shares in the company. DeLorean went looking for government development funds to build a factory.
Critics were thrilled with how the car looked. But the car was underpowered, offered so-so handling, and was neither as groundbreakingly safe nor fuel-efficient.
In February 1978, Business Week reported that the company had been “flirting with Canada, Spain, Pennsylvania, Ohio and most recently his home town, Detroit.” But after inking a preliminary agreement with the U.S. Department of Commerce and the government of Puerto Rico to build a factory on a former Air Force base, DeLorean received a better offer from the British government to build a factory in Northern Ireland, on a cow pasture in Dunmurry, just outside Belfast, right in the heart of the bloody conflict between Ireland’s Catholic and Protestant communities.
Total investment: More than $1oo million in British government loans and loan guarantees, and tens of million from private investors. Everything seemed to be in place.
Except: All that money would disappear, very fast.
“The biggest problem we had was that the first business plan that was developed once the project had come to Northern Ireland made it quite clear we’re going to run out of money the day we produced the first car,” says Barrie Wills, author of John Z, the Delorean, and Me: Tales from an Insider, who was DMC’s director of purchasing and supply at the time and then its final CEO. “We always knew that. And that’s why we were constantly under pressure to try and persuade the British government to give us just a bit more money. But that wasn’t forthcoming.”
Johnny-Carson-and-John-DeLorean
DMC investor Johnny Carson and John DeLorean. BETTY/RON-GALELLA/GETTY IMAGES
Seven months after breaking ground in Belfast, Margaret Thatcher’s Conservative party came to power in Britain. She did not approve of the deal the Labour Party had struck with the American. “She frowned upon any government investment in what she considered to be private industry,” Wills explains.
Then, in January 1981 the first wave of cars had quality-control issues, which led to bad press in the U.S. Critics were thrilled with how the car looked. But the car was underpowered, offered so-so handling, and was neither as groundbreakingly safe nor as fuel-efficient as DeLorean had promised it would be.
The money crisis grew. A plan emerged to restructure the company and take it public as the DeLorean Motors Holding Company. The proposed stock offering would have personally enriched DeLorean, the company’s majority stockholder, by around $120 million, but would have left anyone holding only “options”— like the car dealers who had joined the dealer investor program—with next to nothing. It would be a particularly bad deal for Margaret Thatcher and the British government.
“Thatcher was outraged,” Livingston says, and she cut off any further investment in the American company, placing the Belfast plant in receivership. In the end, only 9,000 DMC-12s were built, approximately 6,000 of which were sold to consumers.
It Hits the Fan Belt
Even so, DeLorean assured DMC executives the money was on its way. Back then, Livingston says, the Irish in Belfast would believe anything DeLorean said. “When John DeLorean came to [inspect the troops], it might as well have been George Clooney or Brad Pitt visiting the factory floor,” Livingston says. “Here was this rock star with a supermodel on his arm. People were absolutely starstruck.”
To this day, many still consider the flawed auto exec to be a savior, no matter what he is said to have done. “Everybody—from the taxi drivers to bartenders to hotel clerks, everybody— has something to say about John DeLorean,” says Livingston, who recently attended a reunion of DMC workers and their families. “He left an incredible stamp on the community.”
John-DeLorean-arrested
John DeLorean under arrest. REED SAXON/AP
Why? Working at DMC was not only the first job for most, explains Livingston, but it was also one of the highest-paying and most meaningful jobs they’ve ever had: “He came in to a place that had almost 80% unemployment, created jobs, skilled jobs, jobs these people could be proud of.”
As for investors, Wills says, a group in the U.S. led by financier Jeanne Farnan was allegedly raising money for the company, and according to a report in the Washington Post, Farnan claimed to have located investors willing to put up $10 million as part of a financial package to rescue the firm shortly before government-appointed receivers planned to declare the DeLorean company defunct. She forwarded the final loan documents to DeLorean on the morning of October 19, 1982, the last day for the company to either obtain new financing or face liquidation
It was too good to be true. “It was money the receivers would have never accepted,” Wills says. According to the Washington Post, “Farnan is facing a criminal investigation by the FBI and the U.S. attorney’s office in Washington.” (Farnan eventually served five months on criminal contempt of court charges.) DeLorean never signed the papers, though. He apparently had another plan.
Wills went home after a long day at the office, had a meal and settled in for the night. He got a call around 8 p.m. from one of the company’s new British government overlords telling him to call the workforce together and close up the shop for good. It came as a shock. “We’d kept all the key people together in the hope that the company would be restructured, that the funds would be found, one way or the other, to bring it back to life again,” Wills says. He knew things were dire but didn’t understand the sudden rush.
Special-Agents-and-cocaine-
Special Agents and cocaine DOUG PIZAC/AP
He would come to understand it the following morning. He turned on the BBC and learned that DeLorean had been arrested in a videotaped sting by the FBI, during which he allegedly agreed to a scheme to sell 220 pounds of cocaine, worth an estimated $24 million, in the hope it would provide enough cash to keep his company afloat.
Wills had to face the workers after hearing the news. “There were grown men in tears,” he says. In less than 24 hours, the staff had gone from being told the money was on the way to seeing their boss—whom they adored, either in spite or because of his bravado—arrested on drug charges. A week later, DMC filed for bankruptcy.
During the trial that followed, DeLorean’s attorney, Howard Weitzman, argued that the FBI had been able to entrap the desperate automaker because they knew he would do anything to save his business. And the evidence suggested Weitzman had a point. According to multiple reports at the time, the deal was presented to DeLorean by a paid FBI informant. When DeLorean said he didn’t have the cash to pay for the drugs up front, the informant promised to arrange the financing as long as he would put up his company as collateral. And although he showed intent, he never took possession of the drugs.
It seems he never planned to pay for them either. The cocaine deal was yet another business venture into which DeLorean was not putting a dime of his own money. The government believed his agreement to hand over control of his company constituted proof of his willingness to participate. But DeLorean did not give them control of DeLorean Motor Cars Limited or the DeLorean Motor Company. Instead he agreed to provide them with control of DMC, Inc., a dormant shell company that had no assets. DeLorean was conning the con men. (And he may have been lucky they were fake; the Medellin Cartel, for example, might not have been very amused with the ruse.)
After less than 30 hours of deliberation, DeLorean was acquitted of all charges.
Just Getting Started
His legal woes, though, were only beginning, and he faced trials for embezzlement and fraud by federal prosecutors and an investigation by British authorities. He was never convicted. But accountants did recover almost a $100 million for the creditors of DeLorean Motor Company in civil court over the course of nearly two decades.
Most of that came from the accounting firm Arthur Andersen, which was found guilty of negligence and breach of contract in its audits of the defunct auto company. The firm was ordered by a New York state jury in March 1998 to pay $46.2 million to the motor company’s creditors and shareholders for delivering misleading audit opinions on the automaker in 1978 and 1979. They later settled for $27.2 million. An earlier, related lawsuit filed against the accounting firm by the British government was settled in 1997, with Arthur Andersen agreeing to pay an estimated $35 million..
Driven into bankruptcy, DeLorean had to sell his home in New Jersey, where his nearly 500-acre estate was eventually purchased by Donald Trump and converted into a Trump National Golf Club, which he frequently visits as president.
Along the way, DeLorean’s family also fell apart, as Ferrare left him after he was acquitted on the cocaine charges, taking her daughter, Kathryn, and Zachary with her. “There were definitely immediate effects,” says Zachary, who’s now 47. “I mean, how the hell couldn’t there be?”
DeLorean died on March 19, 2005, at Overlook Hospital in Summit, New Jersey, from complications after a stroke. He was 80 and had been living in a one-bedroom apartment in Bedminster with his fourth wife, Sally.
“On one hand, I feel proud of my father,” he says. “On the other hand. . . “—Zachary DeLorean
Today Zachary DeLorean no longer blames his father. “We all make decisions in life, and some of them are right and some of them are wrong,” he says. When asked about his father’s legacy, though, Zach is as divided as everyone else.
“On one hand, I feel proud of my father,” he says. “On the other hand, I just want to blow the f—-ing thing up.”
he DeLorean DMC-12 became and remained famous as the time-traveling car in the Back to the Future movies—but the actual automobile was infamous for years before Marty McFly stepped inside one in 1985. And, though the fiction is better remembered today, the real story of the DeLorean is just as dramatic.
First of all, DeLorean was a real person: John Z. DeLorean, who was breathlessly covered by the 1970s press as a renegade General Motors exec who bucked the corporate establishment and set off on his own, and then shared his remembrances of the automaker in a book. A few years later, however, it became clear that he wasn’t out of the auto game: In 1977, DeLorean said that he was hoping to go into business producing his own sports car. Though he estimated at the time that he could have the car ready by the next year, it wasn’t until Jan. 21, 1981—exactly 35 years ago—that the first DeLorean DMC-12 was produced.
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Months before the cars would be available, it was clear that DeLorean was going big: for the holiday season of 1980, the American Express catalog advertised a DeLorean plated in 24-karat gold going for $85,000 (versus $20,000—about $54,000 today—for the steel version).
“Shaped like a flying wedge, the DeLorean appears to exceed the 55-m.p.h. speed limit while standing still,” TIME noted. “It is expected to get 22 m.p.g., about the same as a diesel-powered 1981 Cadillac Brougham. Entry to its luxuriously appointed interior is through gull-wing doors that tilt up instead of swinging out. The 24-karat car will pose some special maintenance problems. Owners wishing to get any dents knocked out will probably have to return the damaged part to the factory, where the bumps will be pounded out and the piece refinished in gold.”
By October of 1980, seven people had put down a deposit on a golden DeLorean.
Though the 1980 car market wasn’t exactly solid gold, the lavish DeLorean style didn’t stop at the cars themselves. A 1983 book later charged that John DeLorean ran up expenses on the company’s dime even after it was clear the cars wouldn’t be a big hit. In April of 1981, he bought a new house in what was then one of the largest residential real-estate deals in New Jersey history. But by the time the company hit its first production anniversary, it was in trouble. In October of 1982, DeLorean closed—and John DeLorean was arrested and charged with trying to save his company by selling cocaine.
He was found not guilty—he had been entrapped, the jury said—but in 1985 he was back in court on a number of chargers relating to his handling of company money. He was acquitted in 1986, but it was too late for the car. Only about 9,000 of the cars were ever produced.
It’s still possible to buy a DeLorean. As collector’s items, a top-notch used early-’80s DMC-12 can go for nearly $50,000. But that first DeLorean is out of reach: it’s now held in the collection of the Western Reserve Historical Society in Cleveland.
Meeting the Great Man
In September 1978 I was ‘between jobs’, having resigned
at the end of February from the board of Reliant Motor
Company where I had been deputy managing director.
Reliant was then a 2,000 employee specialist vehicle
manufacturer based in Tamworth, Staffordshire, in the
UK. I had resigned in the wake of an unwelcome takeover
by a company called Nash Securities the previous year.
The board had attempted a management buyout and failed,
and the new owners and I proved incompatible.
The company was best known for the Scimitar GTE, the
world’s first sports estate car, beloved of Her Majesty the
Queen’s daughter, Princess Anne. Much later, the brand
was to become even better known for its three-wheeled
vehicles immortalised by the BBC’s TV comedy series,
Only Fools and Horses. Reliant produced 20,000 vehicles
a year, if one took into account their contract for the
Reliant developed Otosan Anadol car built by the Koc
Group in Turkey.
I had done the rounds of the executive search consultancies,
turned down one job offer, and for months been encouraged
by Lotus Cars to join them. Out of the blue, I received a
call from a man called Myron Stylianides. He told me he
was a vice president and director of personnel of the newly
created DeLorean Motor Cars Limited. I was invited to
meet his boss, John Z DeLorean, in Belfast.
After the first meeting on 11 October 1978, I was offered
the role of director of purchasing, which I turned down,
even though the job had great appeal. For several years,
I had been a student of DeLorean’s achievements as the
youngest ever vice-president of General Motors (GM)
and the creator of the Pontiac GTO, followed by his
resignation from GM. For the past months I had read about
his attempts to fund his car project and speculation on who
was to be his choice of managing director. My reason for
the rejection was a concern about moving my wife and two
young daughters to Northern Ireland during the height of
‘The Troubles’.
An improved offer followed over the phone, which I also
rejected. Next came an invitation from Myron to a second
meeting in Belfast on 16 October 1978, as John Z had
‘sorted out a solution’.
10 Early Days
Cristina DeLorean celebrating the groundbreaking ceremony
at the Dunmurry site on 2 October 1978
Press speculation in 1978 about former British Leyland and
Hyundai boss George Turnbull
The Second Meeting
This meeting took place at The Old Inn to the north of
Belfast in the village of Crawfordsburn - a location that
fitted Hollywood’s image of rural Ireland - with its stone
walled thatched cottages and narrow lanes. There, we had
lunch together - not just John Z and me - but with Mrs
DeLorean in company. At 28 years of age, Cristina Ferrare
was 25 years younger than John and a mere eight years
junior to me.
John Z’s solution was typical of the manner in which he
later addressed other contests he felt he needed to win.
Another increase in salary, of course. But he had not
finished. During the earlier visit, he had talked to me about
the prospect of his engineering department, headed by Bill
Collins - his long standing chief engineer - being located in
or around Coventry. That way, he felt he could draw upon
the wealth of engineering talent in what was then Britain’s
‘Motor City’.
DeLorean had learned that I had a good relationship with
Lotus. In common with their founder Colin Chapman’s
number two, Michael Kimberley, I had been a Jaguar
apprentice. John Z found out Kimberley had been trying
to hire me since I had left Reliant. He took me into his
confidence about Lotus - that his alternative plan was to
do a deal with them. He took a map of the British Isles
out of his pocket and with a twinkle in his eye, asked with
fake bewilderment, ‘Tell me, Barrie, where are Belfast,
Norfolk, and Coventry (my then home) on this map?’ I
showed him. ‘Ah, so Coventry is about half way between
Belfast and Lotus.’
Then - the piece de resistance! His solution to my dilemma
was to ask me to establish a DeLorean purchasing office
in Coventry and choose my own team from the Midlands
automotive industry. This decision turned out to be a
very sensible move that allowed the project to get off the
ground with a running start. The Old Inn in Crawfordsburn, Co Down, Northern Ireland
Charles Keith (Chuck) Bennington pictured at Dunmurry on
his first day as managing director on 26 October 1978
Barrie Wills’ view of the gathering
at Ketteringham Hall, Hethel,
November 1978. From left: Chuck
Bennington, Bill Collins, Colin
Chapman, John DeLorean, Fred
Bushell, Mike Kimberley
With Cristina staring deep into my eyes, I not surprisingly
crumbled and accepted the job on one condition: that
I should first meet the managing director designate, to
whom I was to report, before confirming acceptance.
Charles K Bennington
My MD-to-be, Charles Keith Bennington, and I hit it off
well at our first meeting on the very day the earth-movers
moved onto the Dunmurry ‘cow patch’. I asked Charles
what I should call him and he gave me a choice - CK,
Charles or Chuck. I chose Chuck. We both started work on
26 October 1978.
The fair-haired, bearded Charles Bennington reminded
me initially of Kirk Douglas playing the part of a swarthy
Viking chieftain, wearing a black roll-neck sweater and a
tweed jacket. He quickly became Chuck not only to me
but to the other departmental directors, CK to others. He
was for ever Mr Bennington to the secretaries and other
female staff, who were always formal and respectful when
addressing the directors. All a little old fashioned, in the
nicest of ways, with no hint of the Germaine Greer-style
feminism that was increasing its influence on society
at that time. This custom was only one of a number of
delightful examples of the natural courtesy of Ulster
folk at work. No one was instructed how to address the
‘bosses’, the formalities just seemed to come naturally to
people, particularly the ladies.
The GPD Contract(s) - Act 1
On 9 November 1978, John Z summoned Chuck;
the classically dressed, cigar smoking Dick Brown -
DeLorean’s vice president sales and marketing based in
Garden Grove, Orange County, California; the ultra serious
Buck Penrose - an ex-Booz Allen & Hamilton executive,
who was acting as John Z’s director of planning; and me
to Lotus at Hethel in Norfolk. We were to meet Colin
Chapman, chairman of Group Lotus (known to those few
extremely close to him as ‘Chunky’); Michael Kimberley,
his managing director; and Fred Bushell, Chapman’s
Early Days 11
12 Early Days
finance director and main confidant. Bushell had joined a
fledgling Lotus at Hornsea, Essex in January 1958 after a
period working in a local accountancy practice. I had made
many visits to Hethel but it was my first since joining
DMCL. John Z’s long-serving engineering director, Bill
Collins, was already located there with his small team of
engineers, using the former chapel of Ketteringham Hall
as their short-term office.
We met at 9am in a large, somewhat stuffy, sitting room in
Ketteringham Hall. It struck me as being the most unlikely
of settings for a business meeting, almost verging on the
ludicrous. Chapman and DeLorean were sat at the head
of the room in rather grand armchairs, each side of an
unlit fireplace, exuding something of the appearance of a
pair of imperial heads of state. Bill and Chuck sat to their
right, Mike and Fred to their left. The rest of us assembled
almost classroom-like, facing them from a mix of sofas,
armchairs, and dining room chairs, in a futile attempt at
comfort. I remember an enthusiastic Buck Penrose taking
a photograph or two. To say the meeting was informal is
a massive understatement. As it turned out it was totally
unnecessary for anyone other than DeLorean, Chapman
and Kimberley to have attended. No one else uttered so
much as a word!
Chapman opened the meeting (this was his entire
contribution to the proceedings) by asking Kimberley to
report on Lotus’ assessment of the concept car/prototype
the two had driven in Nevada on 26 September. It was not
flattering, much to Bill Collins’ unexpressed but obvious
annoyance. Lotus’ main, justifiable concern related to
the planned use of the totally unproven Elastic Reservoir
Moulding (ERM) composite as a structural material for
the car’s underbody and the absolute likelihood, as they
saw it, of the car failing the Federal crash tests. What
Chapman and Kimberley saw as a risk-free alternative was
a Lotus-style backbone chassis. Kimberley proposed this
be incorporated into the design - along with the adoption
of Lotus’ Vacuum Assisted Resin Injection (VARI)
composite system for the understructure of the body.
VARI was a relatively recent development, largely the
brainchild of Lotus’ aerodynamics specialist Peter Wright.
It had followed Lotus’ late entry into hand-lay composites
production compared to their competitors Jensen and
Reliant. Indeed, my former colleague at Reliant, Ken
Wood, had good reason to claim he ‘taught Lotus all he
knew’. After Chapman had asked Reliant’s managing
director Ray Wiggin for help, Ken had assisted Lotus to
take hand-lay moulding in-house from their then supplier
Bourne Plastics.
Kimberley should have stopped there but ‘went
commercial’ and said the DeLorean would cost more to
build than an Esprit - totally ignoring economies of scale
it would enjoy, compared to the hundreds a year volumes
of the Lotus model.
John Z seemed totally unfazed by it all, but said a decision
on Lotus’ recommendations should await the findings of
Grumman Aerospace, who were soon to present the results
of their computerised crash simulation of the car - a major
technological advance in the late seventies. It was agreed
that Grumman should be asked to visit Hethel as soon as
possible, so that their findings could be presented to both
the Lotus and DMC teams.
At that point, DeLorean and Chapman broke away into an
anteroom for ‘private discussions’, leaving the rest of us
A dark haired John DeLorean with Bill Collins to his right with
the first DeLorean concept/demonstrator, circa 1976
Lotus managing director,
Michael (Mike) Kimberley,
pictured in 1982
rather in the lurch and wondering what on earth we would
do next. Mike Kimberley and I decided to do something
constructive and go to lunch in Norwich.
Intermission
It had been only a few weeks since Mike Kimberley and I
had last met. That was at the London Motor Show, when
he and Chapman were still trying to hire me. Then, he
was conscious that he was unable to present me with an
attractive enough remuneration package, so dependent
were Lotus directors and executives on the impossible-toachieve bonus scheme dreamt up by Fred Bushell and
Chapman. Tony Rudd, Lotus’ director of engineering,
had advised me not to rely upon the non-existent bonus
as any form of top-up for what was an uncompetitive
base salary, compared to what I had made at Reliant.
Knowing my deal with DeLorean had to be better
than anything Lotus had been able to offer, Mike was
particularly keen to find out details of the agreement
I had reached with John Z. I resisted his efforts and
forced him gently off that subject and onto the one that
I wanted to explore. I asked him to outline the way in
which Lotus were going to handle the engineering and
development contract in the event that, as Chuck and
I were beginning to suspect, it was awarded to them.
I knew that Lotus’ manpower was limited - especially
if, as anticipated, they were to continue with their own
product development programme in parallel.
I asked Mike to describe the organisation he would be
putting into place. To my surprise he had anticipated
this question as he swiftly pulled a sheet of A4 paper
from his inside jacket pocket. On it was a handwritten
organisation chart. At the top - as chief engineer - there
was no name. Below it was a family tree of five branches.
To the left there was a name - Chris Dunster, who I was
told was an excellent young engineer - and that was it.
One person! The rest of the positions were blank.
My amazement was instantly evident. In response
to my shock, Mike stressed he was close to bringing
back to Lotus one of his most able former engineers.
This turned out to be Colin Spooner - discussions with
whom were clearly well advanced - as he arrived within
a couple of weeks from Lucas Marine. There were also
other appointments to come, I was told.
I had picked at my lunch as my appetite had all but
disappeared and by this stage it was time to get back to
Hethel, so Mike dropped me off at Ketteringham Hall
before returning to his office at the factory.
Over the next few weeks, Lotus’ senior management
salary structure was revised upwards significantly,
so concerned were Chapman and Bushell that DMCL
should not succeed in poaching any of their top
management. That said, Kimberley never thanked me
for being the catalyst for his generous rise.
Head of the DeLorean
DMC-12 engineering
team and former Lotus
engineering director,
Colin Spooner, pictured
in retirement in 2013
Early Days 13
14 Early Days
The GPD Contract(s) - Act 2
On arrival at Ketteringham Hall, I decided to seek out
Bill Collins, in order to get a feel for the strengths of
his team and to establish how he planned to integrate
with Lotus and how he was to supplement Lotus’
apparent meagre resources. At that time, Bill had only
four engineers with him in Hethel. One was Alan Cross,
an expatriate Brit, who had learned his trade at Ford’s
UK product development centre at Dunton, Essex. The
others were the ebullient and extravagantly dressed
Marshall Zaun; and two other very pleasant Americans
by the name of Joe Sahutski and Steve Matson. Steve
was Collins’ legislation guru. There was also talk of an
ex-GM production guy by the name of Terry Werrell,
but, to my knowledge, we saw nothing of him.
Zaun had joined DMC from Chevrolet but Alan Cross and
Steve Matson had worked for Malcolm Bricklin’s Canadian
car manufacturing company. This was an early seventies
project that was funded by the State of New Brunswick
Government. The Bricklin car, styled by an American
called Herb Grasse, was a composite bodied, two-seater,
gullwing-doored sports model, marketed as a ‘safety car’.
It was a brave effort that was under-capitalised. It ran out
of cash and left a multitude of creditors. Sound familiar?
I entered the former chapel at Ketteringham Hall to find
Bill all alone at a table with his head in his hands poring
over a multi-paged document. This, it turned out, he had
just received by fax from New York. ‘What’s that, Bill?’ I
asked innocently. Bill replied glumly that it was a contract
that provided for Lotus to have sole responsibility to
engineer and develop the car and that, effectively, he was
out of a job.
As far as I am aware, this was the first sighting in the UK
of the completed GPD contract. Quickly noting that one
of the parties to the contract was DMCL, I told Bill that,
as director of purchasing, I was in charge of contracts and
I should be the one to read and absorb the content and to
take it into my possession.
On reading it, to my amazement it was clear that a sum
of $18.5 million was to be paid up front to the Swissbased GPD Services, whoever they were, to secure the
services of Lotus Cars Limited and Colin Chapman, as a
named individual, to engineer and develop the car. Quite a
‘Golden Hello’, I thought! In addition, the contract made it
clear Lotus were to be paid over and above this amount for
all the work undertaken in fulfilling theirs and Chapman’s
tasks, with no fixed price in sight. That NIDA, the
Northern Ireland Office and, indeed, Sir Kenneth Cork in
years to come, considered this $18.5 million to be anything
other than a simple introduction fee plus a fee of $5 million
to use Lotus’ VARI system, with nothing else in return,
amazes me to this day. There was nothing in the contract
to suggest the up front sum was to cover any work at all in
engineering or developing the car by Lotus or anyone else.
That was to be over and above the total of $23.5 million.
Once I had read the contract in full - twice - I made a
phone call to Mike Kimberley. It went along the lines of:
‘Hey Mike, I am looking at a contract ... blah ... blah ...
blah ... etc. What a fabulous deal. I can’t believe what I
am looking at. You must be grateful that I had not been
given the job of negotiating on behalf of DMCL!’ I said
deliberately arrogantly, so as to goad Mike into a response.
Mike’s reply took me aback. ‘I don’t think it’s all that
generous to Lotus!’ he said calmly. Without giving
anything away about my knowledge of the up front $23.5
million, it became evident to me Mike was looking at a
similar but different document, containing no reference
to the up front sum. My guess was that it was a contract
between the mysterious GPD (who I had assumed might be
Malcolm Bricklin’s gullwing-doored ‘safety car’ as seen in this
photo from its sales brochure
The scene of
the infamous
November 1978
supper, the
Doric Hotel, now
Attlebrough Town
Hall, Norfolk
Chapman, and Mike thought could be John Z, I found out
years later), acting the role of a sales agency, and Lotus.
I decided to say no more and simply reported my findings
to Bennington. It was clear the contract I had confiscated
from Bill was also news to Chuck. After I gave it to Chuck,
that was the the last I ever saw of it until 2013, when I
obtained a copy under the 30-year rule.
One of the subsequent claims was that GPD had been
hired by Lotus to seek engineering contracts and as a result
approached John Z to introduce the Norfolk company to
him. During the project, amongst other papers, John Z
gave me a bundle of original Lotus-related correspondence
from 1975 and 76 - I assumed inadvertently. A letter dated
7 January 1976 from Bunkie Knudsen, John Z’s mentor
during his days with GM and by then chairman of White
Motor Corporation, the truck manufacturer, provided an
introduction to Sir Leonard Crossland, formerly chairman
of Ford, and then a non-executive director of Lotus. Sir
Leonard had given Bunkie a letter from Michael Kimberley
to him dated 15 December 1975 describing Lotus’ 907
engine. A second letter from Fred Bushell to John Z directly,
dated 15 October 1976, refers to a possible acquisition
of Lotus (referred to as ‘the matter’ and confirmed to me
as such by Lotus’ Warren King in 2014). All two years
and more before GPD’s arrival on the scene. This all
demonstrates - at least to my satisfaction - there was never
any need for GPD to ‘introduce’ Lotus to DeLorean.
At The Court of ‘King’ Colin
13 November 1978 was completed by John Z and his team
being entertained by Colin Chapman, in company with
Fred Bushell and Mike Kimberley, to supper at the Doric
Hotel in nearby Attleborough.
The owner of the Doric and ‘mine host’ Arthur ‘Benny’
Benbow and one of his daughters kept us all, Bushell
and Kimberley included, very well entertained by their
considerable charm and patience, whilst we waited
upwards of an hour after the allotted time for Chapman to
grace us with his presence.
The original DeLorean engineering
team with the first two concept/demonstrators and the epowood model
at the rear. Front left to right: Bob
Shields, Herman Raschke, Tom Zink,
Bob Manion. Rear left to right: John
Tresler, Dick Weir, Bill Collins, Joe
Sahutske
Early Days 15
16 Early Days
Bill Collins with the “DeLorean Safety Vehicle” - hence the DSV
on grille - epowood styling mockup at ItalDesign circa 1975
When Chapman arrived it was with a flourish of an entry
but without the hint of an apology, no doubt having
satisfied himself he had demonstrated his importance,
particularly to John Z. To us, he made a fool of himself,
and my respect for him, which had been considerable
up to that point, diminished instantly, never to recover.
Fortunately, after such a shaky start, the excellent meal,
wine, and conversation that followed, more than made up
for the Lotus chairman’s gross discourtesy.
The Departure of Bill Collins
Bill Collins was to resign soon after this fateful November
1978 day, joining American Motors as director of product
planning in the following spring. Cross resigned within
days of Bill’s departure but Zaun, Matson and Sahutske
stayed on for several months. They worked closely with
Lotus’ engineers as they progressed the chassis design but
found it difficult to relate to them, despite the Americans’
considerable best efforts. They too were to resign and
return to the USA within twelve months.
The McKinsey Report
Back in Dunmurry, following my disclosure of the
GPD contract to Chuck Bennington, he returned the
compliment by allowing me to read a report written by
a team of McKinsey consultants dated 19 July. This had
been requested, at short notice, by the Northern Ireland
Department of Commerce, during the 45-day assessment
of the project. The team was led by a 38-year-old former
Charterhouse pupil and Cambridge University graduate by
the name of John Banham.
The report highlighted the declared high-risk nature of the
project and included financial and business assessments of
a number of scenarios. The first was based on the premise
that DMCL achieved its projected sales volumes of 20,000
per annum by the third year of operation. The second
assumed a lower sales performance of 15,000 per annum
by the fourth year of operation. This was then subjected
to a production start-up delayed by six months, labour
productivity of 50 per cent of that planned, warranty
costs higher by $200 per unit and a reduced efficiency of
working capital management. The first scenario confirmed
a nice return on the Government’s investment. The
second scenario predicted a company that would struggle
financially and be unprofitable.
After the company entered receivership, Banham presented
himself to the press as the one person who had warned
of the financial disaster to come. The warning that James
Callaghan’s Government had ignored - surely making him
a candidate for a knighthood. Posts that he went on to fill
during his career after his prediction of DMCL’s failure
included director-general of the Confederation of British
Industries (CBI), the chairman of Tarmac, Kingfisher,
Johnson-Matthey, West Country Television, National
Westminster Bank, National Power, ECI Ventures,
Whitbread. On the other hand, of course, it could be
argued, Sir John Banham predicted its success.
The Grumman Visit to Hethel
Another key visit to Lotus by John Z coincided with the
keenly awaited Grumman presentation on 8 March 1979, led
by their sales chief Arthur (Art) August. This was extremely
professional and state of the art (no pun intended!) for that
time. I attended with John Z and Bennington.
After a lengthy preamble, it demonstrated that, if ERM
was incorporated into the production design, it was
a crash disaster waiting to happen. The presentation
continued with a status report on the development of the
cryogenically twisted torsion bar, which we learned for
the first time that its development had been committed to
Grumman before the project came to the UK. Finally, they
put forward a proposal through which they would develop
a computer programme that would determine how ERM
could be fully developed to fulfil crash test demands. The
cost in dollars of this was such that I think Bennington and
I immediately obliterated it from our memories. At this
stage, John Z thanked Art for the presentation and left the
room with Chapman, without another word.
Chuck and I both assumed that Chapman had already
convinced John Z that, due to the constraints of timing,
he should take the proven route and adopt a Lotus-style
backbone chassis and a VARI underbody for the car. This
was on the assumption that ERM would not be proven in
time for production, if ever. By now, I had researched that the
British composite specialists, BTR Permali, had also taken
a licence for ERM, some years earlier, and had dropped the
process in favour of SMC (sheet molded compound) and
DMC (dough molded compound) alternatives.
Bennington and I excused ourselves for a brief consultation
outside the room. ‘What do we say to them, Chuck?’ I
asked him. ‘What’s this we b**l s**t, kemo sabe?’ he said
(using the famous nickname used for the Lone Ranger
by his sidekick Tonto), before adding ‘I guess you’re
in charge of purchasing’ - and walked off. I returned to
the room and, in what I hoped was my most diplomatic
manner, broke the difficult news to the Grumman team
that work should continue on the torsion bar development
but that Grumman’s activity on an ERM underbody was to
be suspended and was probably at an end. Art was clearly
and understandably devastated. I think I had blown his
annual research and development budget in one sentence!