John Z. DeLorean
Wikipedia: John DeLorean
The following section is an excerpt from Wikipedia's John DeLorean page on 16 July 2016, text available via the Creative Commons Attribution-ShareAlike 3.0 Unported License.
John Zachary DeLorean was an American engineer and executive in the U.S. automobile industry, widely known for his work at General Motors and as founder of the DeLorean Motor Company.
DeLorean designed a number of vehicles throughout his career, including the Pontiac GTO muscle car, the Pontiac Firebird, Pontiac Grand Prix, Chevrolet Vega, and the DeLorean DMC-12 sports car, which was later featured in the 1985 film Back to the Future. While still the youngest division head in General Motors history, DeLorean broke away to start his own company, DeLorean Motor Company (DMC), in 1973. However, production delays meant DMC's first car and DeLorean's independent creative opus—the DMC-12—did not reach the consumer market until 1981 (nearly a decade later), where a depressed buying market was compounded by unexpectedly lukewarm reviews from critics and the public. After a year, the DMC-12 had failed to recoup its $175 million in investment costs, unsold cars were accumulating and the company faced dire financial straits.
Packard Motor Company
DeLorean's time at Chrysler lasted less than a year, ending when he was offered a US$14,000 salary at Packard Motor Company under supervision of noted engineer Forest McFarland. DeLorean quickly gained the attention of his new employer with an improvement to the Ultramatic automatic transmission, giving it an improved torque converter and dual drive ranges; it was launched as the "Twin-Ultramatic".
Packard was experiencing financial difficulties when DeLorean joined, because of the changing post-WWII automotive market. While Ford, General Motors, and Chrysler had begun producing affordable mainstream products designed to cater to the rising postwar middle class, Packard clung to their pre-World War II era notions of high-end, precisely engineered luxury cars. This exclusive philosophy was to take its toll on profitability. However, it proved to have a positive effect on DeLorean's attention to engineering detail, and after four years at Packard he became McFarland's successor as head of research and development.
While still a profitable company, Packard suffered alongside other independents as it struggled to compete when Ford and General Motors engaged in a price war. James Nance, President of Packard, decided to merge the company with Studebaker Corporation in 1954. A subsequent proposed merger with American Motors Corporation never passed the discussion phase. DeLorean considered keeping his job and moving to Studebaker headquarters in South Bend, Indiana, when he received a call from Oliver K. Kelley, vice president of engineering at General Motors, a man whom DeLorean greatly admired. Kelley called to offer DeLorean his choice of jobs in five divisions of GM.
General Motors: Pontiac
In 1956 DeLorean accepted a $16,000 salary offer with a bonus program, choosing to work at GM's Pontiac division as an assistant to chief engineer Pete Estes and general manager Semon "Bunkie" Knudsen. Knudsen was the son of the former president of GM, William Knudsen, who was called away from his post to head the war mobilization production effort at the request of President Roosevelt. Knudsen was also a MIT engineering graduate, and at 42 he was the youngest man to head a division of GM. DeLorean and Knudsen quickly became close friends, and DeLorean eventually cited Knudsen as a major influence and mentor. DeLorean's years of engineering at Pontiac were highly successful, producing dozens of patented innovations for the company, and in 1961 he was promoted to the position of division chief engineer.
DeLorean's best-known contribution to Pontiac was the Pontiac GTO, widely considered the first muscle car.
DeLorean's most notable contribution to Pontiac was the Pontiac GTO (Gran Turismo Omologato), a muscle car named after the Ferrari 250 GTO. It evolved because after the internal GM ban on racing (January 1963) which Pontiac had used racing to propel itself into the # 3 sales slot was taken away. Pontiac was forced to take its efforts off the track and put it on the street to maintain its # 3 position. The result was the GTO. The GTO debuted as a Tempest/LeMans option package with a larger, more powerful engine in 1964. This marked the beginning of Pontiac's renaissance as GM's performance division instead of its previous position as a slightly bigger Chevrolet with no clear brand identity.
From its launch in 1964, sales of the car and its popularity continued to grow dramatically in the following years. DeLorean received almost total credit for the success of the "first muscle car", singularly responsible for conceptualizing, engineering, and the marketing – becoming the singular golden boy of Pontiac, and was rewarded with his 1965 promotion to head the entire Pontiac division.
At the age of 40, DeLorean had broken the record for youngest division head at GM, and was determined to continue his string of successes. Adapting to the frustrations that he perceived in the executive offices was, however, a difficult transition for him. DeLorean believed there was an undue amount of infighting at GM between divisional heads, and several of Pontiac's advertising campaign themes met with internal resistance, such as the "Tiger" campaign used to promote the GTO and other Pontiac models in 1965 and 1966. One of the biggest disappointments for Pontiac was the GM's fourteenth floor's Ed Cole's decision to ban multiple carburetion. Multiple carburetion had been with Pontiac since 1956 starting with 2X4 bbls. and Pontiac's famous Tri-Power (3X2bbls.) since 1957. Ironically the only GM cars to escape this ban was Ed Cole's beloved Corvair and Corvette. There are scores of this conflict with Ed Cole that go way back to Bunkie Knudsen. The most memorable would be the 1964 GTO was supposed to be equipped with disc brakes which were even tooled for free by Kelsey Hayes, and radial tires were supposed to be offered but were killed by Cole as well.
In response to the "pony car" market dominated by the wildly successful Ford Mustang, DeLorean turned to the 14th Floor for permission to offer a smaller version of the Pontiac Banshee Show car for 1966. DeLorean's version was rejected because of GM's concern that his design would take away sales from the Corvette, their flagship performance vehicle, so instead they forced him to work with the existing Camaro design. He could only make changes to the front and rear of the car and even had to use the same fenders. Suspension was a whole different story as the Firebird has front and rear suspension differences compared to Camaro. The vehicle, the Pontiac Firebird, introduced for the 1967 model year became even more popular throughout the 70s.
Shortly after the Firebird's introduction, DeLorean turned his attention to development of an all-new Grand Prix, the division's personal luxury car based on the full sized Pontiac line since 1962. Sales were sagging by this time however, but the new for 1969 model would have its own distinct body shell with drivetrain and chassis components from the intermediate-sized Pontiac A-body (Tempest, LeMans, GTO). Delorean knew Pontiac Division couldn't finance the new car alone so Delorean went to his former boss Pete Estes and asked to share the cost of development with Pontiac having a one-year exclusivity before Chevrolet would release the 1970 Monte Carlo. The deal was done. The 1969 Pontiac Grand Prix looked a lot like a slightly scaled down Cadillac Eldorado with its razor-sharp bodylines and a 6-foot-long (1.8 m) hood. Inside was a sporty and luxurious interior highlighted by a wraparound cockpit-style instrument panel, bucket seats and center console. The new model offered a sportier, high performance, somewhat smaller and lower-priced alternative to the other personal luxury cars then on the market such as the Ford Thunderbird, Buick Riviera, Lincoln Continental Mark III, and Oldsmobile Toronado. The 1969 Grand Prix production ended up at over 112,000 units, far higher than the 32,000 1968 Grand Prix built from the full-sized Pontiac body.
During his time at Pontiac, DeLorean had begun to enjoy the freedom and celebrity that came with his position, and spent a good deal of his time traveling to locations around the world to support promotional events. His frequent public appearances helped to solidify his image as a "rebel" corporate businessman with his trendy dress style and casual banter.
Ralph Nader's book, Unsafe at Any Speed, published in 1965, criticized a number of Detroit automobiles as poorly designed for safety concerns, including the Chevrolet Corvair model. Even as General Motors experienced revenue declines, Pontiac remained highly profitable under DeLorean, and despite his growing reputation as a corporate maverick, on February 15, 1969 he was again promoted. This time it was to head up the prestigious Chevrolet division, General Motors' flagship marque.
The 1970 Chevrolet Nova was released behind schedule under DeLorean's leadership of GM's Chevrolet division.
By this time, DeLorean commanded an annual salary of $200,000, with yearly bonuses of up to $400,000. He had made sizable investments in the San Diego Chargers and the New York Yankees sports teams, and was becoming ever more ubiquitous in popular culture. At a time when business executives were typically conservative, low-key individuals in three-piece suits, DeLorean wore long sideburns and unbuttoned shirts. He also horrified fellow GM executives by inviting Ford president Lee Iacocca to serve as best man at his second wedding.
DeLorean continued his jet-setting lifestyle, and was often seen hanging out in business and entertainment celebrity circles. He became friends with James T. Aubrey, president of Metro-Goldwyn-Mayer Studios, and was introduced to celebrities such as financier Kirk Kerkorian, Chris-Craft chairman Herb Siegel, entertainer Sammy Davis Jr., and The Tonight Show host Johnny Carson.
The executive offices of General Motors headquarters continued to clash with DeLorean's nonconformity, and he was still not able to fit the traditional mold of conservatism that was usually expected of someone of his stature. When John was appointed, Chevrolet was having financial and organizational troubles, and GM president Ed Cole needed a first-class manager in that position to sort things out – company man or not. The new model Camaro was due out for the 1970 model year, and it was rapidly falling behind schedule. Redesigns for the Corvette and Nova were also delayed, and unit sales had still not recovered from the past four years of turmoil, much of that because of the bad publicity surrounding the Corvair and well-publicized quality-control issues affecting other Chevy models, including defective motor mounts that led to an unprecedented recall of 6.7 million Chevrolets built between 1965 and 1969. DeLorean responded to the production problems by delaying the release of the Camaro, and simplifying the modifications to the Corvette and Nova. He used the extra time to streamline Chevrolet's production overhead and reduce assembly costs. By 1971, Chevrolet was experiencing record sales in excess of 3 million vehicles, and his division alone was nearly matching that of the entire Ford Motor Company. Another promotion was imminent for DeLorean.
The Vega was assigned to Chevrolet by corporate management, specifically by GM president Ed Cole, just weeks before DeLorean's 1969 arrival as Chevrolet division's general manager. In a Motor Trend interview August, 1970 DeLorean said, "Vega will be the highest quality product ever built by Chevrolet." By DeLorean's orders, tens of extra inspectors were assigned on the Vega assembly line and the first two thousand cars were road tested. He stated, "The first cars, from a manufacturing standpoint, were well built." But in 1972, General Motors Assembly Division (GMAD) took over the Chevrolet Lordstown assembly plant and adjoining Fisher body plant. Their main goal was to cut costs and more than 800 workers were laid off, many of which were additional inspectors. This led to assembly-line vandalism, with workers intentionally slowing the line, leaving off parts and installing others improperly. Incomplete and often non-functioning cars soon filled the factory lot, which then had to be reprocessed and repaired by a team assigned to this task by DeLorean. A one-month strike followed and dealers didn't receive enough cars for the demand in 1972. DeLorean regrouped for the 1973 model year with Vega sales of 395,792. The one millionth Vega was built in May 1973, a month after DeLorean's GM resignation.
In 1972, DeLorean was appointed to the position of vice president of car and truck production for the entire General Motors line, and his eventual rise to president seemed inevitable. However, the idea of him assuming that position was almost intolerable to GM executives, and on April 2, 1973, he announced that he was leaving the company, telling 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." although it was rumored that he had been fired. GM gave him a Florida Cadillac franchise as a retirement gift, and DeLorean did in fact take over the presidency of The National Alliance of Businessmen, a charitable organization with the mission of employing Americans in need, founded by Lyndon Johnson and Henry Ford. GM was a major contributor to the group, and agreed to continue his salary while he remained president of NAB. DeLorean was sharply critical of the direction GM had taken by the start of the 1970s, saying "There's no forward response at General Motors to what the public wants today." He also objected to the idea of using rebates to sell cars on the grounds that "A car should make people's eyes light up when they step into the showroom. Rebates are merely a way of convincing customers to buy bland cars they're not interested in."
DeLorean Motor Company
DeLorean left General Motors in 1973 to form his own company, the DeLorean Motor Company. A two-seater sports car prototype was shown in the mid-1970s called the DeLorean Safety Vehicle (DSV), with its bodyshell designed by Italdesign's Giorgetto Giugiaro. The car entered into production as the DMC-12, but known simply as the DeLorean. The car's body distinctively used stainless steel and featured gull-wing doors and was powered by the "Douvrin" V6 engine developed by Peugeot, Renault and Volvo (known as the PRV).
The manufacturing plant to build the new car was built in Dunmurry, Northern Ireland, with substantial financial incentives from the Northern Ireland Development Agency of around £100 million. Renault was contracted to build the factory, which employed over 2000 workers at its peak production. The engine was made by Renault, while Lotus designed the chassis and bodywork details. The Dunmurry factory would eventually turn out around 9,000 cars over 21 months of operation.
Production delays meant the DMC-12 did not reach the consumer market until January 1981 (nearly a decade after the company was founded), and in the interim the new car market had slumped considerably due to the 1980 US economic recession. This was compounded by unexpectedly lukewarm reviews from critics and the public, who generally felt the uniqueness of the DMC-12's styling did not compensate for the higher price and lower horsepower relative to other sport coupes on the market. While interest in the DMC-12 quickly dwindled, competing models with lower price tags and more powerful engines (such as the Chevrolet Corvette) sold in record numbers during 1980-81 in spite of the ongoing recession. By February 1982, more than half of the roughly 7,000 DMC-12s produced remained unsold, DMC was $175 million in debt, and the Dunmurry factory was placed in receivership.
After going into receivership in February 1982, DMC produced another 2,000 cars until John DeLorean's arrest in late October, at which point liquidation proceedings were undertaken and the factory was seized by the British government for good.
1979 book about General Motors
After DeLorean left General Motors, Patrick Wright, author and former Business Week reporter, approached him with the idea of writing a book based on his experiences there. DeLorean agreed to dictate his recollections for Wright, who wrote the book. The final product, published in 1979, On a Clear Day You Can See General Motors, sold approximately 1.6 million copies, but disagreements over the content led to a conflict between the collaborators, with Wright eventually publishing the book on his own.
Arrest and trial
On October 19, 1982, DeLorean was charged with trafficking cocaine by the U.S. government, following a videotaped sting operation in which he was recorded by undercover Federal agents agreeing to bankroll cocaine smuggling operation. He had more than 59 pounds (27 kg) of cocaine (worth about $6.5 million) in a hotel near Los Angeles International Airport after arriving from New York, and the Federal Bureau of Investigation stated DeLorean was the "financier" to help the financially declining company in a scheme to sell 220 lb (100 kg), with an estimated value of $24 million. The government was tipped off to DeLorean by confidential informant James Timothy Hoffman, a former neighbor, who reported to his FBI superiors that DeLorean had approached him to ask about setting up a cocaine deal; in reality, Hoffman had called DeLorean and suggested the deal (which DeLorean then accepted) as part of his efforts to receive a reduced sentence on a 1981 Federal cocaine trafficking charge that he was awaiting trial on. Hoffman (whose name was redacted on the original indictment) also stated that he was aware of DeLorean's financial troubles before he contacted him, and had heard him admit that he needed $17 million "in a hurry" to prevent DMC's imminent insolvency.
Taken together, these two elements allowed DeLorean to successfully defend himself at trial with the procedural defense of police entrapment. Despite video and audio evidence clearly showing him negotiating over the particulars of the deal and referring to a suitcase full of cocaine as "good as gold", his lawyers successfully argued that the FBI and DEA had unfairly targeted and illegally entrapped DeLorean when they allowed Hoffman (an active FBI informant who only knew DeLorean casually) to randomly elicit DeLorean into a criminal conspiracy simply because he was known to be financially vulnerable. Another factor was DeLorean's lack of criminal history, whereas Hoffman was a career criminal who stood to directly benefit if he was able to convince DeLorean to incriminate himself on tape. The DeLorean defense team did not call any witnesses. DeLorean was found not guilty on August 16, 1984, but by then DMC had already collapsed into bankruptcy and DeLorean's reputation as a businessman was irrevocably tarnished. When asked after his acquittal if he planned to resume his career in the auto industry, DeLorean bitterly quipped "Would you buy a used car from me?"
The Crittenden Automotive Library's "Reference Desk" is a collection of materials that cannot be shared due to copyright restrictions. Information from these resources, however, can be shared. Go to the Reference Desk page for more information.
|1979 Book||On a Clear Day You Can See General Motors: John Z. DeLorean's Look Inside The Automotive Giant by J. Patrick Wright; Wright Enterprises|
|1985 Book||DeLorean by John Z. DeLorean with Ted Schwarz; Zondervan Publishing|
|21 March 2005||Car maker DeLorean dies at 80||Wikinews|
|Date||Document Name & Details||Documents|
|5 April 1983||Mounting for a Vehicle Door|
United States Patent US 4,378,658
John Z. DeLorean for the DeLorean Research Limited Partnership
PDF - 604KB - 7 pages
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