Belfast Telegraph

Thursday 18 September 2014

Tycoon DeLorean’s regrets as car dream crashed

US maverick told officials he got |it so wrong as collapse loomed

One of the first cars to roll off the production line

John DeLorean admitted to Government officials that he had “grossly underestimated” the difficulties of establishing a car plant in Northern Ireland in the 1980s.

The maverick American entrepreneur conceded he had made serious mistakes just months before the spectacular collapse of his west Belfast business.

DeLorean remains a highly controversial figure 30 years after the company’s sudden demise, providing the starkest example of the era’s boom and bust cycle.

With its iconic gull wings, his car was instantly recognisable and became legendary after it was turned into a time machine in the Back To The Future films.

But behind the ambition and Hollywood-style glitz lay one of Ulster’s biggest ever corporate scandals.

Successive Governments pumped £77m of taxpayers’ cash into the DeLorean sports car project between 1978 and 1982. DeLorean had pledged to create 2,000 jobs, but the company went into receivership in February 1982 — 12 months after starting full-scale production. It closed four months later.

The desperate battle to save the company in the final weeks is outlined in Government files released today under the 30-year rule by the Public Record Office.

Among the batch of notes, memos and letters are fresh insights into DeLorean’s increasingly bizarre mindset as his business collapsed.

According to one document, he appears to express regret about his west Belfast venture, contrasting with the defiant confidence he would display in public.

It refers to a January 1982 meeting attended by DeLorean, Secretary of State Jim Prior and other officials.

“(DeLorean) accepted that he had grossly underestimated the problems of establishing a new factory, training a new workforce and producing a car of the required quality, but he believed nonetheless that his firm’s achievement was considerable,” the memo states.

Other documents describe how DeLorean was becoming increasingly desperate as he fought to save his ailing business.

One letter from NIO official Stephen Boys-Smith, sent in January 1982, refers to a meeting involving Sir Kenneth Cork, the receiver for DeLorean Motor Company Limited (DMCL). It records how Sir Kenneth “did not believe that DeLorean had fully appreciated the seriousness of the situation in which he now found himself”.

Another document from the same month reports on a turbulent company board meeting in New York

According to an account provided by a Mr Sim, one of the two directors appointed to the board by the Northern Ireland Development Agency (NIDA), the meeting was “a shambles, a fantasy and an orchestrated pantomime”.

It adds: “There was a good deal of abuse from Mr DeLorean about Government, and he made allegations about Government responsibility for leaks.”

DeLorean previously claimed his company no longer had an immediate cash problem during talks to secure more Government funding.

Papers from December 1981 refer to “steady progress on all fronts”.

One remarked that the company expected to sell 1,630 cars to the Middle East and the non-EEC market in the next 12 months.

Yet, within weeks, the prospects had turned dramatically, with DeLorean blaming a sudden collapse in the US car market.

A report of a meeting involving DeLorean executives and officials from the Department of Commerce and NIDA raised some awkward questions.

“After Christmas, and after Government had committed itself to rolling forward the guarantees, we had been presented with a picture of a sudden collapse in business leading to an immediate cash crisis,” it states.

“Mr DeLorean was at pains to assure me that he had not sought to mislead Government about the

company’s position.”

However, the author adds: “I did not find these explanations and assurances very convincing.”

A letter dated January 28, 1982, reporting on a conversation between Mr Sim and the Secretary of State, claimed that DeLorean was “in a disturbed state, and possibly not wholly rational”.

Days earlier, he had tried to convince Government officials that a mysterious new investor was ready to rescue his ailing business.

However, a memo dismissed the claims, noting: “Whatever deal he is assembling, it is difficult to believe that any institution will be willing to put fresh money into the DeLorean group of companies without some guarantee of either a good return or eventual repayment.”

Other memos referred to plans by DeLorean to mortgage “everything he owns”.

This was dismissed by KP Bloomfield from the Department of Commerce, who noted that “he was mortgaged to the hilt already”.

It also claimed DeLorean was in touch with another disgraced tycoon, Tiny Rowland.

A rescue plan failed and months later the plant was shut down.

Despite ambitious plans to create a car empire, just 9,000 DeLoreans were produced before the plant closed, taking with it 2,500 jobs and millions of pounds of public cash.

DeLorean was arrested in 1982 in Los Angeles on cocaine dealing charges. He was later acquitted.

Parliament’s Public Accounts Committee subsequently branded the project as “one of the gravest cases of the misuse of public resources to come before us in many years”.

The scandal included an £8.83m fraud. This money was to have been used by Lotus Cars for research and development work for the DeLorean company.

But it was siphoned away via a Swiss-based company.

DeLorean was declared bankrupt in 1999 and died, aged 80, in March 2005 after complications caused by a stroke. He was still wanted by the British Government for fraud.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Nightlife Galleries

More

Latest News

Latest Sport

Latest Showbiz