In January 1981, production of the DMC-12 began to great fanfare and was watched with interest the world over. A year later, the dream had all but died. The official receivers were in charge of operations, DeLorean was removed from the company and investigation was underway to ascertain just where all the Government money had gone.
The Dunmurry factory was given a stay of execution to enable the completion of the remaining half built cars. Attempts were made to fast-track the production of European and right-hand drive variants, as part of a rescue plan, but it was entirely fruitless. Production ceased in May 1982.
John DeLorean scrabbled around, in an attempt to salvage the operation. The administrators would allow production to restart if DeLorean could come up with £10m. A deadline was set for July 1982. As per usual, John Z said he could deliver. By this stage, though, his promises were treated with a great degree of scepticism.
DeLorean’s ability to leverage funding was also affected by converging stories about his own financial impropriety. In the latter stages of 1981, a whistleblower alleged that public funding meant for DMC Limited was propping up his luxury lifestyle. The police were notified, an investigation was launched, and nothing was found.
DeLorean made an assumption that the West Belfast operation wouldn’t be allowed to go under. He also made the assumption that someone would ride in to the rescue. They didn’t. In an ignominious fall from grace, the one-time Detroit wonder boy was arrested by the FBI in October 1982, apparently in the midst of facilitating a mammoth cocaine deal. Delorean claimed entrapment. The newspapers had a field day.
For the official receivers, this was the final straw. With DeLorean languishing in jail, the 35 employees left at the Belfast plant were dismissed and the company was wound up. The US wing of the DMC group suffered a similar fate. Just days after the demise of DMC Limited in the UK, the DeLorean Motor Company was also forced into bankruptcy. The dream had died.
But like all good stories, there was several twists left in the tale. After DMC imploded, the Thatcher Government was determined to find out where their £77m investment had gone. A forensic investigation of DMC Limited accounts revealed that the money originally paid to GPD Services, the Swiss consultancy company, for development work by Lotus Cars, had never been received by the Norfolk based firm.
DeLorean paid GPD Services a lump sum of $17.3 million, in advance, to carry out the engineering work. The lion’s share of this money had come from the British exchequer. Then between April 1979 and December 1981, a further £11.5 million was paid by DeLorean Motor Cars Ltd. to GPD Services for “technical development”, over and above the advance payments. Where did the money go? The receivers claimed that the GPD money had simply disappeared.
Not so, it had been divided up between DeLorean, Lotus CEO Colin Chapman and the Lotus accountant, Fred Bushell. Chapman died in 1982, meaning he never stood trial. DeLorean successfully fought off extradition, claiming he would never get a fair trial. Bushell did stand trial in 1992 and served three years in prison. In court, the judge remarked that he would have liked to sentence DeLorean to 10 years for “barefaced, outrageous and massive fraud”.
The Government spent years investigating the DeLorean debacle. Further scandals emerged. His wife, Christina, sat on the board of one of his companies, and he had paid himself, her, and other top executives salaries in excess of $300,000 a year even though the company was struggling to survive. He amassed luxury properties in London and New York and flew everywhere via Concorde. He was rarely seen in Belfast or the DMC Factory in Dunmurry though, allegedly due to an IRA death threat, widely believed as yet another deception by DeLorean.
The scale of DeLorean’s world class scam has overshadowed the brilliant achievements of the Northern Ireland company that carried his name. In less than two years, they built a factory. In two more, they managed to build a car that has truly stood the test of time – around two thirds of the original batch of 8,563 cars still exist today.
In 2011, over 80 DeLoreans returned to the DMC Factory. You can read our coverage here