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John Z. DeLorean----------------------------------Maggie Thatcher
The reasons for the closure of DeLorean Motor Company were very controversial. One thing is certain - it was not John DeLoreans fault, no matter what is written in the tabloids.
John DeLoreans own account of why the company was shutdown can be found at the following link: The injustice of what happened to him and his company is really shocking, and is a "must-read".
Briefly, here is an account of what happened to DMC and John DeLorean himself.
According to Authur Andersons audit accounts, in the last half of 1981, DMC's first 6 months in business, DMC earned $26,500,000 and was earning $5,000,000 a month when good old Maggie Thatcher closed them. She put the company into receivership on Febuary 19th 1982 officially over an inability of DMC to pay a debt of $800,000. The day she did this, the value of DMC's inventory of unsold cars plummeted by over $20,000,000. Nobody wanted to buy a car from a company in receivership, because their warranty would be null & void if the company went bankrupt.
2500 jobs were lost in Belfast, and many suppliers of DMC went bankrupt almost overnight. It was a disaster. It really makes me wonder how a person who is meant to lead a country could make such a stupid, thoughtless decision. It has come out since the closure of DMC however, (under the Freedom of Information Act) that the British Governments chief motivation for investing in DMC was an attempt to cripple the IRA, and when this didn't work, they wanted out of the whole deal, and decided to close DMC.
The reason DMC could not pay the English Government the money it was owed is simple. It had no working capital, because the Thatcher government refused to give export financing to DMC, even though every other government subsidised company in England got it, and they were obliged by contract to give it to DMC.
This is how Export financing was meant to work: When the cars left the Dunmurry factory and were loaded onto the ships, the government was meant to loan the company about 80% of the money the dealers were to pay for the car. Then, when the dealers did pay, that money would be repaid by DMC with interest to the government. It would have allowed DMC to pay creditors, and order in more materials. When the government refused to give this financing to DMC, the company was operating in a very unstable environment. Simply put, they had no working capital to be able to operate efficiently.
When John DeLorean saw that Maggie was trying her best to cripple DMC, on 2 separate occasions, he went to the British Government and offered his entire share in the company as long as they kept it alive. He had about $9,000,000 of his own money invested in the company at this time. He worked out a proposed merger with British Leyland, that would have made DMC very profitable, but to no avail. The British Government flatly refused.
The reasons for DMC's closure were very unethical, but they pale compared to some of the methods used. There is a lot of evidence that GM was also involved in the destruction of DeLorean Motor Company. For example, a telex from Kingman Brewster, the US ambassador to England, was sent to the State Department, in which he stated that General Motors objected strongly to all the financial incentives being given to DMC, and that they were a "serious threat to their business". As a result, DMC was forced to pay a $400 per car royalty, more per car than GM earned in most of those years.
In early 1982, (just before the company was put into receivership) when it was clear that DMC was going to be a great success, GM suddenly shut off floor plan financing to DMC's dealers in the US, so they could no longer afford to buy cars from DMC! The most unbelivable part is yet to come however - Maggie Thatchers husband Dennis Thatcher (seen above beside Maggie) was suddenly made a very highly paid GM executive, without one day of automotive experience. Their son was employed by Lotus as another highly paid executive in Texas. Lotus designed much of the DeLorean Sports Car - and at this time, Lotus was owned by General Motors!!! Does this sound a bit dodgy to you too???
A guy called Marvin Katz, from Columbus, Ohio, bought most of the tooling and parts in the closed Belfast plant. When he and John DeLorean tried to resurrect DMC in 1986 and build the car in Ohio, they sent Gordon Novel to Belfast to purchase the master body mould and body dies. The master bodymould had remained untouched since the closure of DMC in 1982, but on his arrival, it was promptly cut into little pieces. The body dies were sold, at a much lower price than Marvin Katz offered, to a fisherman. He threw them into Galway Bay, off the west coast of Ireland, to use as anchors for fishing nets, effectively ensuring that no more DeLorean Sports Cars would ever be built.
Please read John DeLoreans testimony for a fuller account of these events, plus many more injustices, also including the fabricated cocaine trial in Los Angeles. Once again, the link is:
I also recommend you read his autobiography, "DeLorean - by John Z. DeLorean with Ted Schwarz". You can pick up a copy at any of the following websites: