John DeLorean: The man who fooled the world

John DeLorean, who died on Saturday, was an American idol. But behind his glitzy image was a crook who spun a web of deception, writes Ivan Fallon

Seldom had there been a more public, dramatic, fall from grace. The images of John Z DeLorean, the glitzy, silver-haired "acceptable face" of the American car industry, flashed around the world, soon to lead every news programme and front page. There he was, ruffled and ashen-faced, hands manacled behind his back, walking towards the police car that would take him to jail and disgrace.

Seldom had there been a more public, dramatic, fall from grace. The images of John Z DeLorean, the glitzy, silver-haired "acceptable face" of the American car industry, flashed around the world, soon to lead every news programme and front page. There he was, ruffled and ashen-faced, hands manacled behind his back, walking towards the police car that would take him to jail and disgrace.

It was 20 October 1982; DeLorean was 59, a legend to a generation of Americans who had been brought up on the story of the man who conceived the Pontiac GTO. That car had caught the imagination of the youth of America in the 1960s and inspired a singing group called Ronnie and the Daytonas, whose record about the car went to the top of the hit parade. By an odd irony, it was also election day in Northern Ireland where DeLorean had built what had become the most talked-about car plant in the Western world, manufacturing his "dream" DMC-12 stainless-steel sports car with its distinctive gull-wing doors (as seen in the Hollywood film Back to the Future).

The story running on the overnight newswires hit Belfast with almighty force: DeLorean had been arrested in a Los Angeles airport hotel and charged by the FBI with taking part in a plot to smuggle 100kg of cocaine that could have been resold on American streets for $50m. US Justice Department officials claimed that DeLorean was making a last-minute effort to raise the money needed to save his bankrupt car company in Northern Ireland.

In a web of myths, deception, spin and disinformation, the latter claim was probably true. DeLorean would literally have done anything to save his precious car plant. For an all-too brief few years, he had brought hope to the beleaguered province, then at the height of the IRA campaign of violence and Protestant backlash. He had built a gleaming new factory in record time on a greenfield site in west Belfast which straddled both communities. At its peak, the factory employed 2,500 people, taken equally from the (Catholic) Twinbrook estate, home of the hunger striker Bobby Sands, and (Protestant) Dunmurry. Both sides met and mingled on the factory floor. It was a flagship project for the government officials and ministers who had lured DeLorean to one of the most troubled places on earth with the offer of grants, cash injections, tax-free profits and much else.

Now it had all rebounded, all the brilliant publicity which attended the launch four years earlier turning to acrimony and political finger-pointing. In Downing Street, Margaret Thatcher could scarcely contain her glee: although she had never met DeLorean, she hated the way DeLorean had blackmailed and pressured her into ploughing yet more millions of government cash into a project that the Treasury told her was doomed. When Bobby Sands had died in prison after eight weeks on hunger strike, Twinbrook had erupted and the rioting spilt into the DeLorean factory; DeLorean seized the opportunity to demand yet another tranche of cash - and Thatcher had to give it to him.

Now, with his arrest, she could dismiss it all - and she did - as the madness of the previous Labour government which had given DeLorean an initial £54m and then another £10m when that ran out. In all, a total of £84m had gone down the drain, money that could have been used to create serious long-term jobs in a province where male unemployment was above 30 per cent.

Looking back after more than 20 years, it is difficult now to explain the hold that DeLorean had on the political and news agenda of the time. In my role as a City editor, I interviewed him half a dozen times over a period of five years, and attempted to unravel and expose what I distantly perceived to be a scam pulled on the British taxpayer. I was allowed by the receiver to drive the very last DeLorean car off the gleaming production line in Belfast just a week before the arrest. And, although DeLorean regarded me as an enemy, he had agreed to one final "clean-up" interview in New York which was set for a week later. To say I was as astonished as everybody else when the man who had walked on water for so long now walked into an elaborate FBI trap would be an understatement.

In the weeks and months that followed, the accountants, lawyers and rueful Northern Ireland officials sifted through the piles of documentation that now came to light. They revealed what we critics believed but had never been able to prove: DeLorean had been defrauding his own company from the autumn of 1978. Millions would later be traced through Swiss bank accounts, from the British government and private investors to dummy companies and back, via numerous transfers, to DeLorean's private interests.

The drugs scheme, by contrast, began to emerge only in the spring of 1982. But the two activities soon became dependent parts of the events which ended up in that hotel room with DeLorean, caught by half a dozen concealed FBI cameras, hefting a bag of coke and remarking, with a loud chortle: "It's better than gold. Gold weighs more than that for God's sake".

How had he come to this? In asking that question, my mind goes back to August 1978 and the Labour minister Roy Mason, the Secretary of State for Northern Ireland, about to open a packed press conference in Belfast. The contrast between the two men on the podium could not have been more marked: Mason, squat, thick-set and beetle-browed, looking every bit the Barnsley coal miner he once was. Beside him, DeLorean looked as if he had just stepped off a Hollywood set: tall and trim, his mass of silver hair and immaculate white shirt setting off his California tan.

Mason announced to the assembled press that he had just signed a project which was "a tremendous breakthrough" for the government. The great John DeLorean, arguably the best engineer and automaker America had seen since the war, was going to build his "dream car" in Belfast. The government of Puerto Rico had wanted DeLorean to go there (which was true); so had Spain and DeLorean's native Detroit (almost true); and so had the government of the Republic of Ireland (not true - it had turned him down after due diligence had shown some of the flaws in DeLorean's proposal). Mason presented it as the biggest coup yet for the ambitious plans to attract foreign investment to the province and fight the men of violence with the best weapon possible: jobs.

Four years, £84m and four secretaries of state later, Belfast residents proudly watched transporters laden with silver sports cars trundle towards the docks and the American market which everyone believed eagerly awaited. In those years, the cracks in DeLorean's reputation had begun to appear and, by the end, they were gaping holes. Journalists had begun to unravel the myth he had created around himself, of the man who had set himself, Ralph Nader-like (and the consumer champion was a friend and supporter), against the excesses and exploitation of the American car industry.

DeLorean always claimed he had fired General Motors, but it was actually the other way around: GM had fired him, basically because power had gone to his head, and he was more interested in dating (and marrying) young blondes in California than he was in the boring business of making cars. Even more importantly, he was no longer "making his numbers" - an unforgivable sin for the suits in Detroit.

There was also a trail of fraud going back 20 years - mostly petty ones involving car dealerships and the odd inventor whose patent DeLorean had stolen and used as his own. There was a pattern to them which displayed a fatal character flaw - and which, when revealed, caused consternation in Belfast and London. Why, ministers muttered, had no one bothered to investigate properly? Instead of the engineering genius, a picture began to emerge of a vain and boastful man who talked endlessly about his successes and achievements which, although considerable in his younger years, could never match the claims he made for them.

One reporter dared to voice what everyone was privately thinking: "Isn't it a rather high-risk venture?" Not at all, replied DeLorean smoothly. "We have orders as of now for 30,000 cars. That is $300m of business. Of course there are going to be difficulties, a lot of hard work and many taxing problems. There always are. But I cannot agree with the description of this as a high-risk venture."

The statistics afterwards told a very different tale. Those 30,000 orders, never queried by Mason or his officials, were imaginary - there were no such orders, merely "expressions of interest". In its brief operating history, the DeLorean factory produced just 8,900 cars. By the time of his arrest, fewer than half had sold. The rest were in dealers' showrooms or in warehouses, unsold and unwanted. Some 1,000 cars lined the Belfast docks, with nowhere to go and no one to pay for them.

The car itself was also a fraud. DeLorean's great "dream", which took in investors including Sammy Davis Jnr and Johnny Carson as well as other Hollywood acquaintances, was that he was going to build the car that Detroit would never let him build: a car with a radical new design, built of new rust-proof materials, which would be safe and economical and would not be a "con" on the American people. He called it his "ethical car".

In fact, it was a very ordinary vehicle, hastily put together from standard off-the-shelf components which came nowhere near the performance or engineering of the rivals it was supposed to push off the road. Porsche took a minimum of six years to design and engineer a new car. DeLorean didn't have that time, and persuaded the late Colin Chapman of Lotus to do it for him in two. Chapman, then at the height of his career when his cars dominated the Grand Prix circuit, only agreed after DeLorean offered him a large bribe: he would split with him the $16.5m he had raised from investors to put into the project in Belfast. The trail of DeLorean's half was later uncovered but Chapman took the secret to his early grave.

To this day, Americans are still reluctant to believe that DeLorean was the crook that he so blatantly was. He was tried for a variety of offences in the United States, including fraud, and each time he was found not guilty. Bizarrely, he even escaped a jail sentence on the drugs bust and walked free to a hero's welcome.

The chief prosecutor had portrayed him as "the face of greed, the face of evil" but DeLorean displayed a new face: since his arrest, he announced, he had discovered Jesus, aided and counselled by the former Watergate man Chuck Colson. When he declared from the court steps that "as a Christian, I have no animosity, no grudges against any of these people," it was game, set and match to DeLorean. He had won his way back into American hearts.

He never showed his face in Belfast again, and died at the weekend, aged 80, his dream still unfulfilled.

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