Needs an accountant: DeLorean

John DeLorean’s dream car cost him his business and his reputation. That’s heavy, Doc.

In an airport hotel room in Los Angeles on 19 October 1982, John DeLorean sold his soul to save his business. He’d just been provided with 27kg of cocaine – enough to raise the $24m he needed to save DeLorean Motor Company (DMC), the passion project he started in 1975.

“It’s better than gold,” he said. Then the FBI moved in. DeLorean had been caught in a sting. His contact, James Hoff man, was an FBI informant. The hotel room was bugged, and the entire deal was filmed. DeLorean was arrested for drug trafficking. DeLorean’s rise and fall is notorious in the motor industry.

Starting out as an engineer, he made his name at General Motors, designing the Pontiac GTO, one of the most popular cars of the 1960s. He was quickly promoted to head of North American operations. He also became heavily involved in the 1960s counterculture. He divorced his second wife and started dating celebrities such as Raquel Welch and Ursula Andress. By 1972, he was dating a young model named Cristina Ferrare, had changed his wardrobe and had dabbled with plastic surgery.

By 1973, General Motors was fed up with his antics and DeLorean left the company. After a few years of dabbling in real estate investment, DeLorean decided to follow his dream and start his own motor company. A chunk of the $175m needed to start the business came from investors such as celebrities Sammy Davis Jr and Johnny Carson.

The bulk of the investment, however, came from the British government, which gave DeLorean $156m in grants and loans in return for locating the DMC factory in Northern Ireland. The factory exclusively produced the DMC-12, which, with its distinctive gull-wing doors and stainless-steel finish, eventually became one of the most iconic cars ever, thanks to its role as the time machine in 1985’s Back to the Future.

DeLorean, confident of his success, lived the high life, splitting his time between his $7.5m New York duplex, a $3.5m estate in New Jersey, and a $4m California ranch. But in the future lay trouble. Bad budgeting meant the DMC-12 went on the market in 1981 with a prohibitively high price tag, at $26,000 (about $10,000 more than a Corvette, and about $20,000 more than the average car). The market was competitive and the US economy was in recession.

Hardly anybody was interested in the DMC-12. In October 1982, the British government, realising its investment was a bust, ordered the DMC factory to be shut down. DeLorean would do anything to keep his business afloat – even take a call from James Hoffman. DeLorean was eventually acquitted of drug trafficking, after the sting was found to be entrapment.

But accusations of fraud plagued him until his death in 2005. The car’s then futuristic look, and DeLorean’s outlaw status, meant that, for Back to the Future co-writer Bob Gale, it was the perfect choice of time machine. DeLorean himself was thrilled with the filmmakers’ choice, but they lived to regret it.

“As cool as it looks on film, it’s by no means a performance car,” recalled Gale. “It broke down a lot, and little things on the car would break during a scene, and we’d have to wait for the FX guys to repair it.”

This piece was first published in Accounting Technician magazine. AAT members can login to the archive to read more of the May/June issue with great reads on tax experiments from around the world and blockchain technology.

Mark Rowland is a journalist and former editor of Accounting Technician and 20 magazine.