John Z

John Z. DeLorean never will be ranked with such General Motors Corp. luminaries as founder William C. Durant, financial genius Alfred P. Sloan Jr. or engineering wizard Charles F. Kettering but he's had his moments. It has been nearly 30 years since DeLorean and GM parted company, yet his name still evokes instant recognition as one of the most famous and flamboyant auto executives ever. In an era

AL Rothenberg

March 1, 2002

12 Min Read
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John Z. DeLorean never will be ranked with such General Motors Corp. luminaries as founder William C. Durant, financial genius Alfred P. Sloan Jr. or engineering wizard Charles F. Kettering — but he's had his moments.

It has been nearly 30 years since DeLorean and GM parted company, yet his name still evokes instant recognition as one of the most famous and flamboyant auto executives ever. In an era when most automotive engineers favored short pants and pocket protectors, DeLorean was a celebrity who wore the latest styles and dated movie stars.

And rather than fading into oblivion like so many other failed cars, his ill-fated, stainless steel namesake has been immortalized in the hugely popular “Back to the Future” movies.

DeLorean's image as an icon of 1980s pop culture was cemented when he was arrested in 1982, accused in an FBI sting operation of conspiring to sell $24 million of cocaine in a money laundering scheme designed to salvage his cash-strapped car company. In one of the most sensationalized trials of the 1980s — rivaling that of O.J. Simpson 10 years later — DeLorean ended up being acquitted of all charges, with his lawyers successfully arguing that the FBI actions constituted entrapment.

Yet even as he has moved on, controversy still seems to follow.

Even so, DeLorean remains a larger-than-life character in the automotive world. Early in his career, despite his glamorous lifestyle and movie-star looks, DeLorean managed to win the respect of those working in the trenches at GM as a solid executive — and a brilliant engineer. Interviewed in January by Ward's, he now is 77 and remains brash and rebellious. DeLorean still looks ahead and weighs many opinions on the current state of his industry, ranging from the problems of his former employer to the recent GM hiring of Robert Lutz.

“GM was very lucky to get Bob Lutz,” the former group vice president over all of GM's car and truck divisions observes. “It shows that the company leaders have to get off their asses and get some exciting products. That was the first step. The other factor is that they got into a total morass with the worst marketing that anybody ever saw.”

DeLorean headed GM's Chevrolet Div. from 1969 until 1972 and led the Pontiac Div. in four previous years. He never knew Ron Zarrella, the former president of GM North America who resigned late last year right after Lutz came aboard. He does not have a high regard for Zarrella and thinks even less of his program of brand managers for each car line. “That was a big step backward, but it followed a series of disastrous steps dating back to the chairmanship of Roger Smith (1981-1990),” the former executive notes.

“Roger was talked into an all-new car, Saturn, when you had all the other five car divisions that needed help. Saturn was a total mistake. What should have been done when they wanted to show the world GM could build a quality car is start with Chevy or Olds or Buick.” DeLorean's views on Saturn are shared by many GM dealers, and the launch of that program in 1989 was especially painful to the highly competitive Chevrolet dealers.

DeLorean contends that everything Zarrella did was wrong. “You can't sell cars and trucks like you were selling contact lenses,” he says. “To the average buyer, a car is second only to his home as the most significant purchase in a lifetime. A little guy working, carrying a payment of $400 a month, has to spend a big part of his disposable income. It's a very relative thing. What the manufacturer has to do is really look at that part of the market. Big executives have a hard time understanding the market of lower-income people.

“Some executive making a million bucks a year and never driving anything but a company car can't comprehend the struggles of a poorer person working long enough to buy a car and send his kid off to college,” DeLorean says.

A hot car that reached the market in 1964 at a price below $4,000 was the Pontiac GTO. DeLorean took a so-so midsized car, the Tempest, and inserted a power-packed Bonneville V-8 engine. Actually, he built just one for himself, and later the full GTO decision was made without the knowledge of the GM Engineering Policy Committee. (EPC later instituted fresh rules). GTO sales in the first year topped 45,000, and some insiders say could have reached 100,000 if production capacity had been available.

DeLorean's days at Pontiac were among his most joyous, especially in the early 1960s, when his mentor, Bunkie Knudsen, headed the division and E.M. (Pete) Estes, later a GM president, was the chief engineer. Knudsen left GM in 1968 for a short-lived, 19-month stint as president of Ford Motor Co.

“Bunkie Knudsen was an incredible executive who listened to people,” DeLorean says. “There is much more power in getting a whole team to work together as opposed to some guy with a preconceived notion of getting things done.”

DeLorean headed engineering research and development at the old Packard Motor Car Co. shortly before it folded. Knudsen offered him an engineering position at Pontiac in 1956.

During the DeLorean years, you could always spot a GM executive in a crowd — he was likely dressed in a black suit, white shirt and conservative tie. That was not John DeLorean. His sideburns were GM-unique extending below the ear lobes. And while he wasn't completely into casual wear at work, he was ahead of his time with loose and flashy clothes. This writer, noting DeLorean was a maverick, wondered how he stayed on GM's payroll. In an interview soon after his dismissal from Ford, Knudsen offered this insight: “John DeLorean is just the smartest damn engineer in this town.”

Edward N. Cole, GM president in 1969, called DeLorean off vacation and awarded him the top Chevy job. His immediate superior was Roger Kyes. The pair shared a mutual dislike. DeLorean recalls that Kyes told the new boss of GM's volume division that he was not his choice and warned: “I don't think you can do it. The minute you fall on your ass, I'm going to throw you out.” Chevrolet rang up record sales during the DeLorean years. So did Pontiac.

DeLorean has a variety of opinions on auto executives past and present:

“One of the best American execs who ever lived was Ernest R. Breech of Ford Motor Co., who did what Jack Welch did for General Electric, but Breech did it for many different companies.” Breech was hired in 1945 as chairman and tutor to the young Henry Ford II.

DeLorean labels Pete Estes as a good engineer but “not a great executive.” He calls Thomas Murphy, GM board chairman (1974-1980), “a very wonderful human being, but primarily a finance guy.”

He even has some consoling words for Jacques Nasser, recently ousted as Ford's president and chief executive officer. “Nasser should not have been surprised. Ford has a long history of firing top executives — Ernie Breech, Lee Iacocca, Bunkie Knudsen and Hal Sperlich.”

DeLorean admires Lee Iacocca from afar, but never thought about working with him. He describes Henry Ford II as “unique,” adding “I always liked him.”

An industry leader who rates DeLorean's endorsement as “the best quiet leader in the industry” is Sperlich, former president of Chrysler Corp. DeLorean recalls that “Mr. Sperlich invented the minivan at Ford.” The Ford chairman vehemently rejected the concept and fired Sperlich, who took his ideas to Chrysler. “The primary reason for Chrysler's rescue after Iacocca took over (an ailing corporation in 1978) was the minivan,” DeLorean says. Sperlich now heads Delco Remy, the automotive electronics supplier in Anderson, IN.

GM is not in a precarious position, but its market share currently sits below 30%. “In my time, our biggest problem was trying to stay below 50% of total U.S. sales,” DeLorean recalls. The Feds were concerned about GM getting too big for the good of the industry. “If I had ever predicted we could fall to 2002 levels, I would have been thought to be insane,” he concludes.

DeLorean calls Cadillac's loss of luxury market leadership a tragedy. The GM division now ranks fourth in the elite arena, outdistanced by Lexus, BMW and Mercedes-Benz. “It was the prestige car forever and ever, and they have done everything possible to screw that up” he says.

“What are they doing now with these novelties? They really have to go back to fundamentals, and I'm sure that Lutz eventually will have to make that a consideration. What Lutz needs to do is find a half-dozen really bright young guys in GM to carry on his tradition. At age 70, he is not going to be there very long. That is the essence of what he is going to have to do.

“It's the same problem with all of General Motors. They simply are not building the kind of cars they should be. Both Toyota and Honda made record profits in 2001 because they stick to fundamentals, mainly quality. Toyota will pass Chrysler in sales in a very short time.

“Honda? What those guys are doing should almost be illegal. For example, they have been beating the emission standard laws almost voluntarily. The Honda Acura engine is so smooth that they have become the finest engine builders in the world,” DeLorean says. He may well know of what he speaks. One of the two cars he now drives is an Acura NSX sports car. The other: a 4.3L V-8 Mercedes-Benz.

While he deplores the decline of Cadillac, DeLorean attacks the demise of Oldsmobile as “outrageous.” “To announce that you are going to discontinue the oldest car line in America and announce it two years ahead of time is unbelievable,” he charges. “Now GM is spending a fortune in advertising to convince people to buy that car. I think that was stupid.

“What I would have done if I had the problem is bring in GM's foreign lines and brand them Oldsmobiles. It would have created a whole new market and also helped their other businesses. It's a total tragedy for a great old name.”

DeLorean doesn't think a revival of the Pontiac GTO would be a success to parallel the Chrysler PT Cruiser. His observation: “The PT Cruiser is a short-term idea, and it is still going on, but the market seems to be getting tight. Primarily, it has a little nostalgia, but the main thing is it is quite a lot of car for the dollar. But, I think you won't be able to give one away within a year.” (His January statement rings true: In early February, DaimlerChrysler announced regional incentives for PT Cruiser.)

For many years, DeLorean and Robert Eaton were on the GM team together. He thinks the Chrysler deal with Mercedes-Benz to create DaimlerChrysler was a smart move. “I think Eaton realized that Chrysler was like a soap bubble and really needed help. It was brilliant for him to pull that off. Mercedes-Benz has no alternative now but to keep Chrysler alive and make it what it ought to be, a pretty good company. It's a long-range program.”

DeLorean thinks GM's long-term problems far outdate Roger Smith and Saturn. “They go back to the time after World War II when Harlow (Red) Curtice ran GM with an iron fist.” He notes: “When Red Curtice retired, the financial guys vowed that they would never again allow a strong (engineering-type) man to be in charge. Basically, they wanted financial people to run the show.

“Well, financial people are like scorekeepers at a baseball game. They are pretty good at keeping score but are not on top of what is happening in the field. A lot of serious mistakes were made. What needs to be done now is re-read the biography of Alfred P. Sloan Jr. His principal plan was the centralization of finances and the decentralization of decision making. That is not happening now. Everything is centralized, and it simply is not working.”

John Z. DeLorean is famous for Pontiac's wide-track tread design, overhead cam engine, windshield antennas and, of course, the GTO. Is the GTO his legend? “I'm not ready to say that,” he insists. “I'm still working on my legend.”

Not Your Typical Auto Engineer

John DeLorean's roller-coaster career ride is well documented. His DeLorean Motor Car Co. (DMC), starting in 1974, toppled after only three years of production (1981-83) yielded less than 10,000 gull-winged sporty 2-seaters in Northern Ireland. At its height, the Belfast plant employed about 2,500.

The Belfast production site sat idle for half a decade after DMC folded, and then was converted to an aluminum casting facility by France's Montupet SA in 1989. It currently employs 1,000 workers making aluminum cylinder heads and wheels.

The production DeLoreans — dubbed DMC-12 — wore a brushed stainless steel, paint-free body on top of a one-piece structural composite underbody. They were powered by a rear-mounted 2.8L V-6 (the PRV engine developed jointly by Peugeot, Renault and Volvo) and offered a Renault-built 5-speed manual or 3-speed automatic transmission. The dealer sticker was $26,000. Perhaps in part because of its unique history, the car is held by some with reverence. For example, a gold-plated DeLorean, one of only two made at the Belfast plant, sits in a permanent, glass-enclosed display at the Snyder National Bank in southwest Texas.

Rumors that the dies for the DMC-12 sit at the bottom of the Irish Sea are somewhat accurate. Dies for the unique stainless steel body panels were sold to a Finnish fisherman to be cut up and used as weights for commercial nets.

DeLorean also is the co-author of a couple of books. The most recent is the 1985 autobiography DeLorean, written with Ted Schwartz. In it he chronicles his experience with DMC, his legal wrangling with creditors and the Feds, the break-up of his marriage to model Christina Ferrare and his born-again religion.

An earlier joint effort, On a Clear Day You Can See General Motors, was penned by Business Week writer J. Patrick Wright and chronicled the DeLorean years at General Motors. DeLorean's attempts to block publication of the book, because he feared it would hinder his attempts at setting up DMC, were fruitless. Wright published the book on his own in 1979.

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