Driven Out of Business: The DeLorean Motor Company

A DeLorean car with the doors open.

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“Wait a minute, Doc. Are you telling me you built a time machine out of a DeLorean?” 

You may recognize this line from the film “Back to the Future.” But if you didn’t see it in theaters, you missed out on the car’s heyday. 

Despite the automaker going out of business, the DeLorean legacy lives on in the present day. So, what’s the story? 

Who Is John DeLorean?

The DeLorean Motor Co.’s roots go back to the mid-1970s, when John DeLorean founded the company in 1975 in Detroit. Southeast Michigan is known for automakers like Ford and General Motors (GM), and that’s where John rose through the ranks. 

In 1956, DeLorean joined General Motors in the Pontiac division as an assistant to the chief engineer. He spearheaded the creation of iconic vehicles while there, such as the Gran Turismo Omologato (GTO). DeLorean’s popularity inside and outside the automotive industry grew. He joined the ownership group of sports teams like the New York Yankees and the San Diego Chargers.

By the early 1970s, DeLorean switched to the Chevrolet division. That’s when he and GM executives began to clash. He left GM in 1973 and had his company running two years later. He used his stardom to attract investments from celebrities such as Johnny Carson, Sammy Davis Jr. and Roy Clark.  

The DeLorean Motor Co. began constructing its first plant in 1978 in Northern Ireland and wanted production to start in 1979. However, delays with the engineering and budget cuts put the plans off schedule. As it turns out, the beginning signified trouble the rest of the way for DeLorean’s company. 

A DeLorean car on the street with the doors open.

Why Did the DeLorean Motor Company Fail?

The fall of the DeLorean Motor Co. came as fast as its rise. The failure stems from two different fronts. First, the company had a rough time staying afloat. By 1981, the first DeLoreans arrived in the United States. However, interest in this vehicle and others tapered because of the recession. 

Many manufacturers had a large inventory of unsold cars due to economic conditions. However, the auto company decided to build more cars instead of scaling back production. This decision led to a poor financial state for the company, and it unsuccessfully sought assistance from the British government. 

The DeLorean Motor Co. filed for Chapter 11 bankruptcy in 1982. In October of that year, U.S. prosecutors charged the owner of the company with drug trafficking after catching him in a sting operation. Agents recorded him agreeing to fund an operation that smuggled cocaine. However, DeLorean and his attorneys beat the charges by arguing that the FBI and DEA had entrapped and unfairly targeted him. 

The trial ended in August 1984, with the jury finding him not guilty. However, by this time, the automotive company had already collapsed. DeLorean’s reputation went down the drain, and his time in the spotlight was over.   

What Is the DeLorean Famous For?

DeLorean’s name brings to mind one movie franchise, “Back to the Future.” The DeLorean Motor Co. went out of business in 1982, so why did the filmmakers still use this vehicle? In the movie, Doc says he needs the DeLorean’s stainless steel for his time machine because it helps with temporal displacement. Also, Marty insists on using a stylish car for his time-traveling adventures.   

“Back to the Future” is how most people know the car, and most subsequent references to the vehicle pay homage to the movie franchise. For example, in the video game Lego Jurassic World, you can see a DeLorean at a dig site with a character holding the OUTATIME license plate. 

The video game Grand Theft Auto V has a plethora of pop culture references, and one of them pays homage to the car. Rockstar created the Deluxo based on the DeLorean DMC-12. You can also find the Deluxo in Grand Theft Auto: Vice City and Grand Theft Auto: Vice City Stories.

Are DeLorean Cars Still Around Today?

The original DeLorean Motor Co. went out of business in 1982. However, the cars still exist, and new editions may be coming soon. In 1995, Stephen Wynn, a mechanic from the United Kingdom, founded the DeLorean Co. in Houston, Texas. It has no affiliation with the original automaker, but it does service DeLoreans and restores these vehicles with aftermarket and replacement parts.

In 2007, the new DeLorean Motor Co. began selling refurbished vehicles because of popular demand. Nowadays, there have been discussions of producing new version of the car. In May 2022, the company announced plans for the Alpha5, a battery-powered electric sports car. The company plans for limited production to begin in 2024. 

The DeLorean: A Rapid Rise and Fall

The DeLorean Motor Co.’s fame lasted for less than 15 minutes. However, its legacy is alive thanks to the “Back to the Future” franchise. John DeLorean was a rising star in the automotive industry and even created celebrity status for himself.

However, poor decisions led to a sharp downfall of what would be one of the most iconic cars in American cinema history.

The back of a DeLorean car.

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