Delorean Motor Company

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  • Topic: DeLorean DMC-12, John DeLorean, DeLorean Motor Company
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  • Published : April 17, 2013
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DeLorean Motor Company

Examining a Business Failure

Michael Smith

Organizational Leadership 531

September 5, 2011

Examining a Business Failure

Stainless Steel. Sleek. Gull-wing doors. Back to the Future. The DMC-12 is one of the most recognizable cars in history. John DeLorean, a former engineer and executive for General Motors, founded the DeLorean Motor Company in October of 1975 (Woron, 1982). DeLorean gained popularity for designing the Pontiac GTO and the Pontiac Firebird. Many thought that John DeLorean was well on his way to being president of General Motors when he left the company in 1973 to start his own automobile company (Woron, 1982). DeLorean needed around $175 million to finance the company, yet only put up around $700,000 of his own money. For the rest, he used over 100 investors to finance his dream, including Johnny Carson and Sammy Davis Jr. (Manning, 2000). He also put over $12 million into a partnership for research and development while the British government produced $156 million in grants and loans in return for DeLorean locating the DMC factory in Northern Ireland (Manning, 2000). The DeLorean factory created over 2000 jobs in an area with high unemployment rates. DeLorean had multiple million-dollar homes and paid himself a large salary. When it debuted in 1981, the DMC-12’s sales could not foot the bill. The sports car had a lot of competition and was priced $8,000 higher than the Corvette (Manning, 2000). In February 1982 the British government shut the factory down, John DeLorean began a drug-smuggling scheme to save his company and was busted by the FBI. John DeLorean’s dream was over and left everyone with no return on their investment. Robbins and Judge (2011) define leadership as the ability to influence a group toward the achievement of a vision or set of goals. Trait theories of leadership focus on personal qualities and characteristics (Robbins and Judge, 2011). John DeLorean had every...
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