Re: [DML] Downfall of the DMC?

["therealdmcvegas" <DMCVegas@xxxx>]

Yes, it is true that the British govt. could have done more *technicly* to save 
DMC. However, there is one thing that is greatly overlooked. The Dunmurry 
plant is NOT DMC, that was DMCL. These are 2 entirely seperate companies. 
DMCL built the cars, but had a structure set in their contracts specifying that 
DMC in North America was to be the sole distributor. Sure, DMCL could have 
been kept afloat and in business, but where would the cars have gone to? 
With the DMC contract in place, the British couldn't have simply taken control 
of the plant. Even if they did, and continued to build cars, where would they 
have gone? Leagaly, they could not bypass DMC's dealer network to move 
the very product that they were building. That is not to say that they are 
entirely blamless. The company could definatly have benefited from the 
proper financing promised for the floorplaning of the vehicles. And a curious 
tidbit of info is of course that Dennis Thatcher (PM Thatcher's husband) was a 
MAJOR stockholder in GM. However, a final offer was given to JZD for 
financing. For this here, let's now take a look @ DMC, and it's role.

Yes, the new party in control was not as willing as the previous to give DMC 
the proper/promised financing it needed/deserved. But there is also an 
understandable reason for this. Checking over things, they were naturally 
worried that DMC & DMCL were both companies that were on the verge of 
closing their doors. Yet at the same time, JZD had just purchased the 
Bedminster estate, Logan Mfg., and invested considerable amouts of money 
into non DMC-12 related projects such as the DMC-80 and others. However, 
in the end, a last-ditch offer was extended to JZD. Put up $20 million, and we'll 
guarantee all future financing. For this, JZD had $10M from the short tearm 
loan out of DC, $5M from the 5th Avenue apt in NY (that his wife refused to 
give up), and the remainder could easily have come from various sources, if 
not real estate holdings he had.

Even if the Govt. didn't give DMC, and DMCL the financing they would have 
needed to stay in business, they may not have needed it at all. DMC is not 
without it's own mistakes. Easiest thing would have been for the company not 
to have made all the aformentioned purchases, and spending of money. 
However, as I have heard before, the biggest problem with sales stateside 
wasn't because of a lack of interest from the buying public. The car was very 
popular, but most people couldn't buy it. Not because they couldn't afford it, 
but because not many conventional finance companies would front the 
money for it. You either needed cash, or you needed to bring your own 
financing. The doubling of car production in '81 didn't help any, but it was a 
gamble taken. It didn'y pay off, but it could have. It's goal was to produce more 
cars to sell to turn a profit, and to create wealth for the company by creating a 
larger inventory of cars that they owned. This would make DMC more 
attractive to investors. Instead, this gave the company a bad image that they 
were producing cars that no one was buying. A better solution would have 
been to provide internal financing for all vehicles. The same way that GMAC 
does for it's cars. That way, a profit would have been made on both the selling 
of the cars, and on the loans made to pay them off. Include this with the fact 
that the company would still have retained ownership of the vehicles durring 
the terms of the loans, and this would have killed 2 birds with one stone, 
without the overhead. It's even possible that they may have still increased 
production, and then have been able to sell those cars much quicker.

There are many more factors involved in both the success of the company, 
and it's demise. There is no way that a single post could cover them all. A few 
books have been written, and not even they have touched them all. But even 
from this here, you can see that there really isn't one thing at all that solely 
caused the demise of DMC. Unless of course you want to count in Murphy's 
Law. It certainly seemed that almost everything that could go wrong, did.

-Robert
vin 6585 "X"



--- In dmcnews@xxxx, Robert Greenhaw <deloreandude@xxxx> wrote:
> Hi Everyone,
> 
> I must agree with David...there is too many factors against
> the British government that they could have changed.
<SNIP>