Belfast — The 1,100 layoffs announced Jan.28 by the De Lorean Sports Car Company at its West Belfast plant are part of a painful process of adjusting to the economic reality of a world recession.
The company cannot afford to produce more than it can sell in a depressed American market. The British government will not pump in more money any time soon. The layoffs at the Dunmurry plant, which employed 2,600, as well as 50 percent cuts in production, were inevitable.
The project began in 1978 when John De Lorean, a former vice-president of General Motors, clinched a deal with the British government which eventually involved some $180 million of the British taxpayers' money, indirect grants, and guarantees.
There was opposition from a minority of British members of Parliament who questioned the scope of the project. Nevertheless, in a short time a factory was built on green wasteland and the first stainless steel model emerged.
So far De Lorean has built 7,000 cars of a projected 20,000. Some 4,700 have been sold to US dealers but only 3,000 have been bought and registered by customers.
Last year the company abandoned temporarily its attempts to raise funds from the public in the US. With its current credit of $30 million from the Bank of America running out, it turned again to the British government for some $80 million to help tide it over its difficulties.
The response of James Prior, secretary of state for Northern Ireland, was firm. There would be no more money, and a team of financiers, led by top merchant banker Sir Kenneth Cork, was appointed to assess the company and its potential. It is rumored, however, that if the report is favorable, the British might provide some further limited help.
Mr. De Lorean has gone back to America to try to raise more money. But the bad news about layoffs and production cutbacks has been announced to the Belfast work force, in a province were unemployment is already at 19.7 percent.
If the company is to survive, two developments seem essential: gearing production to match the real demand in the US, and a much tighter working relationship between the company and the government. Mr. De Lorean, however, remains doggedly hopeful.