Wheeler-dealer

HOW MR. BRICKLIN GOT HIS DREAM CAR AND MR. HATFIELD GOT THE BILL

Michael Enright November 17 1975

Wheeler-dealer

HOW MR. BRICKLIN GOT HIS DREAM CAR AND MR. HATFIELD GOT THE BILL

Michael Enright November 17 1975

Wheeler-dealer

HOW MR. BRICKLIN GOT HIS DREAM CAR AND MR. HATFIELD GOT THE BILL

Michael Enright

For an instant, it is the Girl, the Car and Everything. A demonstration of whirling imagination played out in front of the microphones and notebooks of the newsmen in somebody’s sound studio in downtown Toronto. First the Girl. Her name is Colleen. She is from Arizona, but looks more like Newport Beach, California. Beautiful and sexy and wholesome, but above all wholesome. She has a pound of sand-drift hair that falls just right, framing what is, quite simply, a perfect face. She has a smile that would give a monk diabetes. Teeth like a bowl of Chiclets. The body is everything a body ought to be. Perhaps twice during the entire press conference has she taken her eyes off Malcolm Bricklin’s face. She is Malcolm’s companion. From Arizona. Now the Car. Really only a color picture of the car behind Malcolm’s woolly head. The Bricklin, like the Girl, is beautiful and sexy and above all wholesome. The little man’s dream car, the gull-winged beauty that was supposed to take your Chevy inclinations and turn them inside out. A safety car that looked like a Corvette. The car that Malcolm built, born of the wigged-out enthusiasms of this Philadelphia Wunderkind who took his dream to New Brunswick, which, until 1973, he thought was a town in New Jersey or a company that made bowling balls.

Now, surrounded by 25 or 30 newsmen (“The New York Times is here,” somebody says), Malcolm is trying to explain why the company that built his dream car is in receivership. His dress is managerial hip, tight cutesybum pants, print sports shirt, boots and a Bricklin belt buckle with the gull-wingedcar embossed in hammered silver. He exudes confidence, Mark Spitz good looks all in place. The gaze is straight and honest. This guy could run a Welcome Wagon on Death Row. In some people there is a quality of speech and movement that goes beyond grace. It is fluid, like a patch of oil trailing across a pane of glass. Not ease so much, not even articulation. It is the quality of Smooth, and Malcolm Bricklin has it. Malcolm is as smooth as a kitten’s wrist.

The reporters are giving him a going over on the receivership thing. Malcolm says he could be bankrupt tomorrow. Personally broke. With nothing to his name but five dairy cows and two dray horses, as set down by Arizona law. Five dairy cows. Two dray horses. Since Malcolm Bricklin first heard of New Brunswick, people have put $23 million into his dream car. Now the chances are that his company is going down the toilet, and with the aplomb of a golf pro he sits there and talks about dray horses and dairy cows. Vintage Bricklin. Smooth. But we can’t say we weren’t warned. Malcolm himself once told the world: “My textbook is the seat of my ass.” Here, at this press conference, reporters are aglow with questions about the future of his ass and our money.

“Oh, the Bricklin, Oh the Bricklin/Is it just another Edsel/ Wait and see. We’ll let the Yankees try it/And hope to God they’ll buy ill Let it be, dear Lord/ Let it be”—Charles E. Russell, from his New Brunswick hit song, The Bricklin.

At his own press conference a week later in Fredericton, Richard Hatfield looks bored. Or tired. He wants to talk about his two-week trip to Japan where he has been seeing Japanese investors about New Brunswick. The reporters are more interested in the Bricklin situation. The Premier is a bit uneasy. In his three-button lightblue suit, white shirt and club tie, he looks every inch a Premier. In fact, with the exception of Ontario’s Bill Davis, Hatfield looks more like a Premier than any one of the other nine. He has a pudgy, somewhat jowly face. At 44 he is politically successful and rich. The money is from potatoes. Essentially a reclusive man, it is said he hates to have his picture taken. And it is apparent he is hating his press conference.

He plods through a lengthy statement about the Japanese trip, rarely looking up from the text. He has some trouble with the names: “Two large trading companies, Matsu ... er. Mootsibas ... ah, Mitsi . . . Mitsubishi.” The tension is broken somewhat when a nervous reporter calls him “Mr. Bricklin.” Hatfield smiles and says: “We know where your mind is.” All he will say, in fact, about the Bricklin affair is that his people are talking to investors in Toronto to see if they will take over the company. He won’t name the investors or talk about the terms, though one thing is apparent from his tone: Bricklin and Hatfield are now something less than good friends. Malcolm says he has made more than 40 calls to the Department of Economic Growth and wants a meeting with the Premier. Hatfield says rather coldly: “He knows if he wants to contact me, he can.”

There has been no contact between the two men sin,ce receivership on September 26. Which was a bad day for both of them. Cynics from one end of the country to the other crowed that they had been right, that the thing would never work in New Brunswick-of-all-places-for-God’s-sake. More than 700 hardworking men and women who put the car together were out of work. Critics were saying Hatfield had played fast and loose with the public purse. The Opposition wanted his head. What a lot of people forgot was that the car had actually been built, 2,800 of them had rolled off the assembly line in Saint John, and when you turned the key the thing started. Both men, Bricklin and Hatfield, were prisoners of their own dreams. Bricklin dreamed of a safe, snazzy sports car with his name on it, with off-the-shelf parts and a standard engine to keep costs down. Hatfield dreamed he could finally manage a Maritime province away from the image of wood hewers and water drawers.

Malcolm Bricklin was born to hustle. He sees himself as a man whose job is to push, promote, hype, juice, goose, inflate, mesmerize and sell, baby, sell. “But remember,” he says, “you can sell anything once; to sell it twice you have to prove you have something to sell.” So he picked cars. Never mind that since the Second World War, 150 independent car companies have been formed and all but two—Lotus and Porsche—have gone broke. Malcolm did not want to wind up another Preston Tucker, he of the Tucker Torpedo which sold 47 cars before collapsing in the late Forties. Malcolm’s car would be different. Its styling, for one thing, was superb. People talked about it. And it was safe. Occupants sat surrounded by a solid steel frame to which was attached a steel roll bar. The body was made of acrylic with a fibreglass underlining which meant it would never rust. It was comfortable to drive, a bit noisy perhaps, but it was unique. Besides, Malcolm had a record of some success. A dropout from the University of Florida (“I majored in time and space”) Bricklin opened a chain of drive-in hardware stores called Handyman America Inc. He sold his interest supposedly for one million dollars (although his enemies say he didn’t make six cents on the deal and he won’t say) before he was 25. A year later Handyman went broke. He then decided to help Innocenti Ltd. of Italy unload 30,000 Lambretta motor scooters in the United States. He got the brilliant idea of selling them to police departments. It worked, the cops bought them, and Malcolm made a lot of money. As he did when he took over the American distributorship of the Japanese car, the Subaru. It was the Subarus that put him in mind of a class car called the Bricklin. “Here I was selling a car that looked like everyone else’s with a name no one could pronounce and I went into the top 10 out of 33 importers. So I knew it was possible to sell limited quantities of a special kind of car, I was doing it.” Malcolm was making money, living well in Arizona, but he still wanted to build his Bricklin. So he started looking. In late 1971, Malcolm found Canada.

In 1972, Malcolm tried to interest Quebec in a car company. Quebec sniffed at the idea because the terms were too favorable to Bricklin. So he looked farther east and saw Hatfield's New Brunswick. In the spring of 1973, when the two men met each other for the first time, Malcolm had a clay prototype of the car and little more than a concept. He was intrigued by Hatfield’s suggestion of government support and delighted by the prospect of financial backing from the Department of Regional Economic Expansion in Ottawa. DREE, however, was slow in coming through, and Hatfield was anxious for Bricklin to move to New Brunswick. (In an industry-poor province with 1% unemployment, time is an important factor.) Hatfield decided to move on his own. New Brunswick paid $500,000 for 765,000 shares of Bricklin Canada Ltd., and authorized a $2.88-million loan guarantee from the Bank of Montreal. Bricklin’s end was supposedly the design and development rights to the car with a book value of one million dollars. Under the original agreement, the cars would be pre-sold to Malcolm’s holding company. General Vehicle Inc. of Delaware. GVi would be allowed to repurchase the Bricklin shares from the province. Under a weird royalty plan. Bricklin Canada would pay to the province $31.25 on each of the first 40,000 cars and $62.50 on each of the next 180,000 cars. No royalties have been paid so far.

Bricklin set up in a onetime paint brush factory in Saint John and work started on building an assembly line. Production was to begin in March, 1974, at the rate of 1,000 cars a month. Bricklin now admits he was “100% wrong” in his prediction. Six months later, by October, production was barely 10 cars a day. Because of the attention he was getting in the media, Bricklin was under heavy pressure to get his cars built. He began spending money, huge gobs of it. Just over a million dollars went for production equipment, half a million for plant tooling; manufacturing processes took up three quarters of a million. By May, 1974, he needed more money. Hatfield announced more financing: $1.2 million from New Brunswick, three million dollars from First Pennsylvania Bank and a three-million-dollar loan from DREE.

Meanwhile, General Vehicle had been lining up dealerships in the United States, 220 in the Northeast who paid $5,000 for the right to sell it. In the early days of the operation, dealers were delighted with the Bricklin. One man in Augusta. Maine, said in 27 years as an auto dealer he had never seen as much excitement about a new car. In fact, it looked as if Bricklin would be oversold on its first year’s production.

Because of the rush to produce a lot of cars, the quality began to slip. Headlight covers kept falling off, panels didn’t fit tightly, water backed up in the heating system, weather stripping around the doors let in rain. Still the dealers were scrambling for more cars. In October, 1974, New Brunswick made a “shareholders loan” of two million dollars in exchange for increased royalty on each car sold. It also acquired more shares in the company, raising its equity to 67%. November was election month in New Brunswick. Premier Hatfield campaigned in a Bricklin with the slogan “You gotta believe.” But that’s not all he did. On November 6, two weeks before the election, he passed an Order In Council for payment of one million dollars “for the purpose of making an investment in New Brunswick.” The “investment” was to keep the sheriff from foreclosing on Malcolm’s Saint John plant. On November 13, five days before the election, he passed another order for one million dollars “for the purpose of investing in an industry in New Brunswick.” It wasn't until after the election, in which Hatfield won 33 of the Legislature’s 58 seats, that the “industry” named in the order was known to be Bricklin Canada. Hatfield says it is the practice in New Brunswick to announce grants in the Royal Gazette without naming the industry because the terms of the financing might still be under negotiations.

In December, another $2.5 million was given to Bricklin and in January Hatfield announced another $7.5 million, bringing the total of federal and provincial money to $23 million. In the meantime, Malcolm announced that Ralph Henry had been appointed president of Bricklin Canada, a position once held by Malcolm’s father, Albert, at $30,000 a year. Henry had no background in automobiles, but he was known to be a car buff. He was also a vicepresident of First Penn Bank, and First Penn Bank was worried about its money. It is now clear that Henry was installed as president only to oversee First Penn’s investment. Bricklin was having problems keeping its production up to the breakeven point of 22 cars a day, and Malcolm was pressured into raising the selling price of the car. At first he resisted. After all, it had been his dream to sell the car for less than $5,000. But the price had to go up. Last winter, General Vehicle Inc. had been buying Bricklins for $5,700 and selling them to dealers for $6,600. The dealers were selling them for $7,800. Ultimately the selling price went to $9,980. Auto experts said the car should have been sold for $15,000 apiece in the first place.

By June of this year, the money was drying up. Malcolm was being squeezed by his creditors; his interest payments alone ran to $300,000 a month, not counting overhead, labor and materials to build the cars. Malcolm said publicly he needed more provincial money to keep the project going. Some Hatfield cabinet ministers were showing signs of depleted enthusiasm. People were complaining about incompetent management at Bricklin. Finally, Hatfield decided the province could not comply with Malcolm’s request for another $ 10 million in aid, and on September 26 he put the company into receivership. Malcolm was told about the receivership 15 minutes before it happened.

“Hindsightwise,” says Malcolm without wincing, “the receivership decision doesn’t look like a brilliant one.” He is looking tired this morning, sitting in the breakfast lounge of the Hyatt Regency in Toronto. He has just flown in from Phoenix with the lovely Colleen. The Hyatt Regency is not where broke people stay, but Malcolm would rather spend his last hundred on a good hotel and a good meal than go second class. He eats sparingly, some chicken soup, a salad. He doesn’t drink or smoke. He is in Toronto to talk to reporters. He will do television interviews, radio talk shows, press conferences, anything to get his message out. Malcolm uses the media the way the rest of us use churches, a device to turn to in times of trouble. Now he talks about receivership. “It’s so bad to be put into this position we’re in now. The very people who made it possible are now the same people who have to take responsibility for what’s happened—the New Brunswick government. There’s no way I can knock them. It took tremendous courage to go as far as they did. I mean we’re dealing with people who really care about the car, make no mistake on that.” Malcolm cares about the 240 or so cars sitting outside the Saint John plant, seized as company assets. They represent $2.5 million in sales.

Hatfield, for his part, has kept a low profile since receivership, so low he is developing callouses on his chin. No, he hasn’t talked to Bricklin. No, he won’t discuss moves to save the company. No, he doesn’t know of any U.S. investors. No, he won’t release company documents. Part of Hatfield’s problem has been this penchant for secrecy. He has time and time again refused to give the Liberal Opposition such things as minutes of stockholders’ meeting, contractual agreements with General Vehicle or security arrangements with First Penn Bank. To do so, Hatfield argues, would scare off potential investors who like to keep their transactions quiet. Nevertheless, his refusal to talk leads to the conclusion that Bricklin was for the most part a one-man show. For instance, the province’s industrial development corporation was completely bypassed on Bricklin. Hatfield and his Conservative cabinet have had a running battle with the development corporation for years now, mainly because the corporation’s members were appointed by the previous Liberal regime of Louis Robichaud. But without the development corporation, as John Turnbull, Bricklin critic in the Liberal Opposition, points out, there was little in the way of provincial input into the decision to support Bricklin. Hatfield’s reticence has also done little to end speculative questioning. How much money did Bricklin Canada make from the 2,800 cars built and sold to GVI? For that matter, how much have GVI and Malcolm made since 1973? Why did Bricklin executives run up $412,061 in special travel expenses in less than two years? How much money did Malcolm himself put into the design of the car, or did New Brunswick pay for its development?

Hatfield must have an explanation. Malcolm has. “What went wrong? Well, a lotof mistakes were made starting with myself and management, then the province, then the banks. First of all, I underestimated how much money was needed to begin with, that’s a wrong. I underestimated how much volume we’d be able to build, that’s a wrong. I underestimated how much engineering had to be done, that’s a wrong. On the right side, we finally did get our volume up, we did figure out the money that was needed and we did get our engineering straightened out. The one thing we did right was that we didn’t underestimate the market.”

Malcolm says he has U.S. investors who would put up $20 million provided the government reduced its equity and let the businessmen run the business. He’s been asking for a meeting with Hatfield, federal officials and himself to sort it out. So far he’s been getting a busy signal. While the prospect of going bankrupt might unnerve some people, it doesn’t faze Bricklin. “When you’re bankrupt, they doift take your head away from you, they only take your money.”

Now the principals in the affair are waiting, like men on a baseball diamond, for someone to throw the ball. Richard Hatfield is waiting for someone with money, a winning smile and the personality of St. Francis of Assisi to phone him. John Turnbull, the Bricklin critic, is waiting for the Legislature to open for the winter session because this time, maybe, the members opposite will listen to him. The 700 people who worked to put the Bricklin together are waiting for either a new job somewhere or word that the company can be saved. And Malcolm? Malcolm waits for the receivership report from Clarkson and Co. to tell him if he is another Ferdinand Porsche or a Preston Tucker, whether he is rich or broke. While he waits, he is philosophical. “Although very few people had heard of New Brunswick before we got there—and it’s been around a long time—there are very few people in the Americas who have not heard of New Brunswick now.”