In Print

Brand new car; same old Bricklin

By Kevin Steel ⋅ February 14, 2005 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

The man who got New Brunswick into (and out of) the auto industry has a new vehicle for North America. This time, he swears it will work

Malcolm Bricklin is totally stoked, as the kids might say. On the eve of a big trip, the 65-year-old entrepreneur is raring to go. He is flying from his New York office to meet with business associates at Chery Automobile Co. Ltd. in China, to set up a deal for importing their cars to North America through his new company, Visionary Vehicles. The Chery factory is in Wuhu–“Woo-hoo!” Bricklin cheers, over the phone from Visionary’s New York offices. No wonder he’s excited. He predicts he’ll be able to undercut prices for American, Japanese, even Korean cars by as much as 30 per cent. If his imports catch on, it could make Bricklin a fortune–though it sounds like he’s earning it, judging by his arduous travel plans. “We’re heading out tomorrow,” he says. “I’m flying to Tokyo. Take another plane to Shanghai, another hour-and-a-half to go to a hotel, wake up in the morning and take a seven o’clock train–the only train–to Wuhu, which will take five hours.”

Wait a minute. Five hours? The only train to Wuhu? The future auto capital of China may have a way to go before it’s got the infrastructure necessary to compete with Detroit. But Bricklin, who is putting together US$200 million of investor money to import five Chery models, is convinced that the day isn’t far off. “China is backing them to make sure Chery becomes the number one car company in the world,” he says. That’s a lofty ambition for a manufacturer just barely a year old. Then again, having the full autocratic power of the Chinese state in your corner can be a big help. And if anyone knows a thing or two about importing cheap cars, it’s Bricklin–the man responsible for bringing Subaru, the Yugo and even the eponymous Bricklin–to North America.

The idea sure does have people talking. Unable to put together an official press conference at January’s Detroit Auto Show because every time slot had been pre-booked (he didn’t even have a vehicle to show off), Bricklin held an impromptu media scrum on the floor of the show and by all evidence seems to have generated more ink than the exhibitors with actual product for sale. Forbes, USA Today, Bloomberg News, the International Herald Tribune and dozens of other media outlets were captivated by the story of the coming Chinese import that would do to the auto industry what the millions of other dirt-cheap, made-in-China consumer goods that line the shelves at Wal-Mart have done to every other industry in the U.S. and Canada. In other words–flatten it. The fact that one of auto history’s most colourful promoters was behind it, well, that just made the story all the juicier.

Tim MacCarthy, president and CEO of the Association of International Automobile Manufacturers, based in Arlington, Va., points out that, while he believes more competition is good for the motoring public, there’s a graveyard full of companies that have tried to sell imports in North America–and Bricklin’s been behind a few of them. “If you think about it–in fact it’s one of the reasons for our association’s formation some 30 years ago–the motor vehicle is one of the most regulated elements around. There are all sorts of safety and fuel economy requirements, hoops that have to be jumped through, so it can’t be taken lightly,” MacCarthy says.

In 1968, Bricklin, who got his start in the hardware-store business, was the first to import Subarus from Japan, which are still gaining market share today. That was the Philadelphia-born businessman’s big success.

Then there were the failures. In the early seventies, Bricklin had an opportunity, through a deal with the American Motor Company, to build a V-8 sports car. He convinced the province of New Brunswick to back him, to the tune of $23 million, and began manufacturing the Bricklin, a Corvette-style roadster with gull-wing doors. Leaky doors and myriad other mechanical flaws were part of the reason that only 2,875 cars were produced before the company shut down. But Bricklin blames the province for the flop. “Let me put it this way–and I’ll say it as simple as I could make it: if the car was built in Ontario instead of New Brunswick, the car would still be being built,” says Bricklin today (New Brunswickers only later discovered that in the three years the company was in business, Bricklin had permitted himself a lavish lifestyle and had put several friends and family members–including his mother–on the payroll).

In 1985, Bricklin burst back on the scene when he introduced the Yugo to North America. Built at Zastava Motor Works in Serbia, in then communist Yugoslavia, the boxy compact actually became the fastest selling European import ever in the U.S.–despite being considered among the worst made. Considered unreliable and extremely unsafe, the Yugo sold for only $4,000 before the U.S. slapped an embargo on Yugoslavian imports in 1992. Forbes once called it “an American icon of all things cheap.”

But Bricklin learned a lot from his experience with the Yugo. “That taught me we can do anything,” he says. He set up 450 dealers and made 528 aftermarket alterations to the cars and the factory that made them-“including paving the port and bringing unleaded gas into the country to drive the damn cars onto the ship,” he says–and had the Yugo on the market in 14 months. “Never had a recall. Only car that ever did that,” he says. “And dealers were charging $3,000 over list, and list was $4,000. I made millions from it and I sold out and made millions, and four years later the country happened to blow up and it became against the law to buy. That was the end of Yugo. Not because I didn’t do my job. It was because the country didn’t do their job,” he says.

Bricklin formed the Electric Bicycle Company, based in Oregon, in 1993. Four years later, after failing to find a market for the nearly US$2,000 battery-powered EV Warrior, the company went bankrupt. Investors lost millions and there were more accusations that the financing had gone to support Bricklin’s extravagant lifestyle. Ron Tonkin, now a Honda dealer in Oregon, was an investor in the EV Warrior. He’s reluctant to talk about his loss, saying only: “I would hesitate to get involved in anything that Malcolm Bricklin is involved in. Fool me once, shame on you. Fool me twice, shame on me.”

In 1998, Bricklin’s passion for revolutionary automobile ideas led him to start a company involved in the experimental world of hydrogen fuel cells. Though he sold out after just a year, he did manage, in his short time in the enviro-friendly car business, to meet Maurice Strong, the Canadian Liberal power broker and UN environmental guru (Strong chaired the Rio Earth Summit in 1992, from which was born the Kyoto accord). Strong, now on the advisory board of Visionary Vehicles, is heavily involved in the Chery deal, says Bricklin. “Maurice was asked by the province, the Anhui province, where this factory is, and the people who own it, to please be an advisor to the province,” says Bricklin. “Oh, Canada has a lot to be proud of in Mr. Maurice Strong.”

But even with Strong and the entire Chinese autocracy in his corner, Bricklin faces a set of unique challenges in the wild industrial east. For one thing, Anhui’s Chery operation is currently being sued by General Motors for stealing technology used to build the jellybean-shaped cars.

Last year, Anhui factories were caught making substandard baby formula that led to deformities in 200 infants and 50 deaths. Anhui officials reportedly knew about the fake baby milk for at least 11 months but failed to act. A report from a Chinese dissident publication, The Epoch Times, quoted an area health department manager, Zhao Jianguo, admitting that the province’s hunger for industrial growth at all costs made them turn a blind eye to the dangers. “We loosened the requirements, because of the pursuit for foreign investment,” Zhao said. Anhui Communist provincial party secretary, Wang Taihua, is also the target of a lawsuit filed in Boston last year by practitioners of Falun Gong, a religion outlawed in China, alleging murder, torture and genocide at the Female Labour Re-Education Camp and mental hospitals in the province.

D. J. McGuire, president of China E-Lobby, a Chinese watchdog group based in Washington, D.C., says that history shows Anhui to be a risky place to do business. “These are the people we want to buy cars from?” he asks, though he says he’s not surprised at Bricklin’s choice of supplier, given his previous involvement with the communist regime in Yugoslavia.

But where others see a risk in dealing with autocracies, Bricklin sees opportunity. Compared to the misadventure in New Brunswick, he says, dealing with Beijing is a lot less complicated. “This isn’t the government giving me money to bring jobs into that province and then having to deal with the pressure of a two-party system,” he says. “In China it’s a one-party system. So if the government likes it, there’s no opposition,” says Bricklin. “They’re investing in their own factory and they did it before we got there.” With Visionary bringing US$200 million to invest in cars for export, he says, “we have some legitimate say and we have economic gain. What a good way to have a win-win for everybody.” It sure sounds like an irresistible opportunity to get a piece of a car that could shake up the entire auto industry. Then again, would you expect Malcolm Bricklin to promise anything less?

[This article appeared in the February 14, 2005 issue of the Western Standard.]