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Speaker 1: Pushkin too quick. No, it's perfect push kit stuff. You

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Speaker 1: got it.

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Speaker 2: This is a very exciting moment in podcast history. Cautionary

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Speaker 2: Tales x business.

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Speaker 3: History giants come together.

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Speaker 4: This is epic. This is very exciting. Can't we say

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Speaker 4: business history versus cautionary tales? That I feel like that's

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Speaker 4: is that like a nineteen nineties thing?

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Speaker 2: Tim Harford, Robert Smith, Jacob Goldstein. This is cautionary.

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Speaker 5: Tales and business history together.

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Speaker 4: In the same studio. Well, kind of not, but it'll

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Speaker 4: have to do so.

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Speaker 5: Tim.

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Speaker 2: We have a rule at Business History, and it is

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Speaker 2: a rule I just made up, but I think it's

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Speaker 2: a good rule. And the rule is if, at any

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Speaker 2: point in the story the protagonist is captured on video

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Speaker 2: in a hotel room with a bag full of cocaine,

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Speaker 2: that is the scene we have to start with. Will

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Speaker 2: you do us the honor of starting with that scene?

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Speaker 2: Let's do it perfect. It's October the nineteenth, nineteen eighty two.

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Speaker 2: John Delorian walks into room five oh one of the

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Speaker 2: Sheraton lorraina hotel in Los Angeles. Delorian's tall and handsome six',

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Speaker 2: four silver hair shirt and, tie and he's in room

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Speaker 2: five oh one because he's trying to save his life's.

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Speaker 2: Work the car that has his, name The, DeLorean And

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Speaker 2: tim And. Robert maybe this is the same for you.

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Speaker 2: Guys ME i remember this car for one.

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Speaker 5: Reason it was in the Movie back to The, future

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Speaker 5: yes eighty.

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Speaker 3: Famously if you know one thing about A, delorian it

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Speaker 3: might be that it's, silver stainless, steel and it has these.

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Speaker 5: Doors they don't open, out they open.

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Speaker 2: Up they're called goal wing doors because it looks like

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Speaker 2: a goll in.

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Speaker 5: Flight And delaurien himself is an interesting.

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Speaker 2: Guy like a decade before, this he had been on,

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Speaker 2: track probably possibly to become the president Of General motors OF.

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Speaker 5: Gm but by nineteen eighty, two his company's in.

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Speaker 2: Trouble sales are, low debts are, high And John delaurian

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Speaker 2: is about.

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Speaker 3: To lose control of his.

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Speaker 2: Company and one day his friendly neighborhood drug dealer offers

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Speaker 2: him an opportunity put some money up front and get

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Speaker 2: in on a cocaine deal that could net millions of.

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Speaker 3: Dollars in profits and save the, company and save the.

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Speaker 2: Company and so On october, Nineteenth John delorian walks into

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Speaker 2: room five oh, one sits down in a comfortable. Chair

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Speaker 2: he doesn't know, it but there is a video camera

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Speaker 2: hidden in the, room so you can actually see what happens.

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Speaker 5: Next it's on.

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Speaker 2: YouTube the world will see it. Soon as a bag

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Speaker 2: of some, sort maybe it's a, suitcase maybe it's a.

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Speaker 2: Briefcase puts it on a coffee table in front Of

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Speaker 2: doloreian opens it up to reveal fifty or sixty pounds of.

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Speaker 2: Cocaine make sure you orient it toward the hidden, camera

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Speaker 2: And delorian in the, video leans, forward lifts up a bag.

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Speaker 5: Of cocaine in from the suitcase and he. Laughs Hees harvord.

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Speaker 4: Bets and then. Gold he, says gold weighs more than.

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Speaker 5: That.

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Speaker 2: Oh and then there's a shot Where delurian and three

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Speaker 2: other guys are around the same coffee, table and now

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Speaker 2: they're raising their glasses in a, toast And delorian, says.

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Speaker 4: Here's to a lot of success for.

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Speaker 2: Everybody sometime after, that there's a knock at the. Door

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Speaker 2: two men in suits walk. In one of them, says,

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Speaker 2: Hi John Jerry WEST. Fbi you're under arrest for narcotic smuggling.

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Speaker 5: Violations could you stand up.

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Speaker 2: Please delorian stands, up and the agent Puts dolorian's hands behind.

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Speaker 5: His back and puts handcuffs on.

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Speaker 1: Him.

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Speaker 4: Wow.

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Speaker 2: Tim we were working on This delorian story and we

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Speaker 2: decided it would be the perfect crossover with cautionary tales because,

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Speaker 2: cocaine for one. Thing it's a great rise and, fall

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Speaker 2: a lot goes. Wrong there's a compelling, protagonist there's a

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Speaker 2: car that was made famous in a.

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Speaker 5: Movie i'm, sold let's. Go let's go, now room.

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Speaker 3: ROOM i didn't even mention the Industrial, Paul, yes so Good.

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Speaker 2: Tim there's another rule At Business, history which is at

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Speaker 2: this part of the, show we say the protagonist's, name

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Speaker 2: and we say the middle name.

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Speaker 5: When they have.

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Speaker 4: ONE i like these.

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Speaker 2: Rules John Zachary delorian was born in nineteen twenty five

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Speaker 2: in a small house near the railroad tracks In, detroit

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Speaker 2: which is in A united state Called.

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Speaker 5: Michigan, Tim, YEAH i heard of. It you've heard of.

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Speaker 4: It, cars, right they, did cause that.

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Speaker 5: Cars a lot of.

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Speaker 2: Cars in, Fact delaurian's own father was an immigrant who

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Speaker 2: worked at the foundry At. Ford When delorian was, ten

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Speaker 2: his dad bought him an old model t That delorian

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Speaker 2: would take apart and put back. Together that's the Way

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Speaker 2: delaurian told the. Story as we'll, hear he is a

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Speaker 2: somewhat unreliable, narrator and he eventually got a job in

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Speaker 2: The pontiac.

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Speaker 5: Division At General MOTORS.

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Speaker 3: Gm and the whole thing ABOUT gm is there were

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Speaker 3: all these different divisions and each one was a different.

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Speaker 3: Brand and we talked about this in our show about

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Speaker 3: HOW gm Beat Ford in the nineteen. Twenties The chevy

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Speaker 3: was Basic american all purpose. Car then you had The

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Speaker 3: cadillac obviously for your, grandfather rich, guy and The pontiac

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Speaker 3: was the car your grandmother, drove practical mid sized. Car

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Speaker 3: it wasn't very. Popular there was talk of shutting down

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Speaker 3: The pontiac.

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Speaker 2: Forever, yeah the whole division was, like MAYBE gm would

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Speaker 2: just get rid of. It and the people At pontiac

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Speaker 2: are trying to think about how to save the, division the,

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Speaker 2: brand and they know that there is this demographic wave

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Speaker 2: who will soon be named the baby, boomers who are

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Speaker 2: about to grow up and start buying, cars and so they, think,

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Speaker 2: okay what do what do kids want in a?

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Speaker 4: Car they wanted to go, Fast they didn't want grandma.

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Speaker 2: Cars they don't want grandma's, Car and so they start

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Speaker 2: putting big engines in, cars and in, fact sales start

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Speaker 2: growing And delorean's getting promoted and he wants to push

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Speaker 2: this fast car strategy. Farther and one day he and

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Speaker 2: his colleagues have this have this kind of eureka. Moment they, say, well,

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Speaker 2: okay we've been putting big engines in big cars and

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Speaker 2: they go fast and small into the small, cars some

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Speaker 2: small engines and small. Cars what if we put a

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Speaker 2: big engine in a medium sized, car then it would

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Speaker 2: go really.

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Speaker 5: Fast but there is a problem with this.

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Speaker 2: RULES gm had, rules and one of the rules was

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Speaker 2: you can't put a big engine in a medium sized

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Speaker 2: car because then it goes too fast and it's too

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Speaker 2: much like a race. Car AND, gm which among other

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Speaker 2: things is afraid of anti trust, action actually doesn't want

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Speaker 2: to be seen to be making race.

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Speaker 3: CARS i love the image of the guy in THE

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Speaker 3: gm suit being, like it's too. Fast.

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Speaker 2: Good So, delorian a man who as we'll, see doesn't

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Speaker 2: love a, rule finds a. Loophole and the loophole is,

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Speaker 2: This this rule about big engines in smaller cars only

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Speaker 2: applies if you want to build a new. Model but

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Speaker 2: if you just want to make the big engine an

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Speaker 2: option on an existing, model there's nobody to say. No

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Speaker 2: so that is What delorian, does and that is why

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Speaker 2: in the early sixties you.

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Speaker 5: Could have your.

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Speaker 2: Choice you could buy the regular nineteen sixty Four Pontiac

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Speaker 2: tempest for your, grandmother for your, grandmother a very reasonable

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Speaker 2: car grandmother can drive to the store and. Back or

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Speaker 2: for another three hundred, dollars you can get your grandma's

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Speaker 2: car with a really BIG v eight engine in, it

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Speaker 2: basically a racing engine hiding inside your grandma's. Car And

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Speaker 2: delaree himself comes up with a great name for this,

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Speaker 2: model for this. Option he takes it From Ferrari Gran turismo. Omologato,

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Speaker 2: tim how is My? Italian sounds okay to?

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Speaker 5: Me, okay well you know what everybody here just called it?

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Speaker 3: Gto oh little.

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Speaker 5: Gto, yeah there was actually a, song, Right there was.

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Speaker 3: A famous song back then called Little. Gto AND i

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Speaker 3: thought it was just a song saying how awesome THE gto.

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Speaker 3: Was it turns out it was kind of a an

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Speaker 3: ad for the cover.

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Speaker 5: So sort of said.

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Speaker 2: That there was this like famous marketing guy who at

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Speaker 2: least says he had some input into, it like he

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Speaker 2: told the guy like mention some of the features of the.

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Speaker 5: Car, whatever four on the, floor, Whatever.

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Speaker 3: Well this is part of the beach boy imitation, era

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Speaker 3: where you could just pick out a product and sing

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Speaker 3: about how cool it was at the beach and that

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Speaker 3: was pop.

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Speaker 5: Music so The gto was a. Phenomenon The Pontiac.

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Speaker 2: Gto you could argue that it was the first Great

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Speaker 2: american muscle. Car it was wildly, popular and it Made

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Speaker 2: DeLorean a. Star and this is really the moment his ascent,

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Speaker 2: begins and he rises to become the head Of pontiac

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Speaker 2: and he keeps going. Up now he's the general manager Of,

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Speaker 2: chevrolet the biggest brand AT, gm and then he goes

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Speaker 2: all the way up to the fourteenth floor Of General motors,

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Speaker 2: headquarters where it becomes vice president of all cars And

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Speaker 2: trucks FOR. Gm he's a man rising fast and yet

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Speaker 2: and Yet delaurien didn't really fit in AT. Gm SO

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Speaker 2: gm at this time was this like giant bureaucratic corporation

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Speaker 2: based in the middle of the. Country it was run by,

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Speaker 2: boring reliable men in dark.

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Speaker 3: Suits white, shirts skinny, ties.

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Speaker 5: And delaurian just didn't like all these. Rules why WAS

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Speaker 5: gm like?

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Speaker 4: This why was it more like a machine full of

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Speaker 4: cogs than an entrepreneurial? Organization and the answer is by.

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Speaker 4: Design this was. Deliberate so decades, earlier there had been

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Speaker 4: a CELEBRATED gm, President Alfred. Sloan he had TURNED gm

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Speaker 4: into this efficient corporate. Machine he was one of the

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Speaker 4: inventors really the modern. Corporation and he was super, successful

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Speaker 4: very widely. Admired loads of people copied. Him businesses all

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Speaker 4: around the world adopted the same structure and the same

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Speaker 4: kind of processes AS. Gm they were run by managers

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Speaker 4: who loved, rules Like, jacob they love. Committees you two guys,

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Speaker 4: said not a, committee and it just wasn't an entrepreneurial

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Speaker 4: era at. All and in Comes. Denorian my other.

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Speaker 5: Things he wore gans to. Work who does?

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Speaker 3: That he's like a baby boomer, Hero he.

200
00:10:04,920 --> 00:10:07,760
Speaker 5: Is like a baby. Boomer hur he's too always is

201
00:10:07,760 --> 00:10:10,640
Speaker 5: that a? Problem i'm we're in shorts. Him i'll tell

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00:10:10,640 --> 00:10:13,720
Speaker 5: you the. Truth let me stand, up don't make me stand.

203
00:10:13,800 --> 00:10:16,600
Speaker 4: Up it's warm here today In. Oxford i'm not wearing

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00:10:16,640 --> 00:10:19,040
Speaker 4: anything below the. Waist but you, know nobody needs to know.

205
00:10:19,120 --> 00:10:20,760
Speaker 5: That So delourian's wearing.

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00:10:20,840 --> 00:10:24,280
Speaker 2: Jeans he dyes his, hair he gets a face, lift

207
00:10:24,320 --> 00:10:28,040
Speaker 2: he starts actually putting his face in print ads next

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Speaker 2: to the. Cars he gets bored of Boring detroit and

209
00:10:31,240 --> 00:10:33,920
Speaker 2: starts going TO la and hanging out with movie, stars

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Speaker 2: going to clubs and. So somewhere around the time he

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Speaker 2: gets promoted up to you, know vice president OF, gm

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00:10:40,360 --> 00:10:43,760
Speaker 2: he gets. DISILLUSIONED i don't know why he's living the.

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00:10:43,800 --> 00:10:47,640
Speaker 2: Life it's, true it's. True, well so he tells a

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Speaker 2: journalist about what was going on with him a few years, Later,

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Speaker 2: tim you want to read to us From delorean's own

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Speaker 2: description of his feelings at this, Time.

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Speaker 4: I'll spare you The michigan, accent, though he, said my

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Speaker 4: concern was that there hadn't been an important product innovation

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Speaker 4: in the industry since the automatic transmission and power steering

220
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Speaker 4: in nineteen forty. Nine in the place of product, innovation

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00:11:09,000 --> 00:11:12,720
Speaker 4: the automobile industry went on a two decade mark binge

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00:11:13,040 --> 00:11:15,800
Speaker 4: which genuinely offered up the same old product under the

223
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Speaker 4: guise of something new and. Useful this was an indictment

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Speaker 4: of myself as well as my fellow auto.

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Speaker 2: Executives so this Is delorian explaining, why in nineteen seventy

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Speaker 2: three he. Quits he quit his job as vice president

227
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Speaker 2: Of General, motors which is not something people did at the.

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Speaker 4: Time.

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Speaker 5: Right at least That's delaurian's version of why he.

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Speaker 3: Quit, Yeah i'm too creative, Too.

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Speaker 5: Yeah oh those.

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Speaker 2: Rules, no there's another version that's well told in this

233
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Speaker 2: book Called Grand, delusions written by a reporter Named Hillel.

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00:11:49,400 --> 00:11:52,040
Speaker 2: Levin it's a very good, book very well. Reported it

235
00:11:52,080 --> 00:11:54,560
Speaker 2: was a key source for The Show, today And levin

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00:11:54,600 --> 00:11:57,040
Speaker 2: basically says or suggests That.

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Speaker 5: Delaurian resigned under.

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Speaker 2: Pressure he, SAYS gm executives Thought delurion had too many outside,

239
00:12:03,360 --> 00:12:06,560
Speaker 2: interests you, know like smoking. Gun but there is this

240
00:12:06,720 --> 00:12:09,760
Speaker 2: sense that internally AT, gm people are, like we don't

241
00:12:09,840 --> 00:12:13,520
Speaker 2: like this, guy we don't want him around. Anymore so whatever,

242
00:12:13,600 --> 00:12:18,680
Speaker 2: happened he's. Out but within about a, Year DeLorean had

243
00:12:18,720 --> 00:12:21,640
Speaker 2: his big. Idea he would build a.

244
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Speaker 5: Truly new, car and it would be a sports.

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Speaker 3: Car we'll be back in just a minute with The.

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Speaker 6: Deloria Tim, harford give me a cliched thing for a

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Speaker 6: man to do when he's having a midlife.

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Speaker 4: CRISIS i, mean for, me you take up running in.

249
00:12:56,400 --> 00:13:00,240
Speaker 4: Calisthenics BUT i think that the more the bigger cliche

250
00:13:00,440 --> 00:13:03,360
Speaker 4: is you divorce your wife and you buy a sports. Car.

251
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Speaker 2: Red, Yes delorian did both of. Those one better he

252
00:13:07,280 --> 00:13:10,600
Speaker 2: got two, divorces, wow one in the late, sixties another

253
00:13:10,640 --> 00:13:15,360
Speaker 2: in the early, seventies and he decided to invent a sports.

254
00:13:15,360 --> 00:13:18,319
Speaker 2: Car to create a sports, car he went. Big one

255
00:13:18,320 --> 00:13:20,600
Speaker 2: thing we can say About, delium the man went. Big

256
00:13:21,000 --> 00:13:23,640
Speaker 2: tim give us a couple of lines from a guy

257
00:13:23,640 --> 00:13:24,240
Speaker 2: who worked With.

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00:13:24,280 --> 00:13:27,800
Speaker 4: Delorian he Said jones started out with an image of

259
00:13:27,800 --> 00:13:30,440
Speaker 4: the car in his. Head he'd say it was a

260
00:13:30,520 --> 00:13:33,880
Speaker 4: hazy view of the car sitting in a field somewhere

261
00:13:34,360 --> 00:13:36,120
Speaker 4: with a gull wing doles.

262
00:13:36,440 --> 00:13:41,400
Speaker 3: Out the, doors always the. Doors it's so central to the.

263
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Speaker 3: Car it's the first thing.

264
00:13:42,160 --> 00:13:45,040
Speaker 2: You, say eighty percent is the. Doors and he didn't

265
00:13:45,080 --> 00:13:47,040
Speaker 2: invent the golding. Door by the, way there was A

266
00:13:47,080 --> 00:13:50,200
Speaker 2: mercedes that had been made long before that with golding,

267
00:13:50,240 --> 00:13:53,839
Speaker 2: doors but they're very, impractical which is why cars almost

268
00:13:53,880 --> 00:13:57,240
Speaker 2: ever have, them as we will see. Spoiler so there

269
00:13:57,280 --> 00:13:59,040
Speaker 2: were the, doors and there was the fact that he

270
00:13:59,080 --> 00:14:01,679
Speaker 2: was having a midlife. Crisis but it wasn't just those

271
00:14:01,679 --> 00:14:05,959
Speaker 2: things that Made delorian want to build a sports. Car

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00:14:06,240 --> 00:14:09,880
Speaker 2: there was a sound business idea behind. It and it

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00:14:09,920 --> 00:14:12,840
Speaker 2: basically comes down to the way a cones of scale.

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00:14:12,920 --> 00:14:15,280
Speaker 2: WORK i don't Know robert And tim like you guys

275
00:14:15,320 --> 00:14:17,400
Speaker 2: want to duke it out for who does economy of?

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Speaker 5: Scale you want to do it?

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Speaker 3: TOGETHER i want to Hear tim do economies of? Scale

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Speaker 3: oh too.

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00:14:21,040 --> 00:14:24,760
Speaker 4: Kind so an economy of scales simply means that the

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00:14:24,800 --> 00:14:28,640
Speaker 4: more you're producing of a, thing the cheaper it gets

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00:14:28,680 --> 00:14:32,600
Speaker 4: to produce each extra. Unit so you might, contrast, say

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Speaker 4: a sports car with a sports. Massage so if you're

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00:14:35,400 --> 00:14:38,040
Speaker 4: in the sports massage business and you give someone a

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00:14:38,080 --> 00:14:39,360
Speaker 4: sports massage.

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00:14:39,000 --> 00:14:40,800
Speaker 5: For american, listeners that's a.

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00:14:40,880 --> 00:14:44,280
Speaker 2: Massage go, On, tim, honestly.

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00:14:44,000 --> 00:14:47,080
Speaker 4: Please leave a. Massage it takes an, hour, right it

288
00:14:47,120 --> 00:14:50,040
Speaker 4: takes an hour of your. Time and you want to

289
00:14:50,080 --> 00:14:54,760
Speaker 4: do another sports massage anywhere, whatever it takes another. Hour

290
00:14:54,800 --> 00:14:56,440
Speaker 4: and if you want to do another, one it takes another.

291
00:14:56,480 --> 00:14:59,920
Speaker 4: Hour you're not really gaining anything by having more massage.

292
00:14:59,920 --> 00:15:02,640
Speaker 4: Appointments none of this is getting any cheaper or more.

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00:15:02,680 --> 00:15:05,160
Speaker 4: Efficient but if you think about a, car you've got

294
00:15:05,200 --> 00:15:07,000
Speaker 4: to design the, car you've got to test the, car

295
00:15:07,240 --> 00:15:11,200
Speaker 4: you've got to tool up the, factories and it cots

296
00:15:11,240 --> 00:15:15,520
Speaker 4: an absolutely the enormous amount of money and time and

297
00:15:15,680 --> 00:15:18,680
Speaker 4: effort to produce the first, car and then the second

298
00:15:18,720 --> 00:15:20,840
Speaker 4: one is way cheaper and the third one is. Cheaper

299
00:15:21,040 --> 00:15:24,400
Speaker 4: so there's a real advantage to just trying to produce

300
00:15:24,440 --> 00:15:27,600
Speaker 4: as many of these cars as you possibly, can not

301
00:15:27,720 --> 00:15:30,440
Speaker 4: just because, hey everybody wants to sell, more but for

302
00:15:30,520 --> 00:15:34,800
Speaker 4: any given, price the amount of cars you're selling could

303
00:15:34,840 --> 00:15:37,080
Speaker 4: mean that you're making a loss on each, car or

304
00:15:37,120 --> 00:15:38,760
Speaker 4: you're making a massive profit on each.

305
00:15:38,800 --> 00:15:41,479
Speaker 3: Car and this makes it very hard for new competitors

306
00:15:41,520 --> 00:15:44,280
Speaker 3: to come into an industry where there's these economies of,

307
00:15:44,320 --> 00:15:46,360
Speaker 3: skill BECAUSE i could, say, like, Oh i've got a

308
00:15:46,360 --> 00:15:48,280
Speaker 3: great idea for a, car but ALL i need is

309
00:15:48,400 --> 00:15:50,800
Speaker 3: millions and millions of dollars to build the, factory hire the,

310
00:15:50,840 --> 00:15:53,280
Speaker 3: workers get the, land design the.

311
00:15:53,240 --> 00:15:56,640
Speaker 2: Car before you even sell, one and that first car

312
00:15:56,760 --> 00:15:57,400
Speaker 2: needs to be very.

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00:15:57,400 --> 00:15:59,440
Speaker 3: Expensive you've got to borrow a lot of.

314
00:15:59,440 --> 00:16:02,720
Speaker 4: Money you've got to persuade a lot of people that

315
00:16:02,760 --> 00:16:04,480
Speaker 4: this is a good. Idea who are you going to

316
00:16:04,520 --> 00:16:05,640
Speaker 4: Persuade who's going to come up with that?

317
00:16:05,720 --> 00:16:08,160
Speaker 2: Money, so in, fact this is a big part of

318
00:16:08,160 --> 00:16:10,480
Speaker 2: the reason it's so hard to start a car company

319
00:16:10,800 --> 00:16:13,520
Speaker 2: as opposed to know a massage therapy.

320
00:16:13,680 --> 00:16:15,000
Speaker 5: Business and in.

321
00:16:14,880 --> 00:16:19,520
Speaker 2: Fact for decades Before delorian tries to start his, company

322
00:16:19,680 --> 00:16:23,080
Speaker 2: people have tried and failed In america to start new car.

323
00:16:23,120 --> 00:16:26,280
Speaker 2: Companies it has been like fifty years since there was

324
00:16:26,360 --> 00:16:28,200
Speaker 2: a successful new car, company, which by the, way was

325
00:16:28,240 --> 00:16:32,480
Speaker 2: also started by a FORMER gm executive Named Walter.

326
00:16:32,560 --> 00:16:34,520
Speaker 5: Chrysler So dolauri of course knows all.

327
00:16:34,560 --> 00:16:36,440
Speaker 2: This he knows About, chrysler he knows about all these,

328
00:16:36,440 --> 00:16:39,680
Speaker 2: failures and he thinks that a sports car might actually

329
00:16:39,720 --> 00:16:44,160
Speaker 2: help him solve this economy of scale problem because people

330
00:16:44,200 --> 00:16:47,440
Speaker 2: will pay a lot of money for a beautiful sports

331
00:16:47,480 --> 00:16:50,480
Speaker 2: car with doors that open up instead of. Out so

332
00:16:50,560 --> 00:16:53,520
Speaker 2: if you can charge a lot for that, car you

333
00:16:53,560 --> 00:16:56,640
Speaker 2: don't have to sell as many to get over the

334
00:16:56,640 --> 00:16:57,520
Speaker 2: economy of scale.

335
00:16:57,560 --> 00:17:00,200
Speaker 3: Hurdle this is exactly the same trick used By Elon

336
00:17:00,320 --> 00:17:03,040
Speaker 3: musk when he first Started. Tesla like the first car

337
00:17:03,120 --> 00:17:06,040
Speaker 3: was a sports. Car it costs one hundred thousand. Dollars,

338
00:17:06,159 --> 00:17:08,800
Speaker 3: yeah but he also signed people up in advance to

339
00:17:08,840 --> 00:17:11,719
Speaker 3: get the money to help make those first, cars and,

340
00:17:11,720 --> 00:17:14,239
Speaker 3: then if, course later on he developed cheaper cars and

341
00:17:14,320 --> 00:17:15,560
Speaker 3: weirder looking cars.

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00:17:15,720 --> 00:17:16,439
Speaker 5: Once he got to.

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00:17:16,480 --> 00:17:19,439
Speaker 2: Scale, right you use the sports car as the first

344
00:17:19,480 --> 00:17:21,880
Speaker 2: car that gets you to, scale and then you can

345
00:17:21,960 --> 00:17:23,280
Speaker 2: sell the cheaper car for the.

346
00:17:23,320 --> 00:17:25,840
Speaker 4: Masses Did Elon musk Stot. Tesla by the, WAY i

347
00:17:25,840 --> 00:17:27,160
Speaker 4: feel we're going to get letters about.

348
00:17:27,200 --> 00:17:29,040
Speaker 5: This he did, Not, robert did you say?

349
00:17:29,080 --> 00:17:29,320
Speaker 4: That he.

350
00:17:29,359 --> 00:17:31,359
Speaker 2: DID i Think i'm going to read you the listener

351
00:17:31,400 --> 00:17:34,520
Speaker 2: letter right now. Here Sir Elon musk Joined tesla and

352
00:17:34,600 --> 00:17:35,119
Speaker 2: helped make it.

353
00:17:35,160 --> 00:17:35,920
Speaker 3: Successful thank.

354
00:17:35,960 --> 00:17:40,800
Speaker 4: You, Okay but the sports car strategy makes. Sense musk used,

355
00:17:40,840 --> 00:17:42,919
Speaker 4: it And delorian is going to go for.

356
00:17:42,960 --> 00:17:46,920
Speaker 2: It, yes this is his. Plan but still you got

357
00:17:46,920 --> 00:17:49,639
Speaker 2: to raise all that. Money you still have to raise

358
00:17:50,040 --> 00:17:53,920
Speaker 2: a crazy amount of. Money so in nineteen seventy five

359
00:17:54,200 --> 00:17:57,600
Speaker 2: he starts The DeLorean Motor company and he starts raising.

360
00:17:57,680 --> 00:18:00,920
Speaker 2: Money he's very, glamorous, Right he's good, looking and he's

361
00:18:01,040 --> 00:18:03,399
Speaker 2: kind of a, star and he's of the. Moment and

362
00:18:03,440 --> 00:18:07,600
Speaker 2: so he's raising money From Johnny carson And Sammy Davis,

363
00:18:07,680 --> 00:18:11,399
Speaker 2: junior WHICH i love these as like nineteen seventies cool.

364
00:18:11,480 --> 00:18:15,040
Speaker 2: INVESTOR i Mean JOHN i can't tell if That's Sammy

365
00:18:15,080 --> 00:18:17,280
Speaker 2: davis jud Or Johnny, carson AND i don't want to.

366
00:18:17,320 --> 00:18:19,720
Speaker 2: Know and so some money is coming in and he's

367
00:18:20,040 --> 00:18:22,119
Speaker 2: sharpening his vision of the. Car he works with this

368
00:18:22,280 --> 00:18:25,720
Speaker 2: Famous italian designer who comes up with this, low boxy

369
00:18:25,800 --> 00:18:27,840
Speaker 2: design that is like a great. Design if you think

370
00:18:27,840 --> 00:18:30,080
Speaker 2: about the. Time you, know cars are kind of moving

371
00:18:30,119 --> 00:18:33,000
Speaker 2: in the direction that The dolorian is. Going it is

372
00:18:33,080 --> 00:18:35,800
Speaker 2: kind of ahead of its. Time And delorian also decides

373
00:18:35,840 --> 00:18:38,360
Speaker 2: to use this process where the frame of the car

374
00:18:38,440 --> 00:18:41,439
Speaker 2: is built basically with this special kind of plastic and

375
00:18:41,480 --> 00:18:44,320
Speaker 2: then there's stainless steel on the, outside kind of like

376
00:18:44,359 --> 00:18:46,320
Speaker 2: The model t any color you, want as long as it's.

377
00:18:46,320 --> 00:18:48,200
Speaker 2: Black The delorian is any color you, want as long

378
00:18:48,240 --> 00:18:48,560
Speaker 2: as it.

379
00:18:48,520 --> 00:18:50,440
Speaker 5: Is stainless, steel which also looks.

380
00:18:50,480 --> 00:18:53,280
Speaker 4: Cool did he work With lotus as? Well he.

381
00:18:53,359 --> 00:18:56,840
Speaker 2: Did he did work With lotus as A british. Citizen

382
00:18:57,119 --> 00:18:58,800
Speaker 2: perhaps this means more to you than to, me but

383
00:18:58,840 --> 00:18:59,280
Speaker 2: tell me About.

384
00:18:59,320 --> 00:19:02,879
Speaker 4: Lotus it means so much to me because the car

385
00:19:03,200 --> 00:19:07,600
Speaker 4: That James bond turns into a, submarine this sleek white sports.

386
00:19:07,640 --> 00:19:11,520
Speaker 4: Car he's escaping for the helicopter and he drives off

387
00:19:11,520 --> 00:19:13,800
Speaker 4: the pit into the lake and then the car just

388
00:19:14,440 --> 00:19:17,600
Speaker 4: sprouts fins and it turns into a. Submarine and WHEN

389
00:19:17,640 --> 00:19:20,000
Speaker 4: i was a, BOY i had the toy of that,

390
00:19:20,320 --> 00:19:23,600
Speaker 4: car that die cast. Car you press a, button h

391
00:19:24,160 --> 00:19:26,920
Speaker 4: the submarine fins come, Out and, yeah that's ALL i

392
00:19:26,960 --> 00:19:28,439
Speaker 4: know About. Lotus but, YEAH i just wanted to.

393
00:19:28,640 --> 00:19:31,080
Speaker 2: And this is probably a similar, error, RIGHT i, mean

394
00:19:31,119 --> 00:19:33,040
Speaker 2: did that car look kind of like a like a

395
00:19:33,080 --> 00:19:35,000
Speaker 2: doloreumtem to have that kind of boxy.

396
00:19:35,280 --> 00:19:38,040
Speaker 4: Vibe, also, YEAH i mean it was super it. Was

397
00:19:38,160 --> 00:19:40,400
Speaker 4: it was super sharp at the, front had a very

398
00:19:40,520 --> 00:19:42,719
Speaker 4: very sharp point at the. Front but that's for cutting

399
00:19:42,720 --> 00:19:43,359
Speaker 4: through the water.

400
00:19:43,680 --> 00:19:45,840
Speaker 3: Exactly they didn't have laws then to keep kids.

401
00:19:45,840 --> 00:19:49,399
Speaker 5: Safe so so this is this is the vision for the.

402
00:19:49,400 --> 00:19:54,159
Speaker 2: Car lotus has worked on This italian designer stainless. Steel

403
00:19:54,200 --> 00:19:57,119
Speaker 2: of course the doors now is when you need the real,

404
00:19:57,200 --> 00:20:01,159
Speaker 2: capital not The Johnny Carson Sammy Davis junior kind of,

405
00:20:01,200 --> 00:20:02,680
Speaker 2: capital but, big big.

406
00:20:02,760 --> 00:20:06,800
Speaker 4: Capital and by capital you mean money of, money thank, you, yes.

407
00:20:06,960 --> 00:20:10,040
Speaker 5: Money WHAT i mean is. Money and we live in

408
00:20:10,080 --> 00:20:10,560
Speaker 5: this world.

409
00:20:10,600 --> 00:20:15,879
Speaker 2: Today somebody Like dolrian would have, people you, know running

410
00:20:15,920 --> 00:20:17,960
Speaker 2: down his door to give him. Money we live in

411
00:20:17,960 --> 00:20:21,520
Speaker 2: a much more financialized world. Now there wasn't a startups

412
00:20:21,560 --> 00:20:23,760
Speaker 2: ecosystem like we know. It there wasn't private equity like

413
00:20:23,800 --> 00:20:25,359
Speaker 2: we know, it there wasn't venture capital like we know.

414
00:20:25,400 --> 00:20:27,360
Speaker 2: It all these things were getting, started as we've talked

415
00:20:27,400 --> 00:20:29,160
Speaker 2: about on the, show and As, tim as you've written

416
00:20:29,200 --> 00:20:31,600
Speaker 2: about and talked. About but it just was not like

417
00:20:31,640 --> 00:20:35,800
Speaker 2: it is. Today and also every New american car company

418
00:20:35,800 --> 00:20:37,320
Speaker 2: for the past fifty years had been a.

419
00:20:37,359 --> 00:20:40,680
Speaker 4: Failure so you need somebody with money and no. Judgment that's.

420
00:20:40,680 --> 00:20:45,920
Speaker 2: What, Yes, yes a, government you need a, government and

421
00:20:46,440 --> 00:20:51,000
Speaker 2: governments especially at this. Time but actually still governments really

422
00:20:51,400 --> 00:20:52,400
Speaker 2: love car.

423
00:20:52,440 --> 00:20:57,840
Speaker 4: Companies, yeah they love them because jobs making, cars they

424
00:20:57,840 --> 00:21:02,800
Speaker 4: are manufacturing. Jobs they are perceived as high status jobs

425
00:21:03,119 --> 00:21:06,200
Speaker 4: for ordinary. Citizens you, know it's not for the. Elite

426
00:21:06,280 --> 00:21:09,680
Speaker 4: it's not for people with fancy. Degrees it's for regular.

427
00:21:09,680 --> 00:21:12,560
Speaker 4: Guys and they usually are guys without an a load

428
00:21:12,560 --> 00:21:15,399
Speaker 4: of education who can get some skills, training and they

429
00:21:15,400 --> 00:21:17,560
Speaker 4: can get a good job and it's a steady. Job

430
00:21:17,600 --> 00:21:20,480
Speaker 4: and what's, more there's going to be a whole network

431
00:21:20,680 --> 00:21:25,199
Speaker 4: of suppliers which are all going to be relying on

432
00:21:25,240 --> 00:21:28,639
Speaker 4: this car. Factory and so you're not just building a,

433
00:21:28,680 --> 00:21:33,960
Speaker 4: car you're giving citizens great, jobs and you're revitalizing an entire.

434
00:21:34,000 --> 00:21:36,440
Speaker 4: Region that's the. Attraction that's what governments are hoping.

435
00:21:36,440 --> 00:21:38,720
Speaker 3: For and the nice thing about having someone build a

436
00:21:38,760 --> 00:21:41,760
Speaker 3: factory on your territory is it's hard for them to

437
00:21:41,800 --> 00:21:45,560
Speaker 3: take it. Back once they've built, it it has to stay.

438
00:21:45,560 --> 00:21:49,320
Speaker 4: There, yeah and you, know we've been mocking. Governments i've

439
00:21:49,320 --> 00:21:53,040
Speaker 4: been mocking. Governments But china has done this and has

440
00:21:53,080 --> 00:21:56,000
Speaker 4: been very. Successful but it's not cars like the glory

441
00:21:56,040 --> 00:21:58,520
Speaker 4: and it's the new cutting. Edge it's electric, vehicles and

442
00:21:58,560 --> 00:22:01,360
Speaker 4: some of the best electric vehicles in the world are

443
00:22:01,480 --> 00:22:05,000
Speaker 4: coming out Of. China and that story about the supply

444
00:22:05,119 --> 00:22:07,840
Speaker 4: chains that counts as. Well so this is also a

445
00:22:07,840 --> 00:22:11,280
Speaker 4: story About china having an ev. Grid it's also a

446
00:22:11,359 --> 00:22:14,880
Speaker 4: story About china developing battery. Technology it's a story About

447
00:22:14,960 --> 00:22:18,520
Speaker 4: china developing rare. Earths you, know whatever those things. Are

448
00:22:18,600 --> 00:22:22,040
Speaker 4: they're important for electric, cars, magnets but not only, that

449
00:22:22,359 --> 00:22:26,200
Speaker 4: they're also key building blocks for drones and for missiles

450
00:22:26,240 --> 00:22:29,400
Speaker 4: and for high tech, electronics all of this other stuff

451
00:22:29,920 --> 00:22:32,800
Speaker 4: that you're indirectly supporting by backing your car.

452
00:22:32,840 --> 00:22:35,560
Speaker 3: Industry so this is the, dream.

453
00:22:35,400 --> 00:22:39,320
Speaker 2: Right this is why governments have a point when they

454
00:22:39,520 --> 00:22:45,160
Speaker 2: throw money at car. Industries and in, fact When John,

455
00:22:45,200 --> 00:22:49,280
Speaker 2: delorian this glamorous Former General motors executive with this idea

456
00:22:49,320 --> 00:22:52,520
Speaker 2: for a beautiful, car starts shopping around for a place

457
00:22:52,560 --> 00:22:56,200
Speaker 2: to build a, factory governments basically throw money at. Him

458
00:22:56,680 --> 00:23:00,240
Speaker 2: he's tucking to people In spain In detroit at home

459
00:23:00,440 --> 00:23:03,159
Speaker 2: he's In Puerto, rico gets really closed to go in

460
00:23:03,200 --> 00:23:05,520
Speaker 2: To Puerto, rico but in the end he gets a

461
00:23:05,520 --> 00:23:07,600
Speaker 2: better offer from The United.

462
00:23:07,640 --> 00:23:09,240
Speaker 5: Kingdom home Of Tim.

463
00:23:09,280 --> 00:23:12,879
Speaker 2: Harford THE uk government is going to give him something

464
00:23:12,960 --> 00:23:15,320
Speaker 2: like one hundred million dollars if it seemed cheaper in,

465
00:23:15,400 --> 00:23:18,119
Speaker 2: pounds most of it in, grants some of it in,

466
00:23:18,280 --> 00:23:22,080
Speaker 2: loans but there is a, catch and the. Catches to

467
00:23:22,119 --> 00:23:25,760
Speaker 2: get the, money he has to build the factory In Northern.

468
00:23:25,800 --> 00:23:29,880
Speaker 3: Ireland this is another classic move by. Governments they don't

469
00:23:29,880 --> 00:23:32,640
Speaker 3: want the factory to just be. Anywhere once they can

470
00:23:32,760 --> 00:23:36,000
Speaker 3: convince a factory to come to their, country they look

471
00:23:36,040 --> 00:23:40,320
Speaker 3: around at which part of their territory is struggling the,

472
00:23:40,359 --> 00:23:42,640
Speaker 3: most because that way you can get the most bang

473
00:23:42,720 --> 00:23:44,760
Speaker 3: for your buck and it solves sort of two, problems

474
00:23:44,760 --> 00:23:47,920
Speaker 3: a political problem and an economic problem at the same.

475
00:23:47,960 --> 00:23:49,640
Speaker 3: Time so Why Northern ireland?

476
00:23:49,680 --> 00:23:52,440
Speaker 4: Him so Why Northern? Ireland So Northern ireland is part

477
00:23:52,480 --> 00:23:55,800
Speaker 4: of The United, kingdom but it is physically on The

478
00:23:56,160 --> 00:23:59,160
Speaker 4: island Of, ireland so next to The republic Of, ireland

479
00:24:00,000 --> 00:24:05,800
Speaker 4: and it's been contested politically for a long. Time so

480
00:24:05,840 --> 00:24:09,720
Speaker 4: you've got The protestants and The catholics In Northern. Ireland

481
00:24:10,160 --> 00:24:12,919
Speaker 4: some of The catholics want to be reunite with The

482
00:24:12,920 --> 00:24:15,639
Speaker 4: republic Of. IRELAND a lot of The protestants do. Not

483
00:24:15,880 --> 00:24:18,359
Speaker 4: they want to stay part of The United. Kingdom this

484
00:24:18,680 --> 00:24:24,240
Speaker 4: disagreement gets extremely. Violent there are, bombs there are, killings

485
00:24:24,600 --> 00:24:27,480
Speaker 4: there are soldiers on the, streets there's barbed. Wire they

486
00:24:27,480 --> 00:24:31,000
Speaker 4: are building, walls they call them peace, walls just Between

487
00:24:31,240 --> 00:24:34,040
Speaker 4: protestant And catholic. Neighborhoods AND i don't know whether the

488
00:24:34,080 --> 00:24:35,760
Speaker 4: peace walls were a good idea or a bad, idea

489
00:24:35,760 --> 00:24:38,520
Speaker 4: but they're not a good sign. Right so it's a

490
00:24:38,640 --> 00:24:43,760
Speaker 4: very tense. Situation and of Course Northern ireland is suffering

491
00:24:44,200 --> 00:24:46,760
Speaker 4: economically as a result of. That and so you have

492
00:24:46,800 --> 00:24:49,920
Speaker 4: the decision makers who are In. London of course they've

493
00:24:49,920 --> 00:24:52,000
Speaker 4: got the, money they've got the, power and they're trying

494
00:24:52,000 --> 00:24:56,480
Speaker 4: to do something to make this problem less of a.

495
00:24:56,520 --> 00:25:00,360
Speaker 4: Problem it's probably worth mentioning as. Well you might think

496
00:25:00,359 --> 00:25:02,760
Speaker 4: Of Northern ireland as. Well maybe it's a rural, economy

497
00:25:02,760 --> 00:25:06,520
Speaker 4: maybe it's a bit economically. Backward, Actually Northern ireland historically

498
00:25:06,920 --> 00:25:11,000
Speaker 4: has a lot of manufacturing and amazing shipbuilding, industry but

499
00:25:11,080 --> 00:25:15,479
Speaker 4: that shipbuilding industy itself was under pressure from competition at

500
00:25:15,520 --> 00:25:19,200
Speaker 4: the time From, japan From. Korea so there's another question

501
00:25:19,359 --> 00:25:21,560
Speaker 4: we're going to we're losing these manufacturing. Jobs where are

502
00:25:21,600 --> 00:25:23,760
Speaker 4: we going to get the manufacturing jobs to replace. Them

503
00:25:23,840 --> 00:25:26,800
Speaker 4: so for all of these, reasons the idea of putting

504
00:25:26,800 --> 00:25:31,520
Speaker 4: a car factory In Northern ireland seemed attractive to the decision,

505
00:25:31,560 --> 00:25:32,760
Speaker 4: makers most of whom were In.

506
00:25:32,760 --> 00:25:35,640
Speaker 2: London Tim, harford what's the most famous ship ever built

507
00:25:35,640 --> 00:25:36,000
Speaker 2: In Northern?

508
00:25:36,040 --> 00:25:40,480
Speaker 4: Ireland you want to go? There it's The. Titanic i'm

509
00:25:40,520 --> 00:25:43,240
Speaker 4: not going to Blame belfast for, That, no we blame

510
00:25:43,280 --> 00:25:45,199
Speaker 4: The iceberg for. That so this is the.

511
00:25:45,240 --> 00:25:49,040
Speaker 2: Context unemployment In Northern ireland is something like ten percent

512
00:25:49,080 --> 00:25:51,000
Speaker 2: at the. Time it's even higher in this sort of

513
00:25:51,160 --> 00:25:54,640
Speaker 2: rust belt parts Of Northern. Ireland and so of, course

514
00:25:54,880 --> 00:25:57,920
Speaker 2: when Beautiful John dolorian comes along with his beautiful car

515
00:25:57,960 --> 00:26:01,040
Speaker 2: and his promise of his beautiful, factory of course they

516
00:26:01,080 --> 00:26:03,080
Speaker 2: want him to put it In Northern. Ireland and they

517
00:26:03,080 --> 00:26:05,040
Speaker 2: don't just want him to put it anywhere In Northern.

518
00:26:05,080 --> 00:26:07,680
Speaker 2: Ireland they want him to put it in this particular

519
00:26:07,840 --> 00:26:12,720
Speaker 2: spot on this marshy field in between a neighborhood and

520
00:26:12,760 --> 00:26:16,680
Speaker 2: A protestant neighborhood in an industrial town called Dun, marie

521
00:26:17,000 --> 00:26:17,639
Speaker 2: just outside Of.

522
00:26:17,640 --> 00:26:21,600
Speaker 3: BELFAST i can imagine The protestants and The catholics coming

523
00:26:21,600 --> 00:26:25,480
Speaker 3: together through the factory, door wrenches in, hand building together

524
00:26:26,200 --> 00:26:27,800
Speaker 3: a New tomorrow and a new.

525
00:26:27,800 --> 00:26:28,720
Speaker 5: Car spoiler.

526
00:26:28,720 --> 00:26:31,400
Speaker 2: Alert they're gonna have to build two different, doors one

527
00:26:31,440 --> 00:26:34,520
Speaker 2: for The protestants and one for The. Colics laurian, says, yes,

528
00:26:34,560 --> 00:26:37,760
Speaker 2: sure we will build the factory. There and On october,

529
00:26:37,880 --> 00:26:40,200
Speaker 2: second nineteen seventy, eight he broke.

530
00:26:40,280 --> 00:26:42,040
Speaker 5: Round there's a picture of it THAT i.

531
00:26:42,080 --> 00:26:42,440
Speaker 3: Saw he's.

532
00:26:42,480 --> 00:26:45,399
Speaker 2: There he's got a suit and a shovel with some.

533
00:26:45,520 --> 00:26:46,320
Speaker 2: Dirt he's under a.

534
00:26:46,359 --> 00:26:49,560
Speaker 5: TENT i guess because it was. RAINING i. Infer and

535
00:26:49,600 --> 00:26:50,359
Speaker 5: so this is going to be.

536
00:26:50,359 --> 00:26:52,720
Speaker 2: Hard it's always hard to build a you, know greenfield

537
00:26:52,840 --> 00:26:55,560
Speaker 2: new factory for a new. Car it's really hard to

538
00:26:55,560 --> 00:26:57,679
Speaker 2: do it in the middle of violent civil.

539
00:26:57,760 --> 00:26:59,840
Speaker 5: Unrest there's barbed wire.

540
00:26:59,920 --> 00:27:04,080
Speaker 2: Everywhere when executives come to stay in a hotel to

541
00:27:04,160 --> 00:27:05,959
Speaker 2: work on the. Factory to get into the, hotel they

542
00:27:05,960 --> 00:27:09,440
Speaker 2: have to be frisked in this special. Trailer they're supposed

543
00:27:09,480 --> 00:27:13,840
Speaker 2: to start production in nineteen seventy. Nine they don't in nineteen,

544
00:27:13,880 --> 00:27:16,280
Speaker 2: Eighty delourion goes back to the government for more.

545
00:27:16,160 --> 00:27:18,800
Speaker 5: Money and the government then starts like.

546
00:27:18,800 --> 00:27:21,680
Speaker 2: Looking at the books of this, company and you, know they're,

547
00:27:21,720 --> 00:27:23,200
Speaker 2: like why are you spending so? Much sure it's a

548
00:27:23,200 --> 00:27:25,400
Speaker 2: lot to build a, factory but just we're just noticing

549
00:27:25,440 --> 00:27:28,280
Speaker 2: that you have THESE us offices where you're millions of

550
00:27:28,320 --> 00:27:29,680
Speaker 2: dollars over.

551
00:27:29,760 --> 00:27:30,840
Speaker 5: Budget why is this?

552
00:27:30,920 --> 00:27:34,199
Speaker 2: Happening and somebody working With delorian actually looks at you,

553
00:27:34,200 --> 00:27:37,879
Speaker 2: know looks at this situation and goes To delurian and

554
00:27:38,080 --> 00:27:39,800
Speaker 2: makes the case, like you, know maybe we could spend

555
00:27:39,840 --> 00:27:41,760
Speaker 2: a little less on the on THE us offices where

556
00:27:41,800 --> 00:27:43,080
Speaker 2: millions Over robert give.

557
00:27:43,160 --> 00:27:44,880
Speaker 5: Us delurion's reply to this, Guy.

558
00:27:44,960 --> 00:27:49,040
Speaker 3: John dolaurian, says a two point five million dollars shortfall

559
00:27:49,080 --> 00:27:51,600
Speaker 3: for THE us is. Peanuts i'm not going to be

560
00:27:51,760 --> 00:27:54,399
Speaker 3: nickel and dimed by those. Bastards i'm not going to

561
00:27:54,520 --> 00:27:57,280
Speaker 3: run a nickel shit. Company if they don't like, IT

562
00:27:57,520 --> 00:28:01,480
Speaker 3: i will close it down Next. Friday, Tim just to

563
00:28:01,520 --> 00:28:05,280
Speaker 3: translate for, you nickel shit would be like a tuppence.

564
00:28:05,440 --> 00:28:08,280
Speaker 4: SHITE i believe he sounds like a nice, guy but

565
00:28:08,359 --> 00:28:10,480
Speaker 4: that's the. Threat if they don't like, It i'll close

566
00:28:10,480 --> 00:28:13,679
Speaker 4: it down Next friday gift does this that people believe?

567
00:28:13,720 --> 00:28:17,199
Speaker 3: This, well they give him more. Money, yeah it's the

568
00:28:17,200 --> 00:28:20,040
Speaker 3: government of THE. Uk they're not really known for overcoming

569
00:28:20,040 --> 00:28:20,760
Speaker 3: the sunk cost.

570
00:28:20,800 --> 00:28:21,280
Speaker 4: Fallacy.

571
00:28:21,520 --> 00:28:23,760
Speaker 2: Right, well and think about. It they've put all this

572
00:28:23,880 --> 00:28:26,320
Speaker 2: money into the. Project they have promised that they're going

573
00:28:26,359 --> 00:28:29,560
Speaker 2: to bring thousands of jobs to this place that desperately needs.

574
00:28:29,600 --> 00:28:29,719
Speaker 3: It.

575
00:28:29,800 --> 00:28:33,520
Speaker 5: Right delorian is not a nice guy, here but he is.

576
00:28:33,600 --> 00:28:34,439
Speaker 3: Savvy he is.

577
00:28:34,640 --> 00:28:37,320
Speaker 2: Right what they end up doing is largely giving him

578
00:28:37,320 --> 00:28:41,240
Speaker 2: more loan, guarantees which you, know is like, money as

579
00:28:41,240 --> 00:28:43,160
Speaker 2: we have seen time and again in. History the government

580
00:28:43,160 --> 00:28:44,960
Speaker 2: can say, no, no it's not, money it's just a loan.

581
00:28:45,000 --> 00:28:48,160
Speaker 2: Guarantee but there is something quite money like about a

582
00:28:48,200 --> 00:28:49,000
Speaker 2: loan guarantee in the.

583
00:28:49,080 --> 00:28:50,360
Speaker 5: End quite, often.

584
00:28:50,480 --> 00:28:54,720
Speaker 2: And in early nineteen eighty, one these beautiful silver cars

585
00:28:54,800 --> 00:28:58,720
Speaker 2: start coming off the line and they're you, know shipped

586
00:28:58,760 --> 00:29:02,680
Speaker 2: to auto dealers In america and people start buying this,

587
00:29:02,840 --> 00:29:06,320
Speaker 2: car and every car comes.

588
00:29:06,000 --> 00:29:07,360
Speaker 5: With a letter From JOHN.

589
00:29:07,520 --> 00:29:11,840
Speaker 2: Z delorian asking the new owner for. Feedback, tim give

590
00:29:11,920 --> 00:29:12,360
Speaker 2: us a hit of the.

591
00:29:12,440 --> 00:29:14,240
Speaker 4: Letter, okay there are no curse words in the.

592
00:29:14,280 --> 00:29:15,400
Speaker 3: Letter there are not not a.

593
00:29:15,440 --> 00:29:19,080
Speaker 4: One, okay if as you come to know your car.

594
00:29:19,200 --> 00:29:21,840
Speaker 4: Better he wants to comment on how well we have

595
00:29:21,880 --> 00:29:25,160
Speaker 4: achieved our goals or how we might even. IMPROVE i

596
00:29:25,240 --> 00:29:29,880
Speaker 4: do hope you will do. So warmest personal, Regards JOHN Z.

597
00:29:30,120 --> 00:29:33,760
Speaker 4: Deloorian it's. Nice nice letter sounds sounds.

598
00:29:33,480 --> 00:29:34,600
Speaker 5: Like a nice guy who really.

599
00:29:34,640 --> 00:29:39,040
Speaker 2: Cares Robert, smith please read to us from one representative

600
00:29:39,120 --> 00:29:42,720
Speaker 2: letter from A doloreian owner In chicago who says he's

601
00:29:42,840 --> 00:29:46,320
Speaker 2: noticed a number of small problems and who actually lists.

602
00:29:46,360 --> 00:29:50,480
Speaker 3: Them. Yeah number one side window sticks in the up.

603
00:29:50,480 --> 00:29:55,960
Speaker 3: Position number two fuel pump is excessively. Noisy number three

604
00:29:56,640 --> 00:30:00,120
Speaker 3: die from the optional floor mats comes off and stains, clothing,

605
00:30:00,480 --> 00:30:05,760
Speaker 3: shoes and. Skin number four interior body fit of the

606
00:30:05,840 --> 00:30:09,440
Speaker 3: door is not. Excellent number five owners manual does not

607
00:30:09,480 --> 00:30:12,320
Speaker 3: state the type of light bulbs to. Use suffer were

608
00:30:12,360 --> 00:30:16,160
Speaker 3: burned out upon. Delivery number six the radio is, terrible

609
00:30:16,480 --> 00:30:20,560
Speaker 3: especially in THE fm stereo. Position with the exception of the,

610
00:30:20,600 --> 00:30:24,200
Speaker 3: ABOVE i have found the car to be, great so,

611
00:30:24,360 --> 00:30:27,640
Speaker 3: good so. Good is he joking or?

612
00:30:27,680 --> 00:30:30,240
Speaker 5: Not is he joking or? Not this is a QUESTION

613
00:30:30,520 --> 00:30:31,120
Speaker 5: i don't.

614
00:30:31,280 --> 00:30:33,960
Speaker 3: THINK i don't think he's joking because the kind of

615
00:30:34,040 --> 00:30:37,200
Speaker 3: car nuts who are buying this, car they love.

616
00:30:37,240 --> 00:30:39,000
Speaker 4: It they love it, Well SO i guess it is

617
00:30:39,120 --> 00:30:41,680
Speaker 4: possible to have all of those faults and to, still you,

618
00:30:41,720 --> 00:30:45,480
Speaker 4: know the car could still look, great handle. Brilliantly you.

619
00:30:45,520 --> 00:30:47,880
Speaker 4: KNOW i could imagine you could still like your car

620
00:30:48,000 --> 00:30:51,160
Speaker 4: even with those. Problems but then it's not a good,

621
00:30:51,240 --> 00:30:51,640
Speaker 4: sign is.

622
00:30:51,640 --> 00:30:55,040
Speaker 5: It The doloreans were, bad not a good. Sign they were.

623
00:30:55,160 --> 00:30:56,720
Speaker 5: Lemons they were cars that did not.

624
00:30:56,760 --> 00:30:56,960
Speaker 4: Work.

625
00:30:57,000 --> 00:30:58,840
Speaker 3: Well what about the, doors the going?

626
00:30:58,920 --> 00:31:01,480
Speaker 5: Doors they got. Stuck the doors got.

627
00:31:01,520 --> 00:31:04,440
Speaker 2: Stuck there was actually some car show In cleveland where

628
00:31:04,440 --> 00:31:07,160
Speaker 2: somebody got stuck inside for an, hour like the like

629
00:31:07,200 --> 00:31:09,240
Speaker 2: the spinal tap Seat river where the guy gets stuck

630
00:31:09,280 --> 00:31:09,680
Speaker 2: inside the.

631
00:31:09,720 --> 00:31:12,040
Speaker 4: Egg, Ye Derek small's his name, Is that's.

632
00:31:12,160 --> 00:31:15,640
Speaker 5: That's delorians were bad.

633
00:31:15,720 --> 00:31:21,920
Speaker 2: Cars they, leaked, windows fell, out and in, fact the

634
00:31:21,960 --> 00:31:25,760
Speaker 2: company winds up setting up what they call quality assurance

635
00:31:25,800 --> 00:31:28,840
Speaker 2: centers around The United, states which sounds like it's, like,

636
00:31:28,880 --> 00:31:32,640
Speaker 2: oh we're just assuring that every car is built to

637
00:31:32,680 --> 00:31:35,440
Speaker 2: the highest standard of. Quality but this is obviously not

638
00:31:35,480 --> 00:31:38,280
Speaker 2: what they were. Doing they were fixing the cars that

639
00:31:38,360 --> 00:31:41,080
Speaker 2: came off the line that didn't. Work they actually came

640
00:31:41,160 --> 00:31:43,600
Speaker 2: up with this fix for the doors where they added

641
00:31:43,600 --> 00:31:46,040
Speaker 2: some kind of a metal, LATCH i guess to prevent

642
00:31:46,080 --> 00:31:48,760
Speaker 2: them from getting. Stuck and what they had to do

643
00:31:48,800 --> 00:31:50,160
Speaker 2: for a while before they could do it in the

644
00:31:50,160 --> 00:31:53,840
Speaker 2: factory was pay a machinist In california to just make

645
00:31:53,880 --> 00:31:56,000
Speaker 2: them one by. One so this guy would like show

646
00:31:56,120 --> 00:31:58,320
Speaker 2: up every week or whatever with a paper bag full

647
00:31:58,360 --> 00:32:01,200
Speaker 2: of metal latches to put, on you, know the beautiful

648
00:32:01,200 --> 00:32:02,280
Speaker 2: doors of the beautiful car of the.

649
00:32:02,360 --> 00:32:04,080
Speaker 3: Future so much for the economies of.

650
00:32:04,120 --> 00:32:08,480
Speaker 2: Scale, yeah, right, right your your marginal cost is high

651
00:32:08,520 --> 00:32:08,720
Speaker 2: at this.

652
00:32:08,840 --> 00:32:12,240
Speaker 4: Point this is not. Good we'll get to more of,

653
00:32:12,240 --> 00:32:14,040
Speaker 4: this but this is the kind of thing moments in

654
00:32:14,120 --> 00:32:16,000
Speaker 4: industrial policy with your Host Tim.

655
00:32:16,000 --> 00:32:17,720
Speaker 5: Harford, yeah BUT.

656
00:32:17,840 --> 00:32:20,120
Speaker 4: I, Mean delriian have kind of got themselves into this

657
00:32:20,240 --> 00:32:24,440
Speaker 4: situation where the skills exist to make these cars, work

658
00:32:24,720 --> 00:32:28,080
Speaker 4: but not In Northern, ireland which where their. Shipbuilders they

659
00:32:28,080 --> 00:32:30,560
Speaker 4: exist in The United. States and so you're shipping these

660
00:32:30,840 --> 00:32:33,760
Speaker 4: bad cars to THE us and then lavishing all this

661
00:32:33,920 --> 00:32:37,240
Speaker 4: extra expense and all this extra skill to make them actually.

662
00:32:37,280 --> 00:32:42,560
Speaker 5: Work and yet for a, moment for a, moment people.

663
00:32:42,320 --> 00:32:44,640
Speaker 2: Are very excited about these. Cars when they get to,

664
00:32:44,680 --> 00:32:48,040
Speaker 2: dealers it's. News you, know local news might do a.

665
00:32:48,080 --> 00:32:51,160
Speaker 2: Story the cars are actually selling for more than the sticker,

666
00:32:51,200 --> 00:32:53,440
Speaker 2: price because everybody wants one and there aren't that many,

667
00:32:53,840 --> 00:32:57,440
Speaker 2: everybody you, know rich people want them. Anyway and at

668
00:32:57,440 --> 00:33:00,440
Speaker 2: some point in the second half of nineteen eighty, One

669
00:33:00,440 --> 00:33:03,520
Speaker 2: DeLorean is telling the factory, like increase, production you, know

670
00:33:03,600 --> 00:33:06,680
Speaker 2: let's get up to, scale let's get more. Cars and

671
00:33:06,760 --> 00:33:13,320
Speaker 2: then comes the. Winter the winter is. Bad sales often

672
00:33:13,360 --> 00:33:16,600
Speaker 2: go down for cars in the. Winter in, addition it's

673
00:33:16,680 --> 00:33:20,480
Speaker 2: nineteen eighty. One Paul volker is hiking. Rates as we

674
00:33:20,560 --> 00:33:22,960
Speaker 2: have all talked about many, times The Federal reserve is

675
00:33:23,000 --> 00:33:26,720
Speaker 2: basically creating a recession to fight, inflation an economic, winter

676
00:33:27,000 --> 00:33:31,640
Speaker 2: an economic winter along with the climatological meteorological.

677
00:33:31,680 --> 00:33:34,320
Speaker 5: Winter and Now deloreian really is in.

678
00:33:34,320 --> 00:33:38,920
Speaker 2: Trouble they have all these loans they've taken out from the,

679
00:33:38,920 --> 00:33:41,280
Speaker 2: government from private, lenders and they're just not they don't

680
00:33:41,320 --> 00:33:44,520
Speaker 2: have the cash. Flow they're not selling enough cars to

681
00:33:44,560 --> 00:33:47,240
Speaker 2: pay their. Debts and on top of, that on top of,

682
00:33:47,280 --> 00:33:53,040
Speaker 2: that it is becoming clear That John dolorian, executive may

683
00:33:53,080 --> 00:33:56,480
Speaker 2: not be entirely on the, level may not be the

684
00:33:56,760 --> 00:33:58,040
Speaker 2: straight arrow he thought he.

685
00:33:58,160 --> 00:34:00,640
Speaker 3: Was should have known from the, genes should have known

686
00:34:00,680 --> 00:34:01,040
Speaker 3: from the.

687
00:34:01,080 --> 00:34:04,720
Speaker 2: Genes you can't trust a man In genes in, particular

688
00:34:05,040 --> 00:34:10,880
Speaker 2: people start asking questions about millions of dollars That, DeLorean

689
00:34:10,960 --> 00:34:15,680
Speaker 2: the company sent to a firm CALLED Gpd, services AND

690
00:34:15,800 --> 00:34:20,560
Speaker 2: gbd services is is really what winds up turning The

691
00:34:20,600 --> 00:34:23,560
Speaker 2: doloren story from a failing business to a.

692
00:34:23,880 --> 00:34:26,000
Speaker 3: Scandal it wasn't the cocaine in the hotel.

693
00:34:26,080 --> 00:34:26,879
Speaker 5: ROOM i, mean it was.

694
00:34:26,800 --> 00:34:29,960
Speaker 2: The eighties right where the people were putting cocaine in their.

695
00:34:29,960 --> 00:34:33,879
Speaker 5: Coffee AS i understand, IT. GPD gpd was the big.

696
00:34:33,920 --> 00:34:40,560
Speaker 2: Story SO gpd stands For General Product development or Maybe

697
00:34:40,800 --> 00:34:45,040
Speaker 2: Grand Prix. Drivers i've actually seen both. Reported, okay this

698
00:34:45,200 --> 00:34:48,480
Speaker 2: is a suspicious. Already you're setting checks To General Product development

699
00:34:48,640 --> 00:34:51,479
Speaker 2: firm is registered In. Panama but don't. Worry the checks

700
00:34:51,480 --> 00:34:54,319
Speaker 2: aren't going, There they're going to a po box In

701
00:34:54,400 --> 00:34:56,600
Speaker 2: genevaobox thirty.

702
00:34:56,600 --> 00:34:59,439
Speaker 5: Three, Okay and these are bad.

703
00:34:59,520 --> 00:35:03,400
Speaker 2: Size swiss banks were Really swiss banks when if you

704
00:35:03,480 --> 00:35:05,400
Speaker 2: really you could really trust them to hide your.

705
00:35:05,400 --> 00:35:08,839
Speaker 4: Money Swiss bank Is panamanian's tax. Lawyers it's pretty, good,

706
00:35:08,920 --> 00:35:09,759
Speaker 4: right nothing can go.

707
00:35:09,840 --> 00:35:10,080
Speaker 5: Wrong.

708
00:35:10,400 --> 00:35:15,320
Speaker 2: Yeah in, All delarian sent something like eighteen million dollars

709
00:35:15,400 --> 00:35:18,839
Speaker 2: TO Gpd, services and from What i've Read i'm pretty

710
00:35:18,880 --> 00:35:20,400
Speaker 2: sure at least some of, that and maybe all of

711
00:35:20,400 --> 00:35:24,240
Speaker 2: it was actually just paper, checks big paper checks mailed

712
00:35:24,239 --> 00:35:24,799
Speaker 2: to that peo.

713
00:35:24,880 --> 00:35:31,960
Speaker 5: Box so eventually investigators figured out THAT Gpd services had

714
00:35:31,960 --> 00:35:36,040
Speaker 5: been created by a guy Named Colin, chapman who was

715
00:35:36,080 --> 00:35:39,319
Speaker 5: the head Of, lotus That british car. Maker oh, yes

716
00:35:39,520 --> 00:35:44,640
Speaker 5: the submarine submarine da, Dada oh, YES i.

717
00:35:44,640 --> 00:35:46,759
Speaker 4: Said Colin chapman's a bond. Villain is this what we're?

718
00:35:46,800 --> 00:35:48,319
Speaker 3: Saying, yes he is.

719
00:35:48,480 --> 00:35:49,799
Speaker 5: At least a small time bond.

720
00:35:49,880 --> 00:35:52,959
Speaker 2: Villain you, Know, lotus as we mentioned, earlier had done

721
00:35:53,000 --> 00:35:55,560
Speaker 2: work helping to design the, Car so like that doesn't seem.

722
00:35:55,640 --> 00:35:56,960
Speaker 5: Villain it's, like, Oh lotus did this.

723
00:35:57,000 --> 00:36:00,239
Speaker 2: Work delarian's sending this money to this firm set up

724
00:36:00,280 --> 00:36:06,000
Speaker 2: by The lotus. Guy but but the Money delareian sent

725
00:36:06,040 --> 00:36:09,799
Speaker 2: TO gpd at eighteen million or so, dollars never made

726
00:36:09,800 --> 00:36:13,279
Speaker 2: it To. Lotus, Oh lotus got Separately fritz. Work and

727
00:36:13,320 --> 00:36:16,520
Speaker 2: so what happened to that? Money at least according to,

728
00:36:16,560 --> 00:36:21,440
Speaker 2: prosecutors these guys took. It delorian was accused of taking

729
00:36:22,000 --> 00:36:24,880
Speaker 2: something like eight million dollars and using it to buy

730
00:36:25,360 --> 00:36:30,640
Speaker 2: a company In utah that built. Snowcats snow. Groomers so

731
00:36:30,840 --> 00:36:33,480
Speaker 2: the LOTUS. Cfo what happened in? Court the LOADUS cfo

732
00:36:33,760 --> 00:36:37,520
Speaker 2: pleaded guilty to fraud and was sentenced to three years in.

733
00:36:37,520 --> 00:36:40,840
Speaker 2: Prison the judge in the case called it a bear,

734
00:36:40,920 --> 00:36:46,680
Speaker 2: faced outrageous and massive. Fraud delorian couldn't be extradited to

735
00:36:46,719 --> 00:36:49,799
Speaker 2: THE uk UNDER i guess the. Law you don't get

736
00:36:49,800 --> 00:36:50,480
Speaker 2: extradited for.

737
00:36:50,480 --> 00:36:50,920
Speaker 5: This kind of.

738
00:36:50,920 --> 00:36:53,680
Speaker 2: Thing let's do The dolorian is running the, company he

739
00:36:53,760 --> 00:36:56,800
Speaker 2: wants to save. It things are going, down and around

740
00:36:56,800 --> 00:37:00,040
Speaker 2: this time he is approached by his, neighbor his friendly

741
00:37:00,080 --> 00:37:03,720
Speaker 2: neighborhood drug. Dealer it is Southern. California so the neighbor

742
00:37:04,080 --> 00:37:07,479
Speaker 2: basically Offers delorian the chance to get in on a drug.

743
00:37:07,520 --> 00:37:10,279
Speaker 2: Deal In delorian's, mind it's, like, OH i can use

744
00:37:10,360 --> 00:37:14,080
Speaker 2: that money to save the. Company and so this is

745
00:37:14,120 --> 00:37:16,960
Speaker 2: How delorian ends up in that hotel room with the

746
00:37:17,080 --> 00:37:20,879
Speaker 2: bag full of cocaine because his, neighbor the nice drug,

747
00:37:20,880 --> 00:37:24,440
Speaker 2: dealer is secretly working for THE. Fbi don't trust a

748
00:37:24,480 --> 00:37:26,360
Speaker 2: neighbor who offers you a drug, deal is the.

749
00:37:26,440 --> 00:37:28,840
Speaker 5: Lesson this is a, setup, classic classic.

750
00:37:28,880 --> 00:37:34,120
Speaker 2: Setup So delurian gets, arrested you, know, handcuffed arrested and

751
00:37:34,160 --> 00:37:39,080
Speaker 2: a week later or, so the company files for. Bankruptcy

752
00:37:39,440 --> 00:37:43,160
Speaker 2: the Last delorian came off the line in late nineteen eighty.

753
00:37:43,200 --> 00:37:47,839
Speaker 2: Two in nineteen eighty, Four delorian goes to trial for

754
00:37:48,040 --> 00:37:51,160
Speaker 2: financing the cocaine, deal and he argues in court.

755
00:37:51,160 --> 00:37:51,680
Speaker 4: That he was.

756
00:37:52,000 --> 00:37:54,239
Speaker 5: ENTRAPPED i, mean he kind of was.

757
00:37:54,360 --> 00:37:58,560
Speaker 4: RIGHT I, mean What i'm curious, About, jacob is do

758
00:37:58,600 --> 00:38:01,080
Speaker 4: we know why they decided that they were going to

759
00:38:01,120 --> 00:38:03,640
Speaker 4: do this thing with THE? Fbi because it seems really.

760
00:38:03,719 --> 00:38:06,720
Speaker 4: Roundom he's running a car company and then THE fbi

761
00:38:06,800 --> 00:38:08,719
Speaker 4: decide they're going to try and get him involved in

762
00:38:08,760 --> 00:38:11,799
Speaker 4: a drug. Deal did they have some reason to believe it?

763
00:38:11,840 --> 00:38:13,680
Speaker 5: Is it's, weird, RIGHT i?

764
00:38:13,800 --> 00:38:16,600
Speaker 2: Think and so going back to THAT Hillel levin, book

765
00:38:16,600 --> 00:38:18,680
Speaker 2: which is the best source book THAT i found on,

766
00:38:18,719 --> 00:38:21,960
Speaker 2: this he talks about this, neighbor And i'm quoting, here

767
00:38:22,080 --> 00:38:24,640
Speaker 2: had been caught in a drug deal by federal authorities

768
00:38:24,680 --> 00:38:27,799
Speaker 2: and to reduce his, sentence agreed to be a confidential

769
00:38:27,840 --> 00:38:30,040
Speaker 2: informant in other narcotics.

770
00:38:30,120 --> 00:38:33,520
Speaker 3: Investigations so the neighbors shopping around for deals that he

771
00:38:33,560 --> 00:38:34,640
Speaker 3: can turn over to THE.

772
00:38:34,719 --> 00:38:37,440
Speaker 4: Fbi it seems that way that is the BEST i

773
00:38:37,480 --> 00:38:41,880
Speaker 4: can figure out maybe the neighbors Thought delorian was a likely,

774
00:38:42,160 --> 00:38:44,759
Speaker 4: prospect and he was. Right delorian was a likely.

775
00:38:44,800 --> 00:38:48,000
Speaker 5: Prospect in any, case the jury actually agreed With.

776
00:38:48,080 --> 00:38:50,640
Speaker 2: Delaurian if, you you, know are in a room full

777
00:38:50,680 --> 00:38:53,040
Speaker 2: of cocaine and you say it's as good as gold

778
00:38:53,200 --> 00:38:53,400
Speaker 2: and a.

779
00:38:53,480 --> 00:38:55,640
Speaker 5: Jury finds you're, interapt you are not. Guilty and that

780
00:38:55,800 --> 00:38:56,680
Speaker 5: is what a jury.

781
00:38:56,719 --> 00:38:59,200
Speaker 2: Found so there were also a bunch of civil, cases

782
00:38:59,239 --> 00:39:02,040
Speaker 2: people trying to get their money. Back one LAWSUIT i

783
00:39:02,040 --> 00:39:07,360
Speaker 2: found particularly interesting was THE uk government Sued Arthur, anderson

784
00:39:07,640 --> 00:39:11,360
Speaker 2: the accounting firm that was the accounting firm For. Delorian

785
00:39:12,400 --> 00:39:15,400
Speaker 2: the government is arguing That Arthur anderson should have detected the,

786
00:39:15,400 --> 00:39:18,040
Speaker 2: fraud and in the End Arthur anderson wound up paying

787
00:39:18,120 --> 00:39:21,200
Speaker 2: tens of millions of dollars to THE uk government in a.

788
00:39:21,239 --> 00:39:24,719
Speaker 4: Settlement, yeah you don't hear the Name Arthur anderson that much.

789
00:39:24,760 --> 00:39:26,040
Speaker 4: Anymore why is that.

790
00:39:28,120 --> 00:39:29,680
Speaker 5: They were The enron, accountant?

791
00:39:30,040 --> 00:39:32,839
Speaker 2: Right they were the ederal, accountant and that one Being

792
00:39:32,960 --> 00:39:35,600
Speaker 2: enron's accountant was so bad that they ceased to.

793
00:39:35,719 --> 00:39:38,560
Speaker 5: Exist right after that art, existing there was no More

794
00:39:38,640 --> 00:39:39,480
Speaker 5: Arthur edwards.

795
00:39:39,200 --> 00:39:42,880
Speaker 4: Caution retails is all about learning lessons from historical. Mistakes

796
00:39:42,920 --> 00:39:44,480
Speaker 4: AND i would like to get it on record That

797
00:39:44,600 --> 00:39:47,839
Speaker 4: Arthur anderson clearly did not learn the lesson of this. Case.

798
00:39:48,040 --> 00:39:48,719
Speaker 4: Rip Arthur.

799
00:39:48,760 --> 00:39:54,240
Speaker 2: Anderson delarean of course got sued, too and ultimately wound

800
00:39:54,280 --> 00:39:56,960
Speaker 2: up giving a lot of his, money most of his,

801
00:39:57,000 --> 00:40:01,040
Speaker 2: money his, mansions his riches to his. Creditors people did

802
00:40:01,080 --> 00:40:02,000
Speaker 2: get money back out of.

803
00:40:02,080 --> 00:40:03,919
Speaker 3: Him wait a, Minute we've got to go back in time,

804
00:40:04,000 --> 00:40:07,440
Speaker 3: here because we didn't talk about the. Movie we didn't talk.

805
00:40:07,280 --> 00:40:07,719
Speaker 4: About back to The.

806
00:40:07,760 --> 00:40:10,000
Speaker 2: Future, true we only mentioned in passing and it came

807
00:40:10,200 --> 00:40:13,840
Speaker 2: just like a little bit too eight For, delorian right eighty,

808
00:40:13,840 --> 00:40:16,600
Speaker 2: five they're already. Done SO i was the target audience

809
00:40:16,640 --> 00:40:18,520
Speaker 2: For back to The. FUTURE i was a child when

810
00:40:18,560 --> 00:40:21,279
Speaker 2: it came out in nineteen eighty, five AND i would

811
00:40:21,360 --> 00:40:23,640
Speaker 2: not have known what A delorian was. LIKE i wasn't

812
00:40:24,120 --> 00:40:25,040
Speaker 2: particularly into.

813
00:40:24,880 --> 00:40:28,440
Speaker 5: Cars but the car was like the star of that.

814
00:40:28,560 --> 00:40:28,799
Speaker 4: Movie.

815
00:40:28,880 --> 00:40:32,360
Speaker 2: Right there's actually a line When MICHAEL. J fox looks

816
00:40:32,360 --> 00:40:35,320
Speaker 2: at the car and, says you built a time machine

817
00:40:35,560 --> 00:40:35,920
Speaker 2: out of A.

818
00:40:36,000 --> 00:40:38,880
Speaker 3: Dolorean and WHEN i was a kid watching, THAT i was, like,

819
00:40:39,200 --> 00:40:41,080
Speaker 3: oh they built a time machine A delorian because it's

820
00:40:41,120 --> 00:40:44,799
Speaker 3: such a cool looking. Car incredible. ADVERTISING i of course

821
00:40:44,960 --> 00:40:47,440
Speaker 3: realized now after hearing this whole story that for the

822
00:40:47,480 --> 00:40:50,600
Speaker 3: adults in the, theater this was a comedy. Line this

823
00:40:50,760 --> 00:40:54,319
Speaker 3: was a joke, line which is you built a time

824
00:40:54,360 --> 00:40:57,560
Speaker 3: machine out of A. DeLorean i love. It they was

825
00:40:57,600 --> 00:40:58,880
Speaker 3: in the news and was kind of a.

826
00:40:58,920 --> 00:41:02,400
Speaker 2: Failure in a, minute we are going to get the

827
00:41:02,520 --> 00:41:06,719
Speaker 2: Classic Tim harford cautionary, tales big lesson from.

828
00:41:06,520 --> 00:41:09,000
Speaker 5: The, story and we're also gonna have one last.

829
00:41:08,920 --> 00:41:11,839
Speaker 2: Fun fact from the life Of John delorian when late

830
00:41:12,080 --> 00:41:13,239
Speaker 2: move From John.

831
00:41:13,280 --> 00:41:36,280
Speaker 5: Dolraian so there is a real.

832
00:41:36,200 --> 00:41:37,520
Speaker 2: Question THAT i have To, tim AND i was truly

833
00:41:37,560 --> 00:41:40,480
Speaker 2: happy when you agreed to do this show with us

834
00:41:39,960 --> 00:41:44,360
Speaker 2: BECAUSE i wanted to talk about industrial. Policy is it

835
00:41:44,400 --> 00:41:46,240
Speaker 2: a good idea or when is it a good? Idea

836
00:41:46,360 --> 00:41:48,360
Speaker 2: or how is it a good idea for a government

837
00:41:48,440 --> 00:41:51,440
Speaker 2: to try and direct the. Economy that's the big question, Here.

838
00:41:51,360 --> 00:41:53,719
Speaker 4: Yeah a big. Question it's a very big, question and

839
00:41:53,800 --> 00:41:56,600
Speaker 4: it's at the heart of The dolorean. Story the basic

840
00:41:56,640 --> 00:42:00,640
Speaker 4: idea with industrial policy is government might want to do,

841
00:42:01,600 --> 00:42:06,920
Speaker 4: something something, Something the details kind of matter to help

842
00:42:07,120 --> 00:42:12,880
Speaker 4: certain industries. Flourish it's been fashionable and unfashionable over. Time

843
00:42:13,239 --> 00:42:17,520
Speaker 4: so there was this moment in the, fifties the, sixties

844
00:42:17,560 --> 00:42:21,960
Speaker 4: the seventies where lots of developing countries In Latin, america So,

845
00:42:22,000 --> 00:42:26,920
Speaker 4: brazil for, example lots Of african economies would be adopting industrial. Policy,

846
00:42:26,960 --> 00:42:30,720
Speaker 4: like if we're going to compete on a global scale

847
00:42:30,880 --> 00:42:33,920
Speaker 4: with The americans and with The, europeans our guys are

848
00:42:33,920 --> 00:42:36,360
Speaker 4: going to need a little bit of help to get

849
00:42:36,400 --> 00:42:40,080
Speaker 4: started because of this problem that we described the economies of.

850
00:42:40,120 --> 00:42:44,759
Speaker 4: Scale otherwise we'll just be these, rural agrarian economies for

851
00:42:45,239 --> 00:42:48,640
Speaker 4: the rest of. Time in many cases it didn't. Work

852
00:42:48,719 --> 00:42:51,799
Speaker 4: Governments Asmid deloreans spent a lot of, money didn't get

853
00:42:51,840 --> 00:42:56,360
Speaker 4: anything in, return so it then really fell out of.

854
00:42:56,440 --> 00:43:00,680
Speaker 4: Fashion in the nineteen eighties the nineteen, nineties there came

855
00:43:00,760 --> 00:43:04,000
Speaker 4: to be this consensus sometimes called The Washington consensus or

856
00:43:04,040 --> 00:43:07,600
Speaker 4: that covered various things that government should just get out

857
00:43:07,600 --> 00:43:10,400
Speaker 4: of the. Way, yeah you need to set the, rules

858
00:43:10,480 --> 00:43:13,040
Speaker 4: you need to enforce the rule of. Law you need efficient,

859
00:43:13,120 --> 00:43:17,600
Speaker 4: laws efficient, bureaucracies roads that, work that kind of. Stuff

860
00:43:17,880 --> 00:43:21,120
Speaker 4: but you do not want to be giving loan guarantees

861
00:43:21,560 --> 00:43:24,759
Speaker 4: To john Z. DeLorean i stand by that you still

862
00:43:24,760 --> 00:43:26,840
Speaker 4: do not want to be given giving loan guarantees To

863
00:43:26,880 --> 00:43:29,840
Speaker 4: john Z. Delorian but then something has, changed which is

864
00:43:29,840 --> 00:43:32,920
Speaker 4: the rise Of. China AND i think the superficial perception

865
00:43:33,200 --> 00:43:37,200
Speaker 4: Is china's doing really well and The chinese government intervenes

866
00:43:37,239 --> 00:43:40,280
Speaker 4: in all kinds of. Ways so hasn't The chinese government

867
00:43:40,520 --> 00:43:43,680
Speaker 4: proved that industrial policy, works including in?

868
00:43:43,800 --> 00:43:47,239
Speaker 2: Cars notably right That china poured tons of money into

869
00:43:47,280 --> 00:43:50,279
Speaker 2: the car industry and last and last and, less and

870
00:43:50,320 --> 00:43:50,600
Speaker 2: then it.

871
00:43:50,640 --> 00:43:52,359
Speaker 5: Worked now they have this amazing car.

872
00:43:52,360 --> 00:43:53,200
Speaker 3: Industry they have.

873
00:43:53,200 --> 00:43:55,319
Speaker 4: This amazing car, industry and it's not just. Cars they've

874
00:43:55,360 --> 00:43:58,840
Speaker 4: got this amazing battery, industry solar, panels amazing solar panel,

875
00:43:58,880 --> 00:44:01,880
Speaker 4: industry and a lot of this had government. Support you,

876
00:44:01,880 --> 00:44:04,080
Speaker 4: know The germans had a solar panel industry and it's

877
00:44:04,320 --> 00:44:06,880
Speaker 4: kind of been wiped out by The, chinese for. Example

878
00:44:06,920 --> 00:44:10,719
Speaker 4: so maybe The European, union The United states and so,

879
00:44:10,840 --> 00:44:13,680
Speaker 4: on maybe we need to learn something from The, chinese

880
00:44:13,680 --> 00:44:16,280
Speaker 4: and maybe we need to think again about industrial.

881
00:44:16,280 --> 00:44:18,640
Speaker 3: Policy, well one of the things that The chinese government

882
00:44:18,880 --> 00:44:22,879
Speaker 3: did that is different than The DeLorean story is they

883
00:44:22,960 --> 00:44:26,600
Speaker 3: had dozens and dozens of car. Companies they didn't just

884
00:44:26,719 --> 00:44:31,560
Speaker 3: subsidize one Big chinese car. Company every local region had

885
00:44:31,719 --> 00:44:36,200
Speaker 3: car manufacturers and they competed against each other within the,

886
00:44:36,239 --> 00:44:39,239
Speaker 3: country so that sense of competition was still, there and

887
00:44:39,320 --> 00:44:42,239
Speaker 3: maybe the lesson for THE uk government should have been

888
00:44:42,600 --> 00:44:45,440
Speaker 3: maybe they should have built a factory also In manchester

889
00:44:45,640 --> 00:44:48,160
Speaker 3: from a different car, company or In birmingham or outside Of,

890
00:44:48,200 --> 00:44:52,640
Speaker 3: london where you could have these car companies compete and

891
00:44:52,719 --> 00:44:55,680
Speaker 3: so become more efficient and hopefully come out with a

892
00:44:55,719 --> 00:44:58,000
Speaker 3: car for the ages instead of A. DeLorean.

893
00:44:58,320 --> 00:45:01,320
Speaker 4: YEAH i think that that is a very sensible. Conclusion

894
00:45:01,440 --> 00:45:04,320
Speaker 4: but what you do not want to get yourself into

895
00:45:04,719 --> 00:45:07,759
Speaker 4: is we're going to back this one guy and lend

896
00:45:07,840 --> 00:45:10,759
Speaker 4: him money because first of, all maybe he's not a good.

897
00:45:10,760 --> 00:45:14,040
Speaker 4: Guy turns, out, maybe Mister, delaurian maybe he was a great,

898
00:45:14,080 --> 00:45:16,280
Speaker 4: guy but, NO i think we have reason to suspect

899
00:45:16,280 --> 00:45:19,000
Speaker 4: that he was not a good. Guy but, also you're

900
00:45:19,040 --> 00:45:21,760
Speaker 4: going to be taking advantage of, Right you've put yourself

901
00:45:21,760 --> 00:45:23,680
Speaker 4: in a position where this company suddenly has lots of

902
00:45:23,719 --> 00:45:27,040
Speaker 4: leverage over, You whereas if you're backing five companies and

903
00:45:27,080 --> 00:45:30,000
Speaker 4: one seems to be doing pretty, badly, well you, know

904
00:45:30,000 --> 00:45:32,160
Speaker 4: you could just let, them let them sink they've got

905
00:45:32,200 --> 00:45:36,640
Speaker 4: a lot less. Influence there's a really helpful. IDEA i

906
00:45:36,680 --> 00:45:41,520
Speaker 4: think That it's a phrase that was used by actually

907
00:45:41,520 --> 00:45:43,600
Speaker 4: a GUY i used to work for long time. AGO

908
00:45:43,719 --> 00:45:46,480
Speaker 4: i used to be his research, assistant an economist talk

909
00:45:46,520 --> 00:45:48,640
Speaker 4: Called john. K but one of his books is Called

910
00:45:48,680 --> 00:45:52,080
Speaker 4: The truth About, markets and he in that book, said,

911
00:45:52,120 --> 00:45:56,440
Speaker 4: look the thing that works about capitalism is not the

912
00:45:56,520 --> 00:45:58,640
Speaker 4: kind of all the technical stuff that you read about

913
00:45:58,640 --> 00:46:02,120
Speaker 4: in the economics textbooks about kind of price equilibration and

914
00:46:02,160 --> 00:46:05,520
Speaker 4: competitive equilibrium and all. That it's a much bigger picture.

915
00:46:05,600 --> 00:46:10,320
Speaker 4: Thing it delivers something called disciplined. Pluralism pluralism, is, well

916
00:46:10,360 --> 00:46:12,279
Speaker 4: there are lots of different ideas out, there and you

917
00:46:12,400 --> 00:46:14,759
Speaker 4: never really know which one's going to, work so you

918
00:46:14,840 --> 00:46:18,040
Speaker 4: need space for lots Of maybe it's the gull wings that.

919
00:46:18,360 --> 00:46:21,640
Speaker 4: Work maybe it's an electric, car maybe that's the. Solution

920
00:46:22,080 --> 00:46:24,280
Speaker 4: maybe it's not cars at. All maybe it's like electric.

921
00:46:24,320 --> 00:46:27,280
Speaker 4: Bikes maybe it's strained loads of those of different ways

922
00:46:27,960 --> 00:46:31,160
Speaker 4: to make things that make people. Happy so that pluralism is,

923
00:46:31,200 --> 00:46:34,719
Speaker 4: important but the discipline is also. Important and the discipline

924
00:46:34,960 --> 00:46:37,520
Speaker 4: is where at a certain point you, say, guys this

925
00:46:37,680 --> 00:46:40,719
Speaker 4: is a bad idea and it's not. Working and the

926
00:46:40,719 --> 00:46:44,080
Speaker 4: real challenge for industrial, policy and it is a challenge

927
00:46:44,080 --> 00:46:47,760
Speaker 4: that people can rise to is how does government support

928
00:46:47,800 --> 00:46:50,719
Speaker 4: industries in a way that maintains the, pluralism so you've

929
00:46:50,719 --> 00:46:54,080
Speaker 4: still got lots of ideas and also maintains the. Discipline

930
00:46:54,160 --> 00:46:57,880
Speaker 4: and one way that has worked a lot For East asian,

931
00:46:58,200 --> 00:47:01,080
Speaker 4: economies So, Japan, korea a lot of these economis have

932
00:47:01,120 --> 00:47:04,120
Speaker 4: gone through this process of industrial policy on their way

933
00:47:04,520 --> 00:47:07,680
Speaker 4: to growth has been to rely on export. Markets so

934
00:47:07,719 --> 00:47:11,680
Speaker 4: we're going to back our, companies but only if they

935
00:47:11,719 --> 00:47:14,520
Speaker 4: can do something that somebody wants to. Buy we don't mind,

936
00:47:14,560 --> 00:47:18,200
Speaker 4: subsidizing we don't mind, supporting but if you cannot produce

937
00:47:18,680 --> 00:47:22,040
Speaker 4: some kind of product that somebody outside this country, wants

938
00:47:22,320 --> 00:47:25,280
Speaker 4: there's a. Problem and so the discipline is coming from

939
00:47:25,760 --> 00:47:27,640
Speaker 4: the need to compete on the international.

940
00:47:27,680 --> 00:47:30,600
Speaker 2: Market, okay last, thing AS i, mentioned there's one more

941
00:47:31,400 --> 00:47:34,440
Speaker 2: chandelo in fun fact and is a. Patent you, KNOW

942
00:47:34,480 --> 00:47:36,120
Speaker 2: i love to read a pattern on the, show and

943
00:47:36,160 --> 00:47:37,839
Speaker 2: this is a patent he got late late in, life

944
00:47:37,880 --> 00:47:40,080
Speaker 2: after sort of after our story has. Ended it looks

945
00:47:40,080 --> 00:47:44,080
Speaker 2: like ninety three ninety. Four this is his comeback idea transportation,

946
00:47:44,280 --> 00:47:45,520
Speaker 2: system vehicle and.

947
00:47:45,600 --> 00:47:46,919
Speaker 5: Method you know what it, is.

948
00:47:48,040 --> 00:47:52,120
Speaker 3: Monarel, monarel. Monorail It's.

949
00:47:52,280 --> 00:47:52,800
Speaker 5: Maniel.

950
00:47:53,360 --> 00:47:57,719
Speaker 4: Wow we still got the bond. Esthetic nothing can ever

951
00:47:57,760 --> 00:47:58,279
Speaker 4: go wrong with a.

952
00:47:58,320 --> 00:48:01,920
Speaker 5: Monorail, YEAH i love a bond on a, monorail a. Bonderel,

953
00:48:02,280 --> 00:48:04,080
Speaker 5: tim thank you for doing this with, us.

954
00:48:04,120 --> 00:48:06,480
Speaker 4: Truly oh thank you for inviting. Me it's a. Pleasure

955
00:48:07,080 --> 00:48:09,880
Speaker 4: this really was caution tails plus business. History this is

956
00:48:09,920 --> 00:48:11,319
Speaker 4: what we. Wanted we did.

957
00:48:11,360 --> 00:48:11,520
Speaker 3: It