The reconstituted DeLorean Motor Company plans to create 450 jobs by 2026 and put $18.5 million into a headquarters facility at Port San Antonio, according to a memo prepared by city staff as City Council considers economic incentives sought by the startup electric vehicle maker.
Next week, City Council will decide whether to approve $562,500 in grant money to be doled out to DeLorean as it meets job milestones over a 10-year time frame.
DeLorean Motor Company announced plans in February to locate its corporate headquarters in San Antonio. The memo sent to council members outlining the incentive recommendations, prepared by the city’s economic development department, detailed the company’s plans to manufacture an electric coupe in Ontario, Canada, beginning in 2024 and later produce an electric SUV.
DeLorean did not respond to a request for comment.
City staffers said the engineering jobs DeLorean hopes to create would “strengthen and diversify San Antonio’s advance manufacturing cluster by adding hundreds of auto R&D positions, whereas currently San Antonio auto advance manufacturing positions are concentrated in production.”
The San Antonio area has in recent years emerged as a growing hub for automotive manufacturing. Last month Navistar opened its new truck factory on the city’s far South Side, joining Toyota, Caterpillar, Aisin Corp.’s AW Texas, and a myriad of other suppliers.
The new DeLorean
The new DeLorean company announced itself in a Super Bowl commercial in February, where it teased production of a new line of electric vehicles in the mold of the iconic 1980s sports coupe model of the same name, complete with its recognizable gullwing-style doors.
It has no connection to the original DeLorean Motor Company, which went bankrupt and closed in 1985, the same year the car gained cultural prominence in the movie Back to the Future.
The brand was bought in 1995 by Stephen Wynne, a mechanic in a Houston-area town who is now an investor in the startup of the same name.
CEO Joost de Vries took helm of the new DeLorean venture in December, after a six-year executive tenure at a luxury electric car producer, Karma Automotive. He also was an executive at Tesla for two years.
“San Antonio boasts a growing component and vehicle manufacturing sector as well as a wide array of global advanced manufacturing operations,” de Vries said in February. “This allows us countless synergies between established companies and suppliers in the broader region. A deep talent pool and a strong local academic ecosystem will foster further innovation.”
DeLorean joins a list of at least 17 automakers planning to electrify their models in coming years.
The company told the city it intends to work with the Southwest Research Institute (SwRI) as part of efforts to utilize local manufacturing expertise, although the vehicles will be manufactured elsewhere.
A spokesman for SwRI said via email Thursday that the institute has met with DeLorean representatives and “had general discussions about potential ways we might be able to support them but nothing beyond that.”
The company is in negotiations with the Ontario Provincial Government to use an existing car factory for its coupe model, and will “likely utilize” another plant in South Carolina for its SUV line, according to the memo from city staffers. Retooling these plants is supposed to take the majority of DeLorean’s capital expenditures.
The memo also says manufacturing workers at these plants will not be directly employed but instead be contracted through a third party.
Details on incentives
City staffers expect the proposed deal to deliver a net benefit of $507,280 to city coffers — calculated by subtracting the incentives and expense of city services from anticipated tax revenue.
Staffers warned that if the incentive deal is not approved, it may “adversely impact DeLorean’s decision to establish their headquarters in San Antonio.”
Port San Antonio officials have said the company will move to its campus this month, where plans are underway to begin construction by the end of this year on a custom office facility with some space for building prototypes.
City staff is recommending a step-based grant structure. If approved by City Council, the city would give DeLorean $1,250 per job upon DeLorean reaching 150 jobs. The remaining incentive money would pay out at 300 and 450 jobs.
The money also would be contingent on DeLorean paying an average annual salary of at least $145,600, with a minimum salary of $50,000. The agreement would commit the company to creating a set number of engineering internships and to participating in the city’s workforce development program, SA Ready to Work.
Staffers also have recommended that City Council nominate the company as a Texas Enterprise Zone, an incentive program from the state government that in this case would offer up to $1.25 million in state sales and use tax rebates.
Some critics have unflatteringly compared the DeLorean venture to the city’s backing of another startup more than a decade ago. In 2010, the city and other local leaders pledged $10 million to a California-based startup called InCube Laboratories, an incubator for biotech companies.
InCube agreed to create 50 jobs and to move three companies in its incubator to the city and establish two more by 2015. The company missed those marks and was given another five year extension, though by 2020 it had only created 44 jobs. It did however succeed in moving and establishing new biotech companies here.