Bricklin SV-1 - Financial Troubles

Financial Troubles

Under the direction of New Brunswick Premier Richard Hatfield, the provincial government provided financing of $4.5 million for Bricklin's car. The money had been advanced on the assumption that Bricklin needed it to begin the production of cars. In truth, it had paid for the engineering and development of Bricklin's car as well as many of the costs, including salaries of keeping Bricklin's U.S. companies in operation. Also contributing to the company's decline was Bricklin's tendency to assign inexperienced family members to positions on the board directors. These included naming his father Vice-President of Engineering, his mother head of public relations, and designating his sister's husband the company attorney.

During production, the company was constantly in debt, and relied on provincial government support to keep running. One reason is the vehicle was estimated to cost $16,000 to build, but sold for $5000 each to dealers, so the company lost the equivalent in sales of more than two Bricklins for every car built. To further complicate problems, Richard Hatfield was discovered to have secretly funded the failing company to win reelection. After the funding scandal, the government turned down a request for an additional $10 million to keep the company running. The factory shut down, and was put into receivership on September 25, 1975.