Thu, May 02, 2002 page18

• No joke, infamous Yugos are set for US comeback

  GOING RETRO For many, the Balkan clunkers are best remembered as a source of material for standup comics, but not for their reliability or value for money

  • BLOOMBERG
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  Perhaps you recall the Yugos, tinny US$5,000 cars that shed their parts on US roads, provided owners could get them started.

  The two-door Balkan clunkers now are remembered mostly for the jokes they inspired. Many are still found on Web sites: What do you call the shock absorbers in a Yugo? Answer: Passengers.

  How do you make a Yugo go 60 miles an hour? Answer: Push it off a cliff.

  So who, aside from a new generation of standup comics, wants to see these lemons back on highways, or their shoulders? Try Malcolm Bricklin, a sweet-talking promoter who has gone bankrupt selling gull-wing cars and motorized bikes in the past.

  Bricklin, 63, was behind the Yugo's previous ill-fated US venture in the 1980s. He says he's now assured of high-quality auto production and has enough financing to promise drivers that they'll be satisfied.

  "I've got lots of investors, lots of places to get money," he said. Bricklin is seeking 12 distributors who will each be required to appoint 15 to 25 dealers. All need to provide letters of credit and buy stock in his company, Bricklin said.

  Some more Yugo jokes: How do you double a Yugo's value? Answer: Fill up the gas tank.

  Or, man walks into auto parts store, says: "I'll take a gas cap for a Yugo." "Sounds like a fair trade," says the clerk.

  These old jokes didn't stop PSA Peugeot Citroen, Europe's second-largest automaker, from announcing last week that it agreed to sell up to 5,000 engines a year to Yugoslavia's Group Zastava Cars, where the Yugos were manufactured.

  The engines will enable Zastava to meet West European pollution regulations, increase exports and rebuild after a decade of war and economic collapse in Yugoslavia.

  The Zastava factory in Serbia, damaged by a NATO air strike in 1999, managed to resume production with funds from Slobodan Milosevic's government.

  Still, whether this plant can produce the 60,000 cars that Bricklin says he intends to sell by next year is debatable, to say the least. The factory only made 2,000 cars in the first quarter, and plans to raise output to 2,000 a month by May.

  By the way, know what makes a Yugo faster? Answer: A tow truck.

  Likewise, Yugo owners were glad the rear window was heated.

  It kept their hands warm while pushing.

  Whatever his shortcomings, Bricklin has a flair for sniffing out trends. Sometimes he's ahead of his time. In 1968, Bricklin and a partner were the first to import Subaru cars from Japan.

  Then Bricklin left to build his gull-wing "safety car," the Bricklin SV-1, in the Canadian province of New Brunswick.

  After turning out a few thousand cars, the venture ended badly for Bricklin -- and worse for workers and others stuck with his unpaid debts of US$30 million.

  In 1985, he talked Zastava into giving him the US import rights to its model, built in Eastern Europe and based on outdated Fiat technology.

  "The people at the factory still remember those days as the finest time in their lives," he says.

  Not so the Americans who bought their output. The Yugos were the cheapest new cars on the block, but even Bricklin concedes they flopped because of poor quality. The workers had little incentive because "communism was still in force," he says.

  Yugo imports folded in 1992 and Bricklin then tried his hand developing a bicycle powered by a 12-volt electric motor. That venture too went bust and investors lost several million.

  While some owners boasted on Web sites that their Yugos had chalked up tens of thousands of miles, many more simply abandoned their cars when they stopped running and couldn't be repaired.

  One Web site depicts junked Yugos that a Manhattan art professor's students remodeled into everything from a Yugo toaster and Yugo bath with running shower to a Yugo Porto-potty.

  Now, after "vegetating" in Colorado a few years, Bricklin is back with a line of new Yugos, touting big plans and even bigger promises. "The car business is in my blood," he says.

  Bricklin's company, Zastava Motor Works, will be based in Mahwah, New Jersey. The new Yugos or ZMWs -- initials that sound like another car -- will sell for US$5,000 to US$10,000, again making them the cheapest new cars on the block.

  Bricklin says Zastava will be able to invest in quality car production since the war left the once overmanned factory with fewer workers to pay. Presumably, the flow of Peugeot engines will grow, and US dealers will be found to push the cars.

  ``He does have a magic touch where rounding up dealers is concerned,'' said David Davis, editorial director of Primedia Inc's Motor Trend magazine.

  "The Koreans have a huge advantage, but you can't under-estimate him." In the 1980s, the Yugo collided with tough competition from South Korea's Hyundai Motor Co, which also imported cheap, low-quality cars. Now Hyundai is about to sell pricier models from a new factory in Alabama, leaving the bargain basement wide open for Bricklin.

  Hey, wonder if the new Yugo's manual is like the old one.

  That had a bus schedule.
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