A Capitalist, Some Communists, and a Car: The Story of the Yugo

This is Lee Habib, and this is Our American Stories, the show where America is the star and the American people. To search for the Our American Stories podcast, go to the iHeartRadio app, to Apple Podcasts, or wherever you get your podcasts. In 1985, Americans were beginning to become acquainted with CDs. Super Mario Brothers. A car from Communist Yugoslavia, imported by an eccentric entrepreneur with a desire to do what men like Henry Ford and Ferdinand Porsche had done before him, fell a cheap everyman car to the masses. The car would go on to be considered one of the worst ever released. Here to tell the story of the Yugo is Jason Vuic, author of The Yugo: The Rise and Fall of the Worst Car in History. Take it away, Jason.

Introducing the New Yugo, a paramount engineering achievement from Yugoslavia.

So, in short, I don’t think it was the worst car ever made. Now, with that being said, I’m not defending it. It was not a good car. It was poorly built, cheaply built, cheap parts, dirty, it was allowed. It didn’t even have a glove box. It didn’t have a radio. You couldn’t move, you couldn’t move the steering wheel up and down to fit the way.

You said.

Sorry, Charlie, it was just you got what you got. It was a moped with four wheels in what American culture kind of required with status and quality, and the Yugo had no status, and the Yugo had very little quality, and so the Yugo became known as the worst car ever sold history, in America or elsewhere. The Yugo’s story really is a meeting of two different things: Communist Yugoslavia and Malcolm Bricklin. Bricklin was from Philadelphia. Originally, I think, he was a Jewish kid from Philadelphia. Then his father moved to Florida. He went to high school, I believe, in Orlando, and attended University of Florida for a little bit before quitting to start businesses. You know, he didn’t drop out because, you know, he couldn’t do the work. He certainly could. He just—he had places to go, and sitting in a biology class wasn’t going to get him there.

That’s the way he saw it.

He was an idea man. “I’ve got an idea, let’s go.” Bricklin was what business school professors have studied him and called him a serial entrepreneur. There’s actually a term: serial entrepreneurship, and that’s selling a business, starting a business, selling a business, you know, going bank, starting another business, but perpetually starting businesses. And Bricklin came out of the era of the 1960s in which franchises were king. You know, every small town in America. If you were the first one in with a McDonald’s, you suddenly became wealthy. You know, you got the next McDonald’s in your territory, in the next McDonald’s.

And that’s how Bricklin saw the world.

He tried to take his father’s handyman hardware stores and franchise it. He had a rented Rolls-Royce and he had scooters in the trunk and he would pull up at, in the ’60s, he would pull up at, you know, small gas stations and try to sell them a scooter franchise to get, you know, young people to buy mopeds at these garages and auto body shops—that kind of stuff. He then tried to import jukeboxes that played little films at your table in, you know, the, you know, when you’re out eating at a restaurant. Then he moved on from Italian scooters to Japanese scooters from Fuji Heavy Industries, and that led to Subaru.

That was the company that made Subaru.

So he brought over the first Subarus and started a dealer network. You know, he got investors; he got dealers that wanted in. And this was the early days of Toyota and

Honda in America.

Subaru was another brand, and so that was what floated his boat.

He was a wheeler-dealer.

He was a talker, a great talker, a great presenter. He was magnetic. People who knew him were always blown away at his presentations, blown away at his personal—how vivacious he was—and full of energy and life, and how committed he was to new projects and ideas. He would have been great for Silicon Valley and pets.com or something like that. You know, he would have run with it and gotten people excited. He used to give presentations for Subaru, and it was when it first came over. It was Subaru, and he would get the dealers to stand up and go, “One, two, Subaru!” and they would cheer and yell and jump up and down and get people excited

to sell.

But when things went south, he never really turned out to be a particularly good administrator, a good manager of businesses.

He didn’t manage his money well.

And his response to when things would go south was to try to find more investors, and when that failed, to just ghost the entire endeavor, try to sell out or get out, go bankrupt, and move on to another project. And so that is how Malcolm Bricklin eventually came to the Yugo. He went from jukeboxes to scooters; from Italy to Japan to Subaru.

Subaru started to tank.

A new family came in and took control of the company if Malcolm would leave, which led him then to kind of a kit car called the Bricklin SV-1, this fiberglass-body, gull-wing door sports car which he named after himself, the Bricklin. That was a major failure, but it was exciting. He promoted soul singers. I read somewhere. Then he got back into cars with the Bertone, the Pininfarina Spider, and when that started to go south, he needed a car desperately, and this is like in 1984, early 1985.

And the car he found was the Yugo.

I mean, he and his boys, his car guys, were walking down a London street.

They were trying to.

Purchase or acquire Aston, these little mini-cars, and that didn’t work. And as they were walking down to London street, the story as one of his car guys saw this little Fiat-looking car, and it had had the mark on it, Yugo. And the guy said, “Yugo, what does this mean?” “Well, ‘J’ is ‘Y’ in Serbo-Croatian language.” So it was a Yugo. And, and men said, “Well, this is a Fiat. You know, we know how to do Fiats. I’ve sold Fiats before. You know, we can certainly,”

Work with this car. “Who makes it?”

“And how much is it? You know, we need a car. We’re going to go bankrupt our importation firm.”

So this is like ’83, ’84.

And so the story is, they begin scouring the world. That’s he and his inner circle of car guys. They were scouring the world looking for cars. The one story is, they tried to get Jaguar. Jaguar wasn’t going to sell to Bricklin.

They were trying to get the Aston.

They were looking all over the place. When they saw this Yugo in London on the street. They looked it up and they contacted the Yugoslavs and set up a meeting. They go over to Belgrade, they fly over. They’ve let the American government know they’re interested in this Yugo car. They let the—you know—and they’ve hired Lawrence Eagleburger. He later, he became Secretary of State. He was an ambassador to Yugoslavia that was really liked by the Yugoslavs. He worked for Kissinger Associates, Henry Kissinger’s consulting firm, and companies would hire Kissinger to give them entrée around

the world at the highest levels.

So once they hired Lawrence Eagleburger, doors at the American Embassy opened. Eagleburger was no longer in government service at that time, and also doors at the Yugoslav government opened. He knew everyone, and he sat on Yugo America’s board, so he went in guns blazing. So they get over there to look at this new car, this Yugo. It’s not new; it was first started in the ’80s, but it was new to Bricklin. And so they stay, I believe, at the Intercontinental in Belgrade—at the hotel—and some workers from the Zastava factory drive these Yugos up to Malcolm Bricklin and park them in the parking lot of the Intercontinental, and he and his assistant, a man named Tony Seminara—a car guy who had worked with Fiats. They start to look at the car, and Tony’s really the car guy, and he opens the trunk, and he opens the hood, and he starts the car and drives it around, and he’s like, “Yeah, this is a Fiat. You know, it’s a simple Fiat.”

I could work with this.

But he opens the trunk and he sees rust in the paint. He sees rust in the paint of a new car. It didn’t mean that the metal was falling apart. It meant that microscopic particles of metal were getting into the paint.

Their quality control was terrible.

They were just grinding metal inside a giant factory. Metal would get in the air, and it would get into the paint in a different part of the factory, which was completely different than the way the Americans did things. You know, you could probably eat off the floor to have surgery in a room where they paint American cars—not the Yugo. And so Tony Seminara actually said to Bricklin, “Malcolm, this is not good.”

We got to get out of here.

“This is bad.” And then they went to the plant.

And you’re listening to author Jason Vuic, and his book is The Yugo: The Rise and Fall of the Worst Car in History. We’re also getting a story of serial entrepreneur Malcolm Bricklin. He’s got a real problem and he’s trying to solve it with what is clearly a subpar car. And by the way, we’re also getting a nice look into Communist Yugoslavia and its manufacturing standards. When we come back, more of this remarkable story: the story of the Yugo and how it came to America and who brought it here? Here on Our American Stories. And we returned to Our American Stories and the story of the Yugo with Jason Vuic, author of The Yugo: The Rise and Fall of the Worst Car in History. When we last left off, Malcolm Bricklin and his car guys had gone to Yugoslavia to check out the Yugo, and what they found had astounded them. There was rust in the paint; the cars were cheaply built, but Malcolm wasn’t deterred from his vision of importing the car to America. So he went to the Yugo plant. Let’s return to the story. Here again is Jason Vuic.

To understand the Yugo, you also have to understand Communist Yugoslavia. During World War II, Yugoslavia had been a kingdom, and it was invaded really from all sides by the Italians, by the Germans. Romania took a piece. The Bulgarians. Yugoslavia was ripped apart and not only was invaded, but went into a civil war: Serbs and Croats and Muslims and others killing each other violently.

And in the middle of all.

This, Tito Josip Broz—he was a Communist organizer—had this wild life. He fought in World War I and became a Bolshevik in a POW camp deep in Russia and came home and worked underground through the ’30s. And when World War II started, he was head of the Communist Party. You know, had maybe 2,000 secret, clandestine members, mostly students in the country. And as the war became more and more violent, the civil war became more and more violent, he was the only one saying, you know, we’re pro-Yugoslav. “Yugoslavia” means “Land of the Southern Slavs.” “Yugo” means “south.” And so he was the only one saying, “Serbs… in Croa.”

You know, he himself, he was a half Croat, half Slovenian. You know, one of his right-hand men was Serbian. Some of his military leaders were Serbian. He had an advisor who was Jewish, and he said, “Join us, join me. We will fight the oppressor. We will stop fighting the civil war, and we will liberate the country.” And by the end of the war he had liberated, largely on his own, whole swaths of Yugoslavia, and the country was freed not really by the Soviets or by the Americans, but by a local Communist leader who was wildly popular. I mean, there were people that didn’t like him, and certainly his rivals were either killed or fled, but Tito had liberated Yugoslavia. He was a war hero along the lines of FDR,

and Churchill.

In Stalin. I mean, he really kind of was that larger-than-life figure, this very popular figure, even in the United States. And in 1948, Stalin was taking over taking over Eastern Europe and was trying to take control of Yugoslavia, and Tito broke away, and so immediately the United States and the West began sending Yugoslavia arms and buying its goods and giving it loans. We gave it Most Favored Nation status. And so, though we were rapidly anti-communists in the United States, if you picked up a paper in the ’50s, Tito was a maverick or a “good communist,” right?

We were very cynical about that.

He wasn’t Soviet. So, fine, he’s a communist, but there’s a developing country. Let him do what he wants. And that was very, very important to us, and so Tito had to kind of skate down the middle.

During the Cold War.

He would buy oil and coal and whatever raw materials from the Soviets for his factories and then sell finished goods to the West. So he was playing both sides. Getting back to the Yugo. Yugoslavia was massively in debt. They lived way beyond their means. Tito dies in 1980, and people are wondering: in 1980, will the Soviets invade? Will there be another civil war? People are wondering, you know, what’s going to happen. The country was getting poorer and poorer. Debts were coming due, and so the Yugoslavs were desperately looking for ways to sell their natural resources, to sell their products—anything and everything they could sell, they wanted to sell—and our State Department helped them. That was what our embassy largely did in the ’80s: tried to get American companies to shake hands with Yugoslav companies; now, chemical and Westinghouse working in the region. And so, one company there, called Zastava.

It was a.

It means “Red Flag,” as in the red flag of communism.

Arms manufacturer, metals manufacturer.

It was a big conglomerate.

It did a lot of different things, and it also began producing military vehicles, and that turned into consumer cars: Fiats. These weren’t bad cars. They were certainly the best of the Eastern European cars, which isn’t saying much. You’re not winning a gold medal there, but it was still better to own a Yugo than a Lada or a Trabant. Trabants were terrible, and the Yugo was a Fiat, and so eventually they had produced millions of cars. About a million Yugos were produced in Kragujevac, a town a couple hours south of Belgrade, not that far, kind of a Youngstown, Ohio, a ruddy industrial town, and that’s where Bricklin went to negotiate bringing the Yugo to the United States. Bricklin was simply looking for a new product. He was kind of down on his luck and re-emerged in the early ’80s with the Pininfarina and Bertone cars. They were Fiats. They were nice little cars, but they were fairly expensive, and they’d already been sold in America and had done well. And his CFO, Ira Edelson, his accounting guy, came to him and said, “Malcolm, if we don’t have a new car—and I think it was like 60 days or 90 days, or several months, whatever—if we don’t find a new car—a new product that these dealers can sell—we will go bankrupt.”

So this is like ’83, ’84.

And so the story is, they begin scouring the world. That’s he and his inner circle of car guys. They were scouring the world looking for cars. The one story is, they tried to get Jaguar. Jaguar wasn’t going to sell to Bricklin.

They were trying to get the Aston.

They were looking all over the place. When they saw this Yugo in London on the street. They looked it up and they contacted the Yugoslavs and set up a meeting. They go over to Belgrade, they fly over. They’ve let the American government know they’re interested in this Yugo car. They let the—you know—and they’ve hired Lawrence Eagleburger. He later, he became Secretary of State. He was an ambassador to Yugoslavia that was really liked by the Yugoslavs. He worked for Kissinger Associates, Henry Kissinger’s consulting firm, and companies would hire Kissinger to give them entrée around

the world at the highest levels.

So once they hired Lawrence Eagleburger, doors at the American Embassy opened. Eagleburger was no longer in government service at that time, and also doors at the Yugoslav government opened. He knew everyone, and he sat on Yugo America’s board, so he went in guns blazing. So they get over there to look at this new car, this Yugo. It’s not new; it was first started in the ’80s, but it was new to Bricklin. And so they stay, I believe, at the Intercontinental in Belgrade—at the hotel—and some workers from the Zastava factory drive these Yugos up to Malcolm Bricklin and park them in the parking lot of the Intercontinental, and he and his assistant, a man named Tony Seminara—a car guy who had worked with Fiats. They start to look at the car, and Tony’s really the car guy, and he opens the trunk, and he opens the hood, and he starts the car and drives it around, and he’s like, “Yeah, this is a Fiat. You know, it’s a simple Fiat.”

I could work with this.

But he opens the trunk and he sees rust in the paint. He sees rust in the paint of a new car. It didn’t mean that the metal was falling apart. It meant that microscopic particles of metal were getting into the paint.

Their quality control was terrible.

They were just grinding metal inside a giant factory. Metal would get in the air, and it would get into the paint in a different part of the factory, which was completely different than the way the Americans did things. You know, you could probably eat off the floor to have surgery in a room where they paint American cars—not the Yugo. And so Tony Seminara actually said to Bricklin, “Malcolm, this is not good.”

We got to get out of here.

“This is bad.” And then they went to the plant.