The Sextant Christopher Newport University’s On-Line History Journal

Vol. 9, Fall/Winter 2012-13

On September 24, 2008 Angela Merkel, the German Chancellor, made a bold announcement. Merkel vowed that Germany would not give up control of the Volkswagen Company despite the European Union courts demanding the country do so, and that she personally was standing behind this decision. She stated, “That’s the position of the German government after thorough review, and we’ll maintain that position before the European Commission with all our power and clarity.”[1] Germany and Volkswagen are currently involved in a controversial court case about ownership of the company, but this controversy is not new. In 1960, Volkswagen became a public limited company and sold 60 percent of its shares, but the German government kept 40 percent of them and maintained its veto power on the Volkswagen board. [2] The European Union (EU) has stated that Germany’s partial ownership of the company along with its possession of the veto power breaks fair trade and EU laws, and has taken Germany to court several times, most recently in 2007. Germany has lost every court case, but has been unwilling to go through with court orders to give the company up, maintaining that they want to keep Volkswagen German. [3] Because Volkswagen came to symbolize German recovery after World War II, the country formed a strong attachment to this company and has continued to violate European Union law to keep this national icon German.

The Volkswagen Company has been steeped in controversy almost from its conception. Volkswagen came from an idea that Adolf Hitler and Ferdinand Porsche had, to make a car that was affordable to the masses, a people’s car, a Volkswagen.  After World War II, the British Allies briefly took over the company, as it was in their occupation zone, and started to let Volkswagen make cars again to offset the cost of maintaining their German zone. Because of this, the Allied government gave Volkswagen resources and it was able to rebuild much faster than any of the other German car companies, allowing it to become a symbol of Germany recovery. Germany’s economy experienced a remarkable economic recovery after World War II. Within a few years it had a strong economy with low unemployment rates; this is often referred to as Germany’s economic miracle, and the Volkswagen company played a huge role in this success.[4]

Although Volkswagen has been at the center of controversy many times over the last fifty years, surprisingly little has been written on the topic. However, historians have debated the role of German identity and the different factors that led to Germany’s economic miracle after the war. Both of these subjects directly tie into the Volkswagen Company since Volkswagen helped Germany to achieve its “economic miracle” and, consequently, became a national icon for Germany.

In Rudy Koshar’s essay entitled “Building Pasts: Historic Preservation and Identity in Twentieth-Century Germany,” he argues that buildings and monuments can be a source of national identity. He believes this is true because every building and monument has a history, which explains how and why people built these structures. Koshar states, “In the West nations (or classes, or other social groups) are seen as collective individuals whose “essence’ depends on things they appropriate and “objectify’ through display, performance, and preservation. These objects can of course include historic buildings and monuments.”[5] Kosher believes that a country’s history is the main aspect of its identity. He also believes that a country’s identity is seen by the state of its buildings. For example, if a country takes pride in its buildings and maintains them, then the country will have a more positive national identity. The Nazis went to great lengths to restore old buildings and poured money into architectural and preservation projects, so Kosher believes that during this time period the German people had positive German identities.[6]

 Charles Maier argues in his book The Unmasterable Past: History, Holocaust, and the German National Identity, that national identity is based on the past, and since Germany’s recent past was tainted by the Holocaust, the German people cannot move on. He believes that museums will help Germans come to terms with their past so they can develop a more positive national identity. In many German museums, when referencing World War II, they never refer to themselves as the Germans, but rather the Fascists. Maier focuses on how museums can show what the country is feeling in regards to national identity. He talks about how some museums from the 1960s try to paint the Germans in a better light, stating “concentration camps are evoked almost exclusively as centers for persecuting political dissenters: Auschwitz, Treblinka, and the other extermination centers are hardly cited: Jewish victims seem an embarrassment.”[7] In the late 1980s a committee of experts for a new German historical museum wrote,

The museumÉis to stimulate argumentation, but also to offer possibilities for identification. Above all, the museum should help the citizens of our land-as Germans and Europeans, as residents of a region, and as members of a worldwide civilization-to become clear who they are, where they are coming from, where they stand, and in what directions they can go. For them and for visitors from other countries the museum should provide a survey of German history in its European connections and its inner diversity-neither excusing nor accusatory, but sober, self-critical, and self-aware.[8]

Maier thinks that the German identity today is shown only in extreme circumstances, such as during the Olympics or when German citizens have been taken hostage. During these situations, the country will unite behind its common identity, but he believes that this is more of an instinctual behavior. He claims personal empathy towards Germany will grow as Germans learn more about their past and accept it.

In James Dow and Hannjost Lixfeld’s article titled “National Socialistic Folklore and Overcoming the Past in the Federal Republic of Germany,” they argue that much of Germany’s folklore and past are tied up in the shameful identity of the Nazis. They believe that there are two national identities in Germany: those who recognize their past and those who pretend that the Holocaust never existed. This is because folklore helps to make up a national identity and when some of the population denies the Holocaust they are not accepting their true national identity. The Nazis created new folklore and stories while they were in power to build the ideals of the Nazis into German identity. This left much of the population confused to what their real identity was when the Nazis were no longer in power.[9]

Kosher believes correctly that historic buildings and monuments make up a part of German identity. As he noted, there are histories behind every monument and building that helped to make Germany what it is today.  Similarly, cultural icons, such as the Volkswagen Company can play a large part in a country’s identity.  Maier brought up many good points in his evaluation of German identity. The German people, especially in the decades after the war, were lost. They did not know what their true identity was since it was tied up in something so awful, but feelings of national identity were able to emerge in certain circumstances showing that a national identity still existed. I believe that Maier’s view on German identity does not evaluate fully the different aspects that go into a national identity, such as national icons. In James Dow and Hannjost Lixfeld’s article, they mention that there are two German identities because some people have tried to forget the war. Although Volkswagen was one of Hitler’s inventions, after the war it came to represent much more than the Nazis; it was a way that the people could incorporate something that had negative beginnings into something positive.

The economic miracle in Germany after the war has been the center of much scholarship on Germany. Dornbusch, Nolling, and Layard cite many reasons why the economic miracle took place in Germany. The first and most obvious reason they argue, was the Marshall Plan, which allowed Germany to import more than it exported. Another major reason they cite was that Germany picked the right economic ideology for Germany at the time, which involved having a social market economy with free markets and competition when other countries instead maintained welfare states. [10] The last reason they mention is perhaps the most interesting. They state, “the rapid and successful reconstruction process in postwar Germany was largely due to psychological factors in terms of work ethic, initiative, and market behavior, with market relevant institutions still intact.”[11]  Domink Geppert states that Western Europe was able to recover so quickly economically after the war because of welfare capitalism. He believes that the mix between public ownership, combined with assistance from the government, helped Europe to become more stable and prosperous. With the economy doing well, the cultural and social values of the people were able to transition and change to the new consumer world they lived in.[12]  Christian Deubner argues in his work that West Germany was so successful in the time period between 1950 to 1970 because of the many monopolies and oligopolies in industries. He claims that the country was able to make a lot of money by selling their exports cheaper and charging more domestically for these products. [13] While Reinhard Doleschal states that exports had a lot to do with Germany’s strong post war economy. He believes Germany was able to become strong by exporting heavily to countries around the world. He says that Volkswagen was able to quickly become profitable because they started exporting immediately to other European countries who needed cars. [14]

In Domink Geppert’s work, he mentions that government involvement in public companies helped to rebuild the economy. As Volkswagen was one of these companies, I will make the argument that Volkswagen became a symbol of recovery because it helped the economy so much, and was able to do this while using the values that Germans admired. In Christian Dauber’s essay, he says that the massive amount of exporting Western Europe did helped it to recover. Volkswagen, as shown in Doleschal’s article, exported heavily, helping to make the link that Volkswagen was vital in Germany’s economic miracle. I believe that Volkswagen became a symbol of German postwar recovery and that people grew so attached to it because it represented the psychological factors that helped them work hard to recover. Volkswagen showed the German people that it was possible to rebuild and become successful after the war, which helped them all recover as a people.

Volkswagen became a national symbol of Germany because it played an integral part in Germany’s economic miracle, and it accomplished this while representing Germany. The company represented the values and successes that the rest of Germany strived for. A large successful company, not just in Germany but also around the world. Volkswagen was able to rebuild itself even though it came out of the war with very little, as was true of the German people. Germans were able to identify with the company, and as its success grew, it gave them hope.[15] This success helped Volkswagen become a national icon and helped the German people rebuild their identity as they had something to be proud of again.

Since its creation, Volkswagen has been a unique company, with a history unlike any other. To understand the company fully, however,  requires a look into its past. The idea for a people's car was a popular idea in prewar Germany. Many car companies looked into creating a cheap car for the people, such as Opel, but these companies decided that the idea was too impractical and expensive. When Hitler decided that this was an idea he wanted to pursue he tried to get these same car companies that had rejected the idea as impractical to join him on this quest. [16] Many were reluctant to do so but felt pressured to help Hitler. Ferdinand Porsche, however, had had the same vision: to create a car for the people. He started

Ferdinand Porsche

to work with Hitler, who was a close personal friend, to create such a car, and presented his ideas for the car in 1934 to the German government. Not only did Porsche see a people’s car as a practical possession for the people of Germany, he believed that creating a new car company would help Germany’s struggling economy by bringing new jobs to the country.[17] Hitler viewed the project as a way to revamp the whole country. Along with the car he started building the autobahn, the German highway system, as more people, he hoped, would be driving cars. This was part of his plan to show the German people that the Nazi Party created policies that would benefit regular people. He also wanted to keep the theme of the car being a "people's car" by evenly distributing the production of the car in all of the regions of Germany, so everyone could benefit from this new economic stimulant.[18]

Although Porsche thought there would be economic benefits for the creation of a people’s car, overall, it was a costly endeavor, which was the reason none of the other car companies wanted to take part. Once Porsche had the plans for a people’s car Hitler decided to force German car companies to take part in the production of the car to cover some of the costs. He deliberately left out Ford and Opel (General Motors), which were American car companies, because he wanted Germany to be more in control of the German auto industry.[19]  The decision angered other car companies because they believed Volkswagen was getting too much support from the government, and did not think it was fair that they had to help support this company when it would turn into their competition. Tensions became high between the German car industry and the German government over this issue. The government responded to these cries of outrage from the industry by saying, “the task of the German motor industry is not simply to take on projects when the finance is guaranteed by the state, the party or some other organization. Rather it is its duty to solve the economic problems itself in a responsible manner."[20] Just a short time after this announcement the German government decided the Volkswagen Company would remain separated from the rest of the car industry. The government and the car industry decided together that, the government would own Volkswagen, and would be independent of the rest of the motor industry. It was also decided that Volkswagen would have an unlimited budget, and the Volkswagen factory would be made as quick as possible.[21]  The company was renamed Volkswagenwerk Gmbh in 1938 and put under the Deutsche Arbeitsfront (DAF), which was the Nazis’ trade organization, thus becoming fully owned by the German government.[22]

Hitler inspects a Volkswagen cabriolet prototype in 1938

The company’s official aim was "to fulfill the task, set by the FŸhrer and Reichs Chancellor to construct, develop and market the Volkswagen, and to build and market other products of importance to the German economy as a whole."[23] Thus Volkswagen went from a private company to a publicly owned company in a short period of time.

Almost immediately after the company finally did start up, World War II broke out. Hitler and his advisors thought it would be a short war; they decided against turning the Volkswagen factory into an armaments factory. Eventually Porsche convinced Hitler to turn the factory into an armaments factory during the war, as he would earn more money from the company this way, but production levels were low throughout the war. The Volkswagen factory eventually did become an armaments factory in 1940 and started to produce Volkswagen army tanks.[24]
 During the war Volkswagen was bombed, but it had gotten much of the machinery out of its factory and put it in secret or underground factories. Another technique that Volkswagen used to protect the company was to tear down parts of the roof so it looked more damaged than it actually was which stopped the Allies from bombing them more. When Hitler realized the Germans’ were going to lose the war, he ordered factories, such as Volkswagen, to be burnt to the ground so the Allies could not use them. Volkswagen was fortunate enough to be saved by the mayor of the town and the local militia that the Volkswagen factory was in. They realized that the factory could help them rebuild after the war.[25] They protected the factory from the Nazis and handed the factory over to the Allies when they came through. Because of these reasons, Volkswagen came out of the war in better shape than all of the other car companies who had been bombed heavily by the Allies.[26]  Volkswagen also was fortunate enough to be in the British zone during Allied occupation. The Volkswagen factory was only five miles away from the Russian zone, and the fate of the company would have been completely different as the Russians completely disassembled car companies in their control.

The Volkswagen Company was located in the sector of Germany taken over by the British after the war, which helped secure Volkswagen’s good fortune. This helped Volkswagen maintain its "Germanness" because unlike the other Allied sections of Germany, the British did not discriminate against the companies that had worked with the Nazis. The British automatically received control and ownership over Volkswagen as it had been a government owned company, and any government property automatically went to the Allies occupying the zones that it was in. The British felt that if they did discriminate against these companies, it would harm Germany's economic recovery and they would have to pour more money into the economy themselves.[27] This move came with much debate in Great Britain.

The British "Society of Motor Manufacturers and Traders (SMMT)", at first wanted to get rid of the factory because it saw the company as a threat to the British car industry. The British Foreign office and Treasury maintained that the British were there to help the Germans recover not the British car industry, and the Treasury was tired of spending so much money in Germany. Both organizations saw the Volkswagen Company as a way to make money for Germany instead of having to be the ones to provide it. They wanted Volkswagen to start exporting cars to make money for Germany.[28]

The British Allied government in Germany also thought Volkswagen should be reopened as they did not see Volkswagen becoming a threat to the British motor industry. They underestimated the Volkswagen Company and many of their advisors said that there was no way Volkswagen could ever be a threat on the international scale to the British car industries. Part of this reason was because the British engineers were only looking at the armament cars made for war purposes. Since these cars were made for war and had been made so last minute they were not quality cars, so it was believed that the Volkswagen car would never take off because no one would want to own a car that was so bad.  Other British engineers who worked at the plant saw the potential that the car and the factory had and asked the British government to acquire the company for the British.[29] The British government again voiced the opinion that although the plant was a threat because of how large it was, the car itself was not because although it was cheap, no one would want a car that was so non-luxurious, and that it would be a fad that would pass in several years. Sir William Rootes, the head of the British commission looking into Volkswagen, stated,

The vehicle does not meet the fundamental technical requirements of a motorcar. As regards performance and design it is quite unattractive to the average motorcar buyer. It is too ugly and too noisyÉ a type of car like this will remain popular for two or three years, if that. To build the car commercially would be a completely uneconomic enterpriseÉ[30]

This was part of the reason that the British allowed Volkswagen to start producing cars again after the war.  

The British occupation government also realized that it needed Volkswagen. They desperately needed cars, but they were not able to produce British cars during this time, so they had to resort to German cars. Volkswagen became vital to the military government of Germany. The Allied government ended up ordering 20,000 Volkswagen cars for government purposes. This connection to the government helped Volkswagen obtain contracts with the state railway systems and the post office.  Throughout 1945 to 1948, Germany experienced a raw materials crisis, but because of Volkswagen’s work with the Allied governments, and its need for cars, Volkswagen was given priority on these resources. Volkswagen also had its own power plant so it had power when many factories did not.[31]

In 1946, the Board of Trade and the Ministry of Supply went against the Foreign Office and the Treasury over the matter of Volkswagen. The Board of Trade won and the courts decided that Volkswagen would not start exporting and would dismantle. Before this could happen though, in the summer of 1947, the Allies revised their occupation policies and changed one of the key plans to permit "the restoration of German industrial output generally to the levels of 1936."[32] This clause saved Volkswagen from being dismantled and allowed it to start producing more, and by the end of 1947, it began to export.[33]

In 1947, the Allies came out with Directive 50, which clarified what should be done with former DAF property. The DAF, who owned Volkswagen before and during the war, had all of its property confiscated under Control Law 52 and given to the British government in Germany. Directive 50 stated that all former property of the DAF that did not belong to a specific union or charity association would be given to the government of whatever state the enterprise was in. This should have made the issue of Volkswagen’s control easy. Based on this solution, it would go to Lower Saxony, but the Allied government had specifically exempted Volkswagen from the directive. The Allies did not include Volkswagen because there were too many groups who were fighting for ownership of the company. These various groups included: labor unions, Germans who had paid into the savers fund to get a car but never received one, the state of Lower Saxony where the factory was located, and the future federal government of Germany.[34] Also, many were concerned that if they gave the company to Lower Saxony then the state would have too much power, since Volkswagen was such a successful company and potentially made the state dangerous.[35] This left the issue of Volkswagen’s ownership up in the air until 1949.

When the British were getting ready to leave Germany, the issue of who owned Volkswagen became complicated. In 1949, the first federal government of Germany was set up since the war, which meant the Allies were leaving Germany. The British had to decide who they wanted to have ownership of the company and decided that the owners should be either the federal government or the state government of Lower Saxony. The British finally found what they believed to be a compromise in the 202 ordinance. In the   202 Ordinance, they stated that, “In so far as relevant German authorities have not proscribed otherwise, in the name of and under the direction of the federal government, the state of Lower Saxony is to exercise control overÉii) the Volkswagen GmbH."[36] This meant that the state of Lower Saxony would be responsible for the company but would be working on behalf of the federal government until further notice. This created confusion since Lower Saxony thought that it now had complete control over the company but the federal government thought that it still had ownership of the company and that Lower Saxony had to report back to them about all matters. [37]  This issue caused much tension between Lower Saxony and the federal government until 1961 when Volkswagen became a joint stock company.[38] 

Postwar Germany did not have a lot of positive images or symbols after the war. The people were broken down. They were the losers of the war, and they were no longer the “master race.” Volkswagen gave the people something to hope for and showed the German people that Germany could still be on top. Volkswagen not only became a symbol of Germany because of its success but due to the way it achieved this good fortune. According to a New York Times article, “Though outstanding, the case of the Volkswagen is also typical of the whole German comeback in that it embodies the same elements of hard work, devotion to quality, and energetic organizational talents.”[39] Volkswagen reinforced this image in 1955 when it achieved a new record.

By October 1955, Volkswagen had produced 1,000,000 cars at the Wolfsburg factory and to celebrate this momentous achievement, just ten years after the war ended, Volkswagen and the German government held a big celebration. Not only did this show how far Germany and Volkswagen had come since the war, but it went beyond that, as Volkswagen broke all of the previously held production records for all European car manufacturers. Approximately 100,000 Germans gathered at Wolfsburg Stadium to celebrate this achievement, with countries from all over the world sending representations from their countries. France sent Moulin Rouge ballet dancers, Scotland sent bagpipers, and Sweden sent their royal guards to name a few. This showcased how Germany and the rest of Europe had come to view Volkswagen as a symbol of Germany. Not only did Germans view Volkswagen as a national symbol but many countries from around the world shared this view. Each of the countries present sent something that was distinctly from their country, as Germany presented the Volkswagen Beetle, a symbol of its country. This was also a testament to how Volkswagen was helping to change Germany’s image in the world, just ten years after the war ended the countries of Europe were willing to come to Germany to help them celebrate Volkswagen.  The people of Germany also

1946 Volkswagen convertible

Celebrated this achievement with Volkswagen. This was something that the whole nation could celebrate together, and it gave the people of Germany something to be proud of again. It had been a long time since Germany was on top, and so the German people formed an automatic attachment to the company that gave them hope again. [40]

Volkswagen continued to break record after record as the company became stronger and stronger. In 1952, Volkswagen managed to break its own record of the most cars produced in a single year.[41] By December 1955, Volkswagen announced to the world that it had a cash reserve of over 34 million dollars, which was much more than any other company in Europe at that time. [42] Even during the Suez Canal crisis in 1956, Volkswagen still grew and increased its turnover by 20 percent when almost all of the rest of the international car industry had losses. The international media referred to Volkswagen as the “the pacemaker of Germany’s post-war industrial recovery.”[43]

Volkswagen’s people’s car is more commonly known as “The Beetle,” and this brand in itself helped Volkswagen to become a national icon. Unlike most cars that have new models come out every year, the Beetle did not. Although the car improved internally year after year, the shape and look of the car remained the same. This helped it to become a symbol of German recovery because there was a solid image that remained the same. Heinz Nordhoff, who was the head of Volkswagen from 1948 to 1968, announced at a car show in 1954 when asked if there were plans to change the Beetle,

Does anyone seriously believe that we would give up a vehicle type, which has for years brought us such success and so undisputedly holds the number one position in the whole of the European car industry, such that in the USA, where they certainly know their cars, it is recognized as the symbol of the German recovery? We sell the Volkswagen especially in those countries with a large, competitive and from our side highly respected car industry, with one single argument only: Quality![44]

 It was not that the car did not improve, because it did, but the car remained the same on the outside. Every year Volkswagen enthusiasts would wait for the new model of the Beetle to come out to see the small changes designed to improve the car. Because of this, owners of the car grew attached and a cult following of the car started. [45]

Volkswagen’s success helped to make the company and “the people’s car” a national icon for many different reasons, but none as large as the fact that it helped the economy immensely. One of the keys to Germany’s economic recovery was exports. The German economy relied upon exports to bring money into the country and it would not have recovered if it was not able to export as much as it did. In 1955, Fritz Berg, one of the former presidents of the Federation of German Industry in an article entitled “Export Trade is Crucial to The German Economy”  talked about this issue. He stated that exporting was an important part of Germany’s national economy with almost 32 percent of Germany’s GNP being involved in exporting.[46]  By 1956, Germany exported 45 percent of the all cars produced by the German auto industry. Volkswagen was not only one of Germany’s most successful and largest companies, it produced almost half of all cars in Germany. [47]  It was also a huge exporter, so it contributed to Germany’s economic success postwar.

As the Volkswagen became more and more successful, it was obvious that it only made economic sense to move some of the production of the car to the countries where the Beetle was in high demand. Volkswagen strived to export as much as possible, as it wanted to keep the company as German as possible. When it felt that for the company’s well being production needed to be moved to another country, it took the matter very seriously. Still, even after setting up factories overseas, eighty-five per cent of Volkswagen’s production remained in Germany, with approximately 62 per cent of the cars made being exported abroad.[48]

As Volkswagen was a fully German owned company, the government saw it as a great publicity tool. Volkswagen did not mind this role, as not only was it added advertisement, but since the government owned the company, it was exempt from having to pay dividends to the shareholders. Along with being the largest auto manufacturer in Germany, and by far the most successful, Volkswagen also had a good reputation in regards to its treatment of labor. Volkswagen treated its workers well while they stayed at the company.[49] Volkswagen gave its workers higher wages than any other large producer and dividends of 4 percent every year. This was to keep employees loyal to the company. Because of this, Volkswagen was also one of the only major German companies that never had an official strike in the 1950s. The German labor movement used Volkswagen as a symbol of their movement, and highlighted the company as one to be an example to all others. This also helped to establish Volkswagen as a national icon, as the labor movement showed that Volkswagen was not only a successful company, but also one that treated its employees well. [50]

The Volkswagen Company, and more specifically the Beetle, started to become ingrained into German society as being an important part of German popular culture. Books written about the Beetle were not just for an adult audience about maintenance issues, but much more. Many children’s books started to be written about the car such as Thomas and his Volkswagen and The Secret of the Volkswagen “a thrilling story of three young friends Rolf, Harry and Henk who became involved in the leaking of Project 722 for a new Beetle model during their summer holidays in Wolfsburg.”[51] Many other popular German fiction books aimed at children had the Beetle or the Volkswagen factory as main characters in the story, bringing Volkswagen into mainstream popular culture. The 1950’s saw the majority of these books written, since during this time Volkswagen almost seemed like a savior to the people of Germany. Much of the children’s literature and folklore drastically altered during the reign of the Nazis to fit their ideals, as this kind of literature plays a big part in forming a national identity at a young age. This meant that after the war many of the popular children’s books and fairytales were unsuitable, which again left the German people confused about who they were and what to do. When the Volkswagen books came out, they showed the children of Germany something they could be proud of that was distinctly German. The books about Volkswagen became successful quickly just like the company for this reason and helped to establish Volkswagen, and the Beetle, as a national icon. [52]

After Volkswagen started to realize they had become a national symbol of Germany, not just to the German people but to the rest of the world, it started to use its German identity in its advertising campaigns. It made its ads scream out at the viewers that Volkswagen was German in a way that no other car company had ever advertised. One popular ad campaign called “FahrvergnŸgen” used this German word that no one overseas would know to advertise the car. The caption for this ad read,

Let’s be honest. “far-fair-gnu-ghen” is a word you’ve probably never heard of, let alone pronounced. The only way to understand FahrvergnŸgen is to experience it. And the only way to experience it is to drive a Volkswagen. “far-fair-gnu-ghen.’ Some say it’s the precise way a Volkswagen handles, responds, corners and brakes. Others call it a feeling you get in a Volkswagen that’s just different from any car made in Japan or America. Still others express it as the distinct blend of engineering features such as MacPherson struts, negative roll radius, independent torsion beam axles, all in perfect balance. And there are a lot of folks who say “No sprechen Sie Deutsch but that’s why I own a Volkswagen.’ FahrvergnŸgen is the reason why the Volkswagen Group is the best-selling car manufacturer in Europe. And another well-kept secret. Volkswagen is also the best-selling import in Japan. If you’d like to experience FahrvergnŸgen for yourself, just visit your nearby Volkswagen dealer and take a test drive in any new Volkswagen. We’re confident that you’ll come out speaking a new language. “ [53]

Other ad campaigns featured German “scientists” with strong German accents “representing Deutschland” or saying phrases such as “German engineering in the house.” At the end of the most of the ads, a voiceover informs the viewer that German engineers made the car. Another recent ad campaign with Brooke Shields insinuates that women only get pregnant so they can buy a car engineered by Germans. In the ad Shields says, “There is an epidemic sweeping our nation, women everywhere are having babies just to get the new Volkswagen Routon. Take this couple, Christine here is so seduced by German engineering that she is having a baby just to get it, with a strange man she barely knows. Have a baby for love not for German engineering.”[54] At the end of the commercial, the Volkswagen Beetle says we should have seen this coming in a German accent. The ads point out that German engineers make the car as a selling point. One of Germans’ stereotypes that has become part of their national identity and is welcomed by the Germans is that they make good cars. This stereotype evolved partially because of Volkswagen’s immense success. Thanks to these advertising campaigns, Volkswagen is now synonymous with Germany overseas.

Volkswagen’s unique history paired with its success, not only in Germany but around the world, helped the company to become a symbol of Germany’s economic recovery, which led it to become a national icon for the German people. Volkswagen is distinctly German and because of this, the government of Germany has wanted to keep control over the company to make sure it remains German. In 1960, Volkswagen became a joint stock company with the government selling 60 percent of all of its shares. The Federal government divided the rest of the shares equally between the state of Lower Saxony and itself. In addition, the government kept veto power on Volkswagen’s board, this was known as the Volkswagen Law. This has created a lot of controversy in the past couple of years as the European Union (EU) has established that the Volkswagen Law breaks the laws of fair-trade and the EU.

In 2005, the European Commission took Germany to court over the Volkswagen Law. The European Court of Justice decided that the Volkswagen Law was illegal and ordered Germany to change it. A new case in 2007 was brought against Germany because it completely ignored the order and two years later nothing had been done to change the most controversial aspects of the law, namely the German government’s veto power. The European Commission brought Germany to court in 2007 under the official charges of “Failure of a Member State to fulfill obligations- Article 56EC- Legislative provisions concerning the public limited company Volkswagen.”[55] Germany was willing to get in trouble with the European Commission, which by default also means the European Union, to keep the company. At the end of the 2007 court case, the court declared Germany guilty of failing to fulfill its obligations as a member state of the European Union, and given a fine. Also, the Volkswagen Law was again declared illegal. [56]

As of November 2008, Germany had still not complied with EU regulations and had kept its veto power. Germany argues that it wanted to keep the company German and protect it from foreign investors. Germany’s official arguments in the court cases were that “under the agreement, the workers and trade unions, in return for relinquishing their claim to a right of ownership over the company, secured the assurance of protection against any large shareholder which might gain control of the company.”[57] Germany argued that by giving up its shares and veto power, it would be breaking an agreement that it had made with the workers. Germany also stated in court that Volkswagen had a unique history, which affected the decisions made and the court needed to respect these decisions because of the history. Even Angela Merkel, the German chancellor, who usually stays out of private industry matters, has said that Volkswagen should stay German.

The German government has given up 50 percent of its shares in the company, so it now only owns 20 percent, to appease the European Courts; but the EU still believes that this breaks EU law. The German government was willing to give up its shares in the company, which provides money, but has been unwilling to give up control of the veto power. This shows that the German government is not just hanging on to the company for financial benefits. In fact, the European Commission is trying to impose a 100,000 euro fine per day until Germany gives up the veto power.

On November 27, 2008, the European Commission warned Germany that it would sue the German government over the Volkswagen Law, and emphasized again that it needed to give up the veto power. The European Commission has given Germany two months to comply with the verdict from 2007, or it will take Germany to court again.[58] This sentiment of wanting to keep Volkswagen German is not restricted to the German government. On September 12, 2008, thousands of Volkswagen workers and Germans held a huge rally against the EU’s lawsuit.[59]

During the 1990s, foreign companies have taken over more than 5,000 German companies, so this was a big concern that the iconic German company might get sold to a foreign company. According to a recent New York Times article, in 2005, Franz MŸntefering, the former chairman of the Social Democratic Party, referred to foreign investors as "swarms of locusts" that drain companies of everything. [60]  But the issues with Volkswagen appear to be more than just keeping Volkswagen German: the German government wants to keep Volkswagen as a symbol of Germany. Although Merkel and others have said that the reason they do not want to relinquish power over Volkswagen is because they want to keep Volkswagen German, this is not the whole truth, as the company that is interested in buying out Volkswagen is another German car company, Porsche. [61]

Surprisingly, Germany is fighting to retain control over the company even though another German company is the one trying to buy it. Even though Porsche is also a German car company, it does not hold the same place in the hearts of the German people. This is due in part to the place that Volkswagen holds in Germany’s culture. Porsche represents opposite ideals that Volkswagen does. Even though both companies are German, Porsche represents elitism-it sells expensive cars that regular people cannot afford. If Porsche owned Volkswagen everything that Volkswagen stands for would change, Volkswagen would no longer be Germany’s people’s car, and Germany would still lose one of its symbols of national identity. There is also concern that Porsche could sell the company to a foreign investor once it is in control of the company. This highlights how important the Volkswagen Company is to Germany. Not only is Germany willing to blatantly disregard the demands of the European Union, an important political and economic body, but is also not willing to give the company over to another German company. The German government has been fighting to maintain control over this company for the last three years and it does not appear that the fight will stop any time soon. [62]

Volkswagen has become a symbol of German identity over the years because of its unique history. The company was able to rise out of the horrors of World War II to become one of the most successful car companies, in not just Germany, but in the world. It was able to accomplish this success by using hard work and discipline, which are traits Germans value. Germans started to see Volkswagen as more than just a company but as a symbol of German’s economic recovery, and it gave them hope that Germany could be great again. Because of this, Germany has gone out of its way to make sure that this iconic company stays German; even going as far as battling the European Union in court cases and ignoring court orders that have told the government to give the company up. Volkswagen helped Germany recover not only emotionally, by giving them a national icon, but also economically. Germany continues to fight for Volkswagen, as it is not willing to give up on the company that helped the country recover from World War II.

 

Contents

Introduction

 


Coddington

Garmon

Grozbean

Hilleary-Nasser

King

Keene

Viar

Judkins

Plarr
Ruble
Shaughnessy
Buxbaum
Herbert
Porter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



[1][1]Associated Press, ÒGermany Seeks to Protect State Control of Volkswagen,Ó New York Times, September 23, 2008. 

[2] Hans-Rudiger Etzold, The Beetle: Production History of the People's Car (Somerset: Haynes Publishing Company, 1990),  71

[3] Associated Press, "EC to sue Germany over Volkswagen Law," CNN, September 9, 2008.

[4] Rudi Dornbusch, Wilhelm Nolling, and Richard Layard, Postwar Economic Reconstruction and Lessons for the East Today. (Boston: The MIT Press, 1993),  ix

 

[5]Rudy Koshar, ÒBuilding PastsÓ in Commemorations: The Politics of National Identity. Ed. John Gillis. (Princeton: Princeton University Press, 1994), 216-231

[6] Ibid. 226

[7] Charles Maier, The Unmasterable Past: History, Holocaust, and German National Identity. (Boston: Harvard University Press, 2003), 125

[8] Ibid. 129

[9] James Dow, and Hannjost Lixfeld. ÒNational Socialistic Folklore and Overcoming the Past in the Federal Republic of Germany,Ó Asian Folklore Studies, Vol. 50, No. 1 (1991): 117-153.

[10] Dornbusch, Nolling, and Layard.  ix

[11] Ibid. xi

[12] Domink Geppert, The Postwar Challenge: Cultural, Social and Political Change in Western Europe, 1945-58. (Oxford: Oxford University Press, 2003), 1-24.

[13] Christian Deubner, ÒChange and Internationalization in Industry:Towards a Sectoral Interpretation of West German PoliticsÓ in The Internationalization of the German Political Economy: Evolution of a Hegemonic Project, ed. Timothy Shaw (London: St. MartinÕs Press, 1992), 90

[14] Reinhard Doleschal, ÒInternationalization and the Reorganization of Production and Marketing in the Volkswagen Corporation,Ó in The Internationalization of the German Political Economy: Evolution of a Hegemonic Project, ed. Timothy Shaw (London: St. MartinÕs Press, 1992), 75

[15] Etzold, 101.

[16] Siegfried, Klaus-Jorg, "Racial Discrimination at Work: Forced Labour in the Volkswagen Factory, 1939-45." Confronting the Nazi Past; New Debates on Modern German History. (New York: St. Martin's Press, 1996),  37

[17] Porsche, Ing. H.c. F. Ideas on the Construction of a German People's car. Stuttgart.  January 17, 1934.

[18] Etzold. The Beetle, 22.  While Porsche did produce the first prototypes, recent research has proved that the actual designer was Paul Ganz, a Jewish automotive engineer and journalist. Hounded by the Gestapo, the Hungarian-born Ganz fled to Switzerland, where he tried to build cars with Swiss government aid.  Ganz died in relative obscurity in Australia in 1967.   See  Paul Schilperoord, The Extraordinary Life Of Josef Ganz : The Jewish Engineer Behind Hitler's Volkswagen, 2nd ed., Translated from Dutch by Liz Waters, New York : RVP Publishers, 2012.

[19] Reich, Simon. The Fruits of Fascism: Postwar Prosperity in Historical Perspective. London: Cornell University Press. 1990, 123

[20] Etzold, 20

[21] Etzold The Beetle: Production History of the People's Car, 21

[22] Stephen Tolliday, "Enterprise and State in the West German Wirtscharftswunder: Volkswagen and the Automobile Industry, 1939-1962." The Business History Review, Vol. 69, No. 3 (Autumn, 1995), 282

[23] Etzold, 29

[24] Ibid, 136

[25] Reich,165

[26] Ibid, 168

[27] Ibid, 148

[28] ÒDiscussions with Industry on the Implementation of the Level of Industry Plan,Ó 7 Aug. 1946, AVIA 49/65. PRO; cf also BT 211/73, PRO

[29] ÒInvestigation of Developments in the German Automobile Industry during the War period.Ó Report of Society of Motor Manufacturers and Traders Commission (SMMT) to Germany led by Dr. H. E. Merritt (Senior Technical Executive of the Nuffield Organization), 24 July to 1 October 1945, BIOS Final Report No. 768, IWM.

[30] Sir William Rootes as quoted in Walter Henry NelsonÕs, Small Wonder; The Amazing Story of the Volkswagen (Boston: Little, Brown and Company, 1967), 98. This book was a biography of Walter Henry Nelson who was one of PorscheÕs close friends. He does not cite his sources in the book.

[31] Tolliday, 290-300

[32] ÒPlan for Motor Vehicle Production in the Combined Area,Ó Paper from the Industry Divison CCG for meeting of the Bipartite Economic Panel, 15-18 March 1947, PRO, FO 943-171 BIECO/P (47) 72; Backer, Priming, 80-2 in Tolliday, 296

[33] Michael L. Hoffmann, ÒVolkswagen puts British in Dilemma,Ó The New York Times, July 9, 1946. ProQuest Historical Newspapers. 7

[34] Reich, 177

[35] Tolliday, 310

[36] Etzold, 30

[37] Reich, 179

[38] Etzold, 30

[39] Melvin J. Lasky, ÒThe Volkswagen: A Success Story,Ó New York Times, October 2, 1955.   Full title is ÒÔWe Germans just love to work,Õ says the director of EuropeÕs largest auto company. Here is the remarkable record of the pace-setter of West GermanyÕs industrial comeback.Ó

[40] Lasky, ibid.

[41] ÒVolkswagen Output UpÓ New York Times Dec 31, 1952, 22

[42] ÒVolkswagen Bares Its Finances; Cash Reserves at $34,720,000Ó New York Times Dec 24, 1955, 20.

[43] Lasky, ibid.

[44] Heinz Nordhoff, quoted in EztoldÕs The Beetle: Production History of the People's Car, 42

[45] Lasky, ibid.

[46] Fritz Berg, ÒExport Trade Is Crucial To The German Economy,Ó New York Times, April 1, 1956, 269

[47] ÒWest German Output Up,Ó New York Times, March 31, 1956, 20

[48] Doleschal, 90

[49] Reich, 181

[50] Reich, 200

[51] Etzold, The Chronicle of the PeopleÕs Car, 50

[52] James Dow, and Hannjost Lixfeld

[53] Etzold. The Chronicle of the PeopleÕs Car, 189

[54] Volkswagen Routon, ÒBrooke ShieldsÓ advertisement, aired Autumn 2008.

[55] Judgment of the Court. Commission of the European Communities v. Federal Republic of Germany. October, 23, 2007.

[56] Judgment of the Court, 2007

[57] Judgment of the Court, 2007, ibid.

[58] David Gow, ÒEC warns Berlin it Faces Fines over VW veto,Ó The Guardian. June 6, 2008

[59] John Rega and Peter Chapman, ÒGermany Gets Final EU Warning to Alter Volkswagen Law,Ó Bloomberg News. November 27, 2008

[60]ÒAs Giant Rivals Stall, Porsche Engineers a Financial WindfallÓ The Wall Street Journal.  Nov. 8, 2008

[61] Mark Landler, ÒCourt Strikes Down ÔVolkswagen LawÕ,Ó New York Times, October 23, 2007.

[62] Stephanie Bodoni, Chad Thomas, ÒEU Court Overturns Volkswagen Laws, Enabling Takeover (Update 2),Ó Bloomberg News, October 23, 2007.