HisToriCal No tes | 8 Changing Lanes under British Command The Transformation of Volkswagen from a Factory into a Commercial Enterprise, 1945 – 1949 HISTORICAL NOTES A series of publications from Volkswagen Aktiengesellschaft, Corporate History Department Changing Lanes under British Command The Transformation of Volkswagen from a Factory into a Commercial Enterprise, 1945 – 1949 Markus Lupa The Author Markus Lupa, a historian and publicist born in 1961, lives in Dortmund. His latest publications include Lieferant, Netzbetreiber, Dienstleister. Zur Gegenwartsgeschichte und Zukunftsperspektive der Stadt- werke Coesfeld GmbH (2007); Vom „Vorwerk“ zum FahrWerk. Eine Standortgeschichte des Volkswagen Werks Braunschweig (2008). Imprint Editors Manfred Grieger, Ulrike Gutzmann, Dirk Schlinkert Translation Patricia C. Sutcliffe Formatting and Design design agenten, Hanover Printing Hahn-Druckerei, Hanover ISSN 1615-1593 ISBN 978-3-935112-44-4 ©Volkswagen Aktiengesellschaft Wolfsburg 2011 contents 1. Introduction 4 2. The Luck of the Vanquished 10 2.1 From Arms Manufacturer to Administered Enterprise 11 2.2 The Improvised Fresh Start 24 3. The Transformation into a Commercial Enterprise 34 3.1 Factory Reconstruction and Reorganization 36 3.2 The Fluctuating Workforce 48 3.3 The Beginnings of Co-Determination 60 3.4 Erratic Production 74 4. Courses Set by the British 88 4.1 Paths to the Customers 89 4.2 Struggling to Achieve Quality 99 4.3 Exporting to Europe 108 5. The Last Step Before Taking the Pole Position 120 5.1 The New General Manager 121 5.2 Market Competition and Product Policy 128 5.3 Putting the Company in German Hands 141 6. Outlook 148 1. Introduction 4 introduction Like no other company in the 1950s, the Volkswagen plant reflect- under the aegis of the “Pax Americana.” Only once West Germany ed the economic rise of West Germany and its transition to a con- was integrated into the world economy and export paths were sumer society. The Beetle, reproduced a million times over, quickly opened, did it become possible for automobile firms to orient their exceeded all expectations and advanced the belated motorization of investments to the logic of increasing economies of scale in indus- German society. As the most important export, it brought foreign trial mass production.3 At the same time, the exporting successes currency to the domestic economy and an international reputation of the automobile industry significantly ameliorated and finally to the new Bonn republic. Moreover, as it became ever more com- overcame problems of integrating into the world market caused by mon on the road network – which state infrastructure improve- bilateral trade agreements and the dollar gap.4 ments were expanding at the same time – the Volkswagen Beetle came to symbolize the advent of a new era shaped by material pros- Many contemporaries consider the development of Germany in the perity and consumption, even though most private households 1950s to be an economic miracle which began with the “shop win- were unable to afford one before the end of the 1950s.1 Alongside dow effect” of currency reform.5 Three main factors account for the cigar-smoking German chancellor of 1963-66, Ludwig Erhard, the success of Volkswagen during this time: the concept of building who, in contrast to the strict patriarch Konrad Adenauer, embod- factories for mass production combined with modern capital stock; ied the hedonistic side of the republic, the Volkswagen became an the economic and currency reforms of 1948; and the introduction icon in the economic founding mystique of the Federal Republic of of Fordism, which is associated with Heinrich Nordhoff.6 The Germany.2 founding mystique turns around this individual: supposedly, Volkswagen’s rise to becoming an internationally successful auto- This mystique is based upon a solid economic core: without chal- mobile company began when Nordhoff was appointed General lenge, Volkswagen assumed a role of leadership in the German Manager in January 1948. This impression was fostered by Nord- automobile industry. This industry, in turn, rose to become a key hoff’s skillful self-promotion, and a clever publicity campaign de- industrial sector in the years of the economic miracle and fostered signed by Volkswagen’s chief press officer Frank Novotny.7 Even the growth and modernization in many economic areas because its most recent Nordhoff biography remains trapped in this “master orders and deliveries were integrated into the larger economy. narrative”, in ascribing the foundation of the present company to Fundamental to the industry’s function as the driving force of the the effect of the General Manager. Consequently, it undervalues economy was the adaptation of Ford’s production concept. A deci- the achievements of the British Military Government, which admin- 8 sive precondition was also the reconstruction of the world market istered the Volkswagen factory from 1945 to 1949 as its custodian. 5 introduction Volkswagen owes more to the British than the “King of Wolfsburg” more profitable,12 while their efforts to find workers for the plant wanted to admit. In any case, it took unusual optimism on the supported personnel development, which was characterized by a part of British control officers to stick to the idea of keeping the high rate of turnover.13 Volkswagen factory in operation and to pursue the development of automobile production for the civilian population. Thus, that the The role the British played in the technological and organizational Volkswagen plant, which was in danger of being dismantled, sur- reconstruction of the Volkswagen plant, which was accompanied by vived the postwar planning of the Allied occupation powers, is due a realignment of the production process and of the firm’s organiza- not only to British policies toward Germany, which aimed to revive tional structure, has only received sporadic attention up to now. the economy, and to the necessary export of Volkswagens for ac- The firm’s now hallmark quality policies, as well as the Sales and quiring currency, but also to the personal engagement of the Brit- Customer Service Department it established at that time, have ish officers.9 In comparison, the Adam Opel Corporation lost the been similarly sidelined. Since the company’s largely intact pro- factory in Brandenburg, which was dismantled by the Soviets, as duction resources were the only assets it had at the end of the well as the conveyor line and the production equipment for the war,14 the question simply has to be asked: what were the driving Opel Kadett in the factory in Rüsselsheim, which the Soviet Military forces behind the company’s development in the four-year period Government acquired as a reparation payment.10 after the war from a Nazi armament factory into an automobile company capable of competing on the international market – one Up to now, historical research has credited the British with con- that had a head start in its domestic market and was also represent- verting the plant to civilian production. It has also shown that the ed in several European markets with a highly respected, quality plant’s position as an administered enterprise gave it a privileged product? The studies presented in this volume hardly provide an- position concerning supplies. The production order and the pref- swers to this question. Instead, they seek to understand the devel- erential delivery of raw materials in tight supply put the firm in a opment in terms of a process of reconstruction that was prede- position to begin production of personal vehicles earlier than its termined by modern technological advances and tremendous competitors, who, for the most part, only built a few trucks for production capacity, and which – set into motion by the Allied need transport and delivery for the respective Military Governments un- for transportation and supported by their preferential delivery of til 1947/48. Thus, the British custodians gave the Volkswagen plant supplies – then succeeded on its own, more or less. If the compa- a head start.11 Moreover, the export business that they stimulated ny’s development is understood in this way, then the Americaniza- helped the firm utilize its capacities more efficiently, making it tion of production in the 1950s did not so much build on the foun- 6 introduction dation of British preparations but rather on an ambitious founding buyers via the bureaucratic apparatus of the German Labor Front principle and modern means of production, which rendered the (Deutsche Arbeitsfront, DAF). Consequently, the DAF, in appointing company predestined to take on a leadership role among West Ger- main and subsidiary factories, did concern itself with customer man automobile plants.15 service but did not attach any great value to developing a sales orga- nization.19 But can the essence of the growth dynamic of the Volkswagen com- pany in the 1950s really be attributed to the idea that it harvested The advent of the war, and the factory’s conversion to arms pro- the “fruits of fascism” and was able to utilize them for technologi- duction immediately after construction was completed, prevented cal reform?16 Did the sharp rise in the public company not disguise serial production from starting. But by tying the company to the the fact that its starting position was anything but promising for the war economy, these changes also kept it from having to orient its mass production of the Volkswagen Beetle?17 The continuity per- organizational and cost structures toward profitable production. spective fails to take an elementary structural deficit into account Instead, the Volkswagen factory developed into an arms factory that was already planted in the Nazi planning of the factory: with with various emphases, including the manufacture of jeeps and delusions of grandeur typical of the regime, the Nazis had used the amphibious vehicles. In sum, the starting conditions for the com- Ford factory “River Rouge” in Detroit as their blueprint, building pany, shaped by the Nazi founding principle and the war, were in the Volkswagen plant as a Ford-like factory but not as a commercial no way favorable to the serial production of the Volkswagen Beetle, enterprise.