CONTENTS

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First published in Great Britain in 2017 by Bantam Press
an imprint of Transworld Publishers
Copyright © 2017 John Thomas Ewing Jr

Cover design by Pete Garceau
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BUILDING AN EMPIRE

VOLKSWAGEN’S PATH TO WORLD DOMINATION

THE PORSCHE AND PIËCH FAMILIES AND VOLKSWAGEN

(Members with the greatest influence on Volkswagen history)

CHAPTER 1

Road Trip

THEY WERE A curious sight, the graduate students from West Virginia University, barreling down California freeways in the spring of 2013. The back end of their car, a Volkswagen Jetta station wagon, sprouted a tangle of pipes and hoses held together with hardware store clamps and brackets. Flexible tubes sucked exhaust from the tailpipes and fed the gas into a mysterious gray box sitting on a slab of plywood in the car’s rear cargo area. The box had wires and cables coming out of it. Next to the box, bolted to the plywood, was a Honda portable generator, which stank and made an infernal racket. The students, Hemanth Kappanna from India and Marc Besch from Switzerland, tolerated the noise and the fumes. They had to. The generator was needed to power the whole mess.

People stared. They were questioned by a curious cop. The improvised equipment broke down often. The generator wasn’t made to be bumped around so much and needed to be replaced, slowly draining the modest $70,000 grant that West Virginia University had received to fund the research by Kappanna and Besch and another student, named Arvind Thiruvengadam. After one breakdown, Besch and Thiruvengadam spent much of a night in the parking lot of a big-box home improvement store, trying to get the rig to function right again. But the work the students were doing was important—much more important than they could possibly have imagined at the time. They were testing the Jetta’s emissions. In particular, they were testing for nitrogen oxides, a family of gases with a wide array of fearsome effects on human health and the environment. Nitrogen oxides cause children to get asthma and provoke attacks in people who already have asthma. They cause chronic bronchitis, cancer, and cardiovascular problems. Excess nitrogen oxides in urban areas have been known to produce spikes in the number of people coming to hospital emergency rooms with heart attacks. Members of the nitrogen oxide family contribute to acid rain and are far more potent, pound for pound, than carbon dioxide as a cause of global warming. Nitrogen oxides also react with sunlight to produce the smog that smothers urban areas, especially Los Angeles, where the students spent much of their time. With its automobile culture, abundant sunlight, and bowl-shaped topography, Los Angeles is an ideal caldron for smog. Thanks largely to nitrogen oxides, LA has the worst air of any city in the United States.

The reason the students were testing a Volkswagen Jetta was that it was one of the few vehicles available in the United States with a diesel motor. They also tested a diesel Volkswagen Passat and a diesel BMW SUV under the supervision of Dan Carder, head of West Virginia University’s Center for Alternative Fuels, Engines, and Emissions, or CAFEE, which is famous for its expertise in measuring and analyzing what comes out of a tailpipe. Diesels make more efficient use of fuel than gasoline-powered cars and produce less carbon dioxide. But they also produce far more nitrogen oxides. That’s because diesel ignites at higher temperatures than gasoline. The heat turns the inside of a diesel engine into a veritable nitrogen oxide factory, combining nitrogen and oxygen from the atmosphere to form malignant nitrogen oxide molecules.

Volkswagen claimed that the Jetta and Passat were “clean diesels.” They were equipped with technology that was supposed to scrub nitrogen oxides out of the exhaust. The German automaker had spent millions of dollars trying to convince Americans that diesels were an environmentally friendly alternative to Toyota’s hybrid technology. That’s not what the students from West Virginia University were seeing, though, as they drove around Los Angeles and San Francisco and even up to Seattle. One student was at the wheel while the other sat in the passenger seat with a laptop computer, monitoring the data. Even an expert might have been puzzled by the sight of them. Technology to measure emissions on the road had been around since the 1990s, but it was rarely used for passenger cars. Government regulators preferred to test cars in laboratories, where it was much easier to control all the variables, like barometric pressure or air temperature, that can influence emissions output. The work that the students were doing wasn’t exactly revolutionary, but it was unexpected.

The Jetta and Passat emissions were fine when the West Virginia crew tested them on rollers in a specially equipped garage borrowed from the California Air Resources Board, the state’s clean air enforcer. But when the students took the Jetta out on the road and hooked up their gear, the Jetta started producing nitrogen oxides in quantities that were off the charts. In fact, the Jetta was producing way more nitrogen oxides than a modern long-haul diesel truck. The Passat was better, but still far above the legal limits. The BMW performed fine, except during a few demanding uphill climbs, which was considered normal.

Kappanna couldn’t figure it out. He kept expecting the Volkswagen emissions to average out over time at a level somewhere close to the legal limit. That wasn’t happening. “Man,” Kappanna thought, “this is not controlling very well.” He and the others figured there was some kind of mysterious technical problem. Pollution control systems are complex rolling chemistry labs that endeavor to neutralize all the poisons that are a byproduct of modern mobility, not only nitrogen oxides but also other pollutants such as formaldehyde and soot particles. The engineers who design the systems and program the engine computers must manage dozens of variables. It’s easy for a clogged valve or a software bug to throw the system out of whack.

Kappanna and the others never suspected anything underhanded on Volkswagen’s part. Like almost everyone involved with the automobile industry, they had a lot of respect for German engineering. After all, it was a German, Carl Benz, who filed a patent in 1886 for what is considered the first practical automobile.¹ Ever since, German inventors such as Ferdinand Porsche had been at the forefront of automotive technology. BMW, Mercedes-Benz, and Volkswagen’s Audi unit dominated the high end of the auto market. Consumers were willing to pay more for cars simply because they were made in Germany. The whole German economy revolved largely around auto manufacturing. Arguably no one was better at it. The idea that “clean diesel” might be a big lie, and that the lie might be exposed by a handful of underfunded university researchers—they never imagined that in a million years.

CHAPTER 2

The Grandson

IT BEGAN AS a propaganda exercise. At least since the 1920s, there had been talk in German engineering and political circles about how to build a car that the masses could afford—a people’s car, or Volkswagen.¹ Part of the motivation was national pride. Even though Carl Benz had invented the automobile, to the chagrin of the Germans it was an American, Henry Ford, who made the new form of transportation affordable. In 1938, there was only one car for every fifty people in Germany.² In the United States, thanks in part to Ford, there was one car for every five people.

Hitler seized on the idea of a people’s car soon after coming to power in 1933 and turned it into a Nazi prestige project.³ The car, he decreed, would cost no more than 1,000 reichsmarks, a price chosen because it had a nice ring to it, not because of its achievability.⁴ But practicality was never really the point. The Volkswagen was supposed to embody the improvements in living standards the Nazis claimed were just around the corner. And there was an ulterior motive. The car helped justify the autobahns that Hitler was laying down across Germany, and camouflage their real, military purpose. The divided, limited-access highways were designed to allow Wehrmacht convoys to race quickly to German borders.

The Führer wanted a people’s car, but the established carmakers like Daimler-Benz or Adam Opel, which belonged to General Motors, did not.⁵ While paying lip service to Hitler’s pet project, they were alarmed at the idea of a new competitor subsidized by the state. The automakers’ trade association, which was supposed to oversee the project, could not openly oppose it. But it did what it could to undermine the man chosen to design the new car: an engineer and favorite of Hitler’s named Ferdinand Porsche. Porsche ran an independent design studio already suffering from financial problems. The association allocated him a meager budget of 200,000 marks to bring the project to completion. That included only 25,000 marks in advance.

But the chiefs of the German auto industry underestimated Porsche’s determination and his single-minded passion for engineering. A native of the Sudetenland, which had been part of Austria before World War I and became part of Czechoslovakia afterward, Porsche was already prominent in the fledgling auto industry.⁶ He had built a battery-powered car around the turn of the century and during World War I oversaw motorization of Austrian artillery at the Skoda automobile works in what is now the Czech Republic. (Many years later, after the fall of the Berlin Wall, Volkswagen would acquire Skoda.) Between the wars, working mostly as an independent contractor, Porsche designed and built a series of innovative race cars for companies including Daimler-Benz and Auto-Union, which would later become part of Audi. Though he had never earned a university degree and was largely self-taught, Porsche’s reputation as an engineer was such that Josef Stalin tried to lure him to the Soviet Union to oversee vehicle construction there.

Hitler invited Porsche to Berlin in March 1934 to discuss the project.⁷ They met at the Kaiserhof, the luxury hotel near the Reich Chancellery, where Hitler had lived shortly before taking power. The engineer made a good impression and was formally awarded the project three months later. Though the task was daunting, Porsche was not starting from scratch. He was able to draw heavily on design work his office had performed for previous clients but had never gotten past the prototype stage. The Porsche design bureau in Stuttgart had constructed a test vehicle known as the Porsche Type 32 for a German motorcycle manufacturer that had contemplated getting into the automobile business but ultimately decided against it. The Type 32 had a body design very similar to the one later found on the Volkswagen and some of the same technical features, such as an air-cooled engine mounted in the rear, which eliminated the need for a radiator and saved weight.⁸

Porsche was aware of efforts by established automakers to undercut him, and he made sure to cultivate his relationship with Hitler. On December 29, 1935, for example, Porsche drove a prototype from Stuttgart to Munich in the company of his son, Ferdinand, better known as Ferry, and Anton Piëch, his son-in-law, who was already a member of the Nazi Party. (Piëch is pronounced “pee-echhh,” with the “ch” taking a slightly guttural tone.) In Munich, the group met Hitler and gave him a progress report.⁹ Hitler was pleased. By keeping open a direct line to Hitler, Porsche protected himself from the other auto manufacturers who were still trying to make sure the Volkswagen never made it to production. The rivals insisted, for instance, that the car not be manufactured until it had completed 50,000 kilometers, or about 30,000 miles, of road testing.¹⁰ That was far more than any other new vehicle had to endure at the time. Porsche’s defenders later insisted that he had no love for the Nazis. But he was more than willing to exploit his connection to Hitler when it was necessary to realize his engineering ambitions.

The hostility of the established manufacturers eventually backfired on them.¹¹ Sensing their lack of enthusiasm, the Deutsche Arbeitsfront, the German Labor Front, took control of the Volkswagen project in 1937. The front was a Nazi-controlled organization that had forcibly absorbed the independent labor unions after Hitler came to power. It had also confiscated the unions’ wealth, some of which it now allocated to finance the construction of a factory to build the Volkswagen. The theft of worker property would have important consequences later on. After the war, in return for giving up claims for compensation, Volkswagen employees won a say in the management of the company that was extraordinary even by German standards.¹² Worker representatives on the Volkswagen supervisory board could, for example, veto plans to close a factory. The Nazis had unwittingly laid the groundwork for one of the grandest experiments ever in worker-management cooperation.

As design of the car progressed, thoughts turned to how to mass-produce it. Porsche was by then already in his sixties. Photos from the time show a dour, slightly heavyset man who combed his thinning hair backward and wore a thick mustache. He was capable of monumental temper tantrums when something didn’t perform as expected.¹³ Porsche had visited America in 1937 and toured the Ford plant, where he even recruited some Ford executives who had German roots.¹⁴ He began planning a factory that would be consciously modeled on Ford mass assembly methods. The site chosen for the new plant was near Fallersleben, a town adjacent to the rail line connecting Hanover and Berlin.¹⁵ Besides having a good railroad link, the site bordered the Mittelland Canal, a man-made waterway that allowed coal for the factory’s power plant to be delivered by river barge. In other respects, the factory was in an isolated location, relatively far from any of Germany’s major population centers. The location of the city that grew up on the other side of the canal arguably encouraged a provincial, insular view of the world that would prove damaging to Volkswagen decades later. Unlike BMW in Munich or Daimler in Stuttgart, Volkswagen was out in the sticks.

Hitler himself spoke at the ceremony on May 26, 1938, to mark the laying of the Volkswagenwerk foundation.¹⁶ The audience numbered seventy thousand. The car, Hitler announced, would be called the KdF Wagen, short for Kraft durch Freude Wagen—the Strength through Joy Car. Porsche’s design closely resembled the vehicle that would later win fame as the Beetle. Given the car’s appearance, the nickname was almost inevitable. Because the rear-mounted, air-cooled engine eliminated the need for a radiator grill, Porsche was able to give the KdF Wagen a rounded front end, set off by a similarly shaped roof and prominent fenders designed to minimize wind resistance. Along with the protruding round headlights, the car created the impression of something that was half machine, half bug. The design may not have been completely original, though. Later Porsche was accused of copying elements of a prototype designed for the Czech automaker Tatra by its chief of construction, Hans Ledwinka. The vehicle designed by Ledwinka did indeed have a body shape similar to Porsche’s car as well as an air-cooled, rear-mounted motor. Ledwinka protested, but a lawsuit against Porsche was settled by force when German troops invaded Czechoslovakia in March 1939.¹⁷ The price for the KdF Wagen was set at 990 marks, or the equivalent of $396 at the time. Eventually, insurance and a delivery charge added another 250 marks. Germans could pay 5 marks a week on an installment plan that, in theory, entitled them to a car after four and a half years. At the time, the cheapest automobiles on the market cost around 1,700 marks. The car would give average Germans access to modern mobility the same way that the $14 Volksradio, another Nazi project, had given them access to radio broadcasts.

But even at the time some outsiders saw that the KdF Wagen was more slogan than reality and rightly doubted whether Germany could deliver the vehicle in the promised numbers at the advertised price—which in any case was beyond the means of most Germans. Otto D. Tolischus, a New York Times correspondent famed for his reporting on prewar Germany, noted skeptically in 1938 that the price of the car kept rising and that the road to mass mobility in Germany was “long and steep.”¹⁸ It was Tolischus who first described the car as a “beetle,” and the nickname stuck.¹⁹

Hitler’s ambition for Volkswagen was grandiose, bordering on delusional. The factory would produce 1.5 million vehicles a year when it reached full capacity in 1946, the Führer promised. That would be more than Ford. The factory would not only be the biggest auto plant in the world; it would be the biggest factory of any kind.²⁰ Volkswagen’s fixation on bigness for its own sake would survive the war.

By the time Hitler visited the plant again, on June 7, 1939, it had taken on dimensions that fulfilled at least part of his ambition. The complex ran for more than a kilometer along the banks of the Mittelland Canal. The brick façade that faced the waterway was broken by high, narrow rectangular windows, and by brick enclosures that protruded forward at even intervals and housed staircases. The effect was of figures standing at attention. The Werkshallen, the factory buildings, had high roofs supported by steel or concrete columns. Rows of angled skylights let in natural light.

But that September, before mass production of the Volkswagen could start, Germany invaded Poland, and the Volkswagenwerk was ordered to concentrate on military production. Output of the KdF Wagen proved to be laughably small in relation to the Nazis’ grandiose promises. By the end of the war, the factory had produced just 640 vehicles for civilian use, and all of these went to members of the elite. The 336,000 Germans who had obediently made payments of 5 marks a week toward a car never got their money’s worth.²¹

Instead of making Volkswagens, the plant served as a repair facility for Junkers Ju 88 aircraft, a twin-engine dive-bomber that wreaked havoc over Portsmouth and the Isle of Wight during the Battle of Britain.²² The factory also produced an eclectic collection of military goods, including field ovens, land mines, parts for the V-1 rocket, and Panzerfäuste, the handheld antitank weapons best known for their role in the last-ditch attempt by the Nazis to stop the Allied onslaught.²³ The weapons were handed out by the thousands to civilians, including women, children, and the elderly, in the final months of the war.

The Volkswagenwerk also made vehicles, of course, about 66,000 by the end of the war, still a mere fraction of what had been planned. The most important was the so-called Kübelwagen, also designed by Ferdinand Porsche and based on components developed for the KdF Wagen. It was an early example of the adaptability and versatility of Porsche’s design for the Volkswagen. The Kübelwagen was in effect a militarized Beetle, the Wehrmacht’s equivalent of a Jeep. (In the 1970s, Volkswagen briefly sold a vehicle in the United States called the Thing, which had removable doors and a fold-down windshield and bore a distinct resemblance to the Kübelwagen.) There was even an amphibious version, the Type 166 Schwimmwagen.²⁴

Separately, Ferdinand and his son, Ferry, designed an early version of the Tiger Tank that was to be produced by the Krupp armaments concern. The tank was a famous failure.²⁵ Hitler wanted the Porsches to design a behemoth that would outclass Russian armor the way that Porsche-designed race cars had triumphed on prewar tracks. Germany would have been better off with the panzer equivalent of a Volkswagen. The over-engineered Porsche Tiger was too finicky for the muddy battlefields of the eastern front. Germany struggled throughout the war to build tanks as effective, robust, and simple to maintain as the ones fielded by the Red Army. “It was madness,” the historian William Manchester wrote of the tanks designed by Ferdinand and Ferry Porsche. “They belonged in a toy shop, not a weapons forge.”

It’s quite possible that Ferdinand and Ferry Porsche unintentionally did more for the Allied war effort than they did for the German cause. They squandered precious raw materials on weapons projects that proved impractical on the battlefield. As subsequent decades would show, the Porsche family had a weakness for elegantly engineered mechanical marvels that were too costly or temperamental for the real world. One Porsche-designed tank did prove useful, however. Years later, a surviving example of a Leopard tank designed by the Porsches was used at the Porsche sports car factory in Stuttgart to flatten rejected prototypes of new models, lest they fall into the hands of the competition.²⁶

In the summer of 1942, some members of Ferdinand Porsche’s family visited the City of the KdF Wagen.²⁷ Among them was a grandson, Ferdinand Piëch. He was the son of Louise Porsche, Ferdinand Porsche’s daughter, and Anton Piëch, who had become a top manager at the Volkswagenwerk. It quickly became evident that young Ferdinand, only five that summer, had inherited not only his grandfather’s first name but also his fascination with machines. The grandson had already enjoyed loitering in the Porsche engineering bureau, which had been relocated to Austria, where employees of Ferdinand Porsche Sr. worked on technical projects among rows of drafting tables. Ferdinand Piëch later recalled causing a stir among the adults when he bragged that Germany would soon have rockets that could shoot straight up in the air.²⁸ The lad had overheard top secret discussions about the V-2, the ballistic missile the Germans later fired at Britain.

At the City of the KdF Wagen, young Ferdinand was allowed to spend the days riding the locomotive that shuttled fuel and raw materials between factory buildings. Left in the care of the locomotive drivers, he helped shovel coal and could see the Junkers bombers lined up for repairs. It was a strange playground for a child not yet old enough to attend school. The Wehrmacht was gearing up for the attack on Stalingrad, which early the next year would end disastrously for Germany and mark a turning point in the war. Long-range British and American bombers had begun attacking German cities. The KdF Wagen factory was not bombed until 1944, but it was a natural target.²⁹ Moreover, the factory made extensive use of slave labor, including Russian prisoners of war, women from occupied countries such as Poland, and Jews from concentration camps, including Auschwitz.³⁰ By 1944, two-thirds of the labor at the Volkswagenwerk, some twenty thousand people, was forced.

The Porsches, who lived most of the time in the Alpine idyll of Zell am See, were not an ordinary family.³¹ The children began learning the rudiments of how to drive at age five, when they were allowed to operate the stick shift of the family KdF Wagen from the front passenger seat. (The Porsches naturally had one of the few produced.) Shifting in those days was tricky even for adults, to say nothing of a child. The KdF Wagen did not have a synchronized transmission, which meant that shifting involved pressing down the clutch, moving the stick to neutral, letting out the clutch, and then applying the accelerator. The idea was to get the drive shaft and transmission gear spinning at the same rate, so that they could mesh smoothly. Then the driver pressed in the clutch and pushed the stick back into gear. In the Piëch household, the children were expected to time the shifting of the gearstick while the adult operated the clutch and gas pedal. If the child chose the wrong moment to put the car into gear, the transmission would make an agonizing grinding sound. In that case, the child would not be allowed to do any more shifting for a while.

Piëch, a handsome lad with piercing eyes, was probably too young to perceive that many Volkswagen workers were underfed prisoners and de facto slaves. In any event, decades later Piëch recorded only his fascination with the factory and what went on there. During a long walk that summer with his mother, she asked him what he wanted to be when he grew up. “I said,” Ferdinand Piëch wrote later, “I would like to someday work in this factory, but not like my father and grandfather at a big desk with paper, but for real, down there, where the workers repaired the airplanes and rode the train, for real, with my hands.”³² A seed had already been planted, a longing that would draw Ferdinand Piëch back decades later and have a profound effect on Volkswagen’s history.

Piëch later excused his grandfather’s role in the Nazi war machine by saying that Ferdinand Porsche was fearfully naïve about politics, as if that somehow also included being blind to the suffering of forced laborers or being unaware of the regime’s brutality.³³ In any case, Porsche had shown that he was clever enough about politics to know how to use his relationship with Hitler when it suited him. It would have been impossible for an adult to ignore the conditions under which the workers toiled. Even the best-treated among them, like the Polish women, were poorly fed and clothed and were denied medicines if they became sick.³⁴ The worst-treated were the concentration camp inmates, mostly Jews, imported at the request of company managers facing a severe labor shortage and anxious to keep the plant operating at capacity. The inmates were beaten by SS guards, barely fed, and made to work in winter weather in flimsy concentration camp clothing. Deaths were commonplace. True, conditions were better than at Auschwitz, from where many of the Jewish laborers had come, but they were still deplorable.

Perhaps the cruelest aspect of the wartime Volkswagenwerk was the treatment of newborn children. Sara Frenkel, a Jewish woman from Poland who assumed a false identity and worked as a nurse at the Volkswagen factory, described how children born to laborers were taken away soon after birth and kept at a “children’s home” in the village of Rühen, northeast of the factory. “The toddlers lay in filth, and it stank of urine and feces. The food was bad and there was not enough water,” Frenkel recalled later. “The babies were so beautiful, but eventually they all died in Rühen.”³⁵ Historians put the number of children who died in the home from illness and neglect at 365. Hans Körbel, the SS doctor who oversaw the children’s facility, was later convicted of war crimes by a British military tribunal and executed in 1947.

Hans Mommsen, author of an exhaustive study of Volkswagen during World War II, concluded that Porsche had “sleepwalked” through the crimes committed at the factory.³⁶ He was so focused on technical and production goals that he willfully ignored the human cost.

Volkswagen was hardly alone among German corporations in exploiting forced laborers. Many of the companies that are among Germany’s largest today, including Daimler, BMW, and Siemens, were guilty of similar practices. But Volkswagen used an unusually large number of slave laborers and was a pioneer in exploiting them.³⁷ Lacking an established workforce when the war broke out, Volkswagen sought to make up the shortfall with foreigners, most of whom were there under duress. At the peak, 80 percent of the laborers on the factory floor during the war were foreigners, compared with an average among German industries of 30 percent. Later the company would pay reparations to surviving slave laborers, while insisting that the blame lay with the Nazi regime and not the company. Porsche and Piëch family members also complained about the portrayal of Ferdinand Porsche by Mommsen, accusing the historian of trying to tar them with their grandfather’s deeds.³⁸

The first major Allied attack on the Volkswagenwerk came on April 8, 1944.³⁹ Bombers of the U.S. Eighth Air Force dropped 146 tons of explosive and incendiary bombs, which killed thirteen people, including four forced laborers.⁴⁰ Areas used for offices suffered most of the damage. Two more raids followed in June, shortly after D-day, as part of Operation Crossbow, a joint British and American attempt to knock out sites that produced the V-1 rockets that Germany was using to terrorize Britain. Some of the forced laborers were shot to death by German guards for “plundering”—presumably trying to take advantage of the chaos to steal food. A fourth major raid, by eighty-five American B-24 bombers, took place on August 5. This time most of the factory buildings suffered damage.

But though the bombs put holes in the brick walls of the factory and caused roofs to cave in, the effect on production was only temporary. Much of the machinery and production had already been moved to safety beginning in 1943, either to the basement of the factory itself or to other locations.⁴¹ For example, an iron mine in Tiercelet, in northeastern France, was converted into a factory to produce air-to-ground bombs that had previously been made at the Volkswagenwerk. The Volkswagenwerk continued to turn out the Jeep-like Kübelwagen until days before the American Army reached the outskirts of the town on April 10, 1945.⁴²

On that day, Jean Baudet, a laborer from France, noted in his diary that the road passing by the Volkswagenwerk was clogged with ragged, unarmed columns of German soldiers, many of them wounded. He could hear artillery and bursts of machine-gun fire in the distance. American fighter planes zoomed by at treetop level. But the fighting never reached the factory itself. The factory’s force of armed guards melted away, and no one resisted when the first American tanks rolled onto the grounds. On April 12, Baudet looked out the window of the factory and saw a tank with a white star on it. “The Americans!” someone cried.⁴³ Even the German civilians seemed relieved, Baudet wrote.

Ferdinand Porsche was long gone by then.⁴⁴ In January, resigned and demoralized, he had retired to the family estate in Zell am See. His son-in-law, Anton Piëch, followed a few days before the Americans arrived, choosing not to fulfill his duties as commander of the local Volkssturm, the poorly trained citizens militia, armed with Panzerfäuste, that was supposed to mount a last-ditch defense of the fatherland.

Even after the Americans arrived, Pïech and Porsche continued to try to manage the factory from Austria. They saw themselves as custodians of Volkswagen, if not the outright owners. Piëch took a substantial amount of cash—about 10 million reichsmarks ($1 million)—from company coffers when he fled to Zell am See ahead of the Allied advance.⁴⁵ In the months after Germany’s surrender, Piëch sent bills to the British administrators of the plant for development work that Ferdinand and Ferry Porsche had done, and ostensibly continued to do, on the Volkswagen sedan and other projects, including an electric vehicle. Piëch and the Porsches even dismantled a barracks in Wolfsburg and transported the lumber to Zell am See, where the building was reassembled.⁴⁶ When Volkswagen’s postwar administrators tried to get Porsche to pay for the materials, Porsche refused, saying the lumber had been moved as part of a wartime plan to relocate Volks-wagen headquarters. Porsche said it had cost the firm more money to re-erect the building than the materials were worth. These somewhat bizarre attempts to retain administrative control over Volkswagen came to an end when Ferdinand Porsche, Ferry Porsche, and Anton Piëch were arrested. The British did not pay the bills they submitted. But the behavior of the Porsche family members demonstrated their determination to retain a claim on the company that, at least in their view, Ferdinand Porsche had built.

The factory resumed operations even before the German surrender a month later, serving as a vehicle repair facility for the U.S. Army. Within a few weeks, it was also drawing on existing stores of parts to manufacture Kübelwagen again, this time for Allied use. By June, when British troops took over the factory because it lay in their zone of occupation, 133 vehicles had been produced.

The British quickly recognized that the Volkswagenwerk could help them solve two problems: the need to provide Germans in the area with a livelihood, and the British Army’s own need for transport. The British prevented the machinery from being shipped away to one of the victorious countries as reparations, the fate that befell Opel, whose machinery was trucked to the Soviet Union.⁴⁷ The red brick factory buildings were hastily repaired. Materials damaged by bombing were reused if they were still structurally sound. To this day, shrapnel scars are visible on some steel beams inside the plant.

The British renamed the young city Wolfsburg after a nearby castle, to remove associations with the past. In December 1945, production resumed, this time with the Volkswagen car as the main product. By March 1946, one thousand had been produced and were deployed by occupation forces. As tensions with the Soviet Union increased, the British began to see the Volkswagenwerk as a way to provide well-paying jobs, to counteract the allure of communism, and to promote a democratic Germany. The Soviet zone, and the future border of East Germany, was less than ten miles to the east of the factory. British administrators, some with experience in the automobile industry, helped ensure supplies of precious raw materials and provided credit. “The responsible officers quickly realized that they could build not only autos at the factory but also democracy,” the historian Markus Lupa has written.⁴⁸ Very quickly the factory established a service and dealer network and by August 1947 had begun exporting vehicles to other countries in Europe. Volkswagen’s international expansion had begun.

Like other German industrialists, Ferdinand Porsche was interned after the war.⁴⁹ In August 1945, he was held for two months at a camp in Bad Nauheim, north of Frankfurt, known as Dustbin. Porsche’s fellow prisoners included Albert Speer, the architect who was Hitler’s chief of wartime production, and Wernher von Braun, who oversaw Hitler’s rocket program and later played a crucial role in the U.S. space program. After being questioned by Allied interrogators about the Volkswagenwerk, Porsche was released on September 13, 1945, and returned to Austria.⁵⁰ But his freedom was short-lived. Two months later Ferdinand Porsche, Ferry Porsche, and Anton Piëch were invited by the French government to Baden-Baden, a spa town in southwest Germany, to discuss the possibility that they would take over management of a French automobile factory. After being treated to a dinner in their honor, the three were unexpectedly arrested for their role in deporting French workers to the Volkswagenwerk during the war. Ferry was released in March 1946, but Ferdinand and Piëch were taken to Paris, where they were housed in the servants’ quarters of a villa belonging to Louis Renault and put to work designing a new Renault passenger car. The French, fraught with internal divisions of their own, could not decide whether to exploit Porsche’s knowledge or charge him with war crimes. In February 1947, as French officials pushing for prosecution gained the upper hand, Porsche and Piëch were put in a police jail south of Paris and later imprisoned in Dijon. However, Porsche benefited from testimony by Peugeot managers who said he had hindered deportation of the company’s workers to Germany and protected the French carmaker from Nazi meddling.⁵¹ In August 1947, after twenty months of incarceration, Porsche and Piëch were freed. They were never tried for war crimes.

Ferdinand Porsche’s influence over Volkswagen faded after the war, but he had already made two decisive contributions to its future development. He had designed the car that would be the basis of its postwar success. And he had passed on some of his passion for engineering and a sense of mission to a grandson, Ferdinand Piëch.

CHAPTER 3

Renaissance

IN THE FIRST few years after American tanks clattered onto the factory grounds, Volkswagen’s survival as a company was by no means a given. VW faced severe shortages of nearly everything needed to produce an automobile. Steel and other raw materials were rationed. The wartime dependence on forced laborers, who looted and vandalized the factory after liberation, then scattered, meant the company had an inadequate base of experienced workers. For the German workers who were available, there were not enough places to live. Many slept in the barracks once used by forced laborers. Food was so scarce that undernourished workers sometimes collapsed at the assembly line. Waves of German-speaking refugees, who had fled or been expelled from Soviet-controlled Eastern Europe, swarmed to Wolfsburg in search of work. But often they did not stay long, preferring to move to places where conditions were better.

Despite such travails, the Volkswagenwerk had a number of competitive advantages. Its factory had suffered less damage than those of competitors like Opel and Daimler. The factory had its own coal-fired power plant and was spared the frequent outages that handicapped manufacturers elsewhere in Europe. Because Volkswagen’s inventory of machinery had largely escaped bombing and confiscation, the company could produce parts it could not buy from suppliers. The Volkswagen Presswerk, the giant stamping machines used to form sheet metal into body parts and other components, was one of the largest in Europe.

Volkswagen was also fortunate that its British occupiers assigned a resourceful and energetic major named Ivan Hirst to oversee the factory.¹ Hirst came from a family that had owned a British watchmaking company, Hirst Bros & Co., but had been forced to sell it in 1927 after sales collapsed, in part because of low-cost competition from Germany. Hirst had spent time as an exchange student in Berlin before the Nazis seized power. He admired the German work ethic and spoke a little German. For much of the war, he was attached to the Twenty-Second Advanced Base Workshop, a unit of the British Army’s Royal Electrical and Mechanical Engineers Corps that operated just behind the front lines repairing damaged tanks and other motor vehicles. There Hirst acquired both crisis management skills and technical knowledge that would prove useful to Volkswagen.

A bookish-looking man who wore a dark, bushy mustache and round spectacles with black frames, Hirst arrived in Wolfsburg in August 1945. He effectively became Volkswagen’s first postwar chief executive. The energy he brought to the task derived partly from Britain’s interest in reviving Volkswagen and other German companies in order to reduce the cost of occupation. But Hirst, just twenty-nine at the time, also seems to have genuinely identified with the factory and its workers. Thanks to his talent for scrounging parts and raw materials, the company was able to produce its 10,000th postwar Volkswagen by October 1946, far more civilian vehicles than the Nazis ever managed. At Hirst’s initiative, Volkswagen established a service and sales organization and made its first exports outside Germany—five cars delivered to a dealer in the Netherlands in October 1947.² He pushed to improve the quality of the vehicles and to teach workers to take initiative rather than passively wait for orders, as they had been conditioned to do under the Nazis.³ Hirst also created a twelve-person workers council in line with the broader Allied goal of encouraging democratic institutions in occupied Germany.⁴ These were crucial steps in Volkswagen’s evolution from a Nazi prestige project to an international, customer-oriented automaker. The decision to give workers a voice would set a precedent as well and have long-term consequences.

HIRST ALSO RECRUITED Volkswagen’s first postwar German chief executive, Heinrich Nordhoff, who had managed one of Opel’s main factories during the war. The urbane Nordhoff, who wore doublebreasted suits with a white handkerchief poking from the breast pocket, had a deep understanding of how factories worked and was a capable manager. He led Volkswagen for two decades and oversaw a period of extraordinary growth. One of Wolfsburg’s main thoroughfares is named after him. But Nordhoff later showed scant gratitude toward Hirst, without whom Volkswagen might not have survived as a corporate entity. Nordhoff insisted later that Volkswagen was nothing but a ruin when he arrived in November 1947 and had to be rebuilt from scratch.⁵ Perhaps that is how it looked to him. But Nordhoff, who took office on January 1, 1948, was lucky to arrive just as the West German economy was poised to take off. The introduction of the deutsche mark later that year, replacing the devalued reichsmark, gave Germans a currency they could trust, freed entrepreneurial spirits in the Western occupation zones, and dramatically improved the economic situation. Soon after the currency reform, production of Volkswagens more than doubled, to 2,500 a month.⁶

Hirst left Volkswagen in 1948 but remained in Germany in other posts with the British government. In 1955, when Britain declared the occupation of Germany over and reduced its forces, Hirst found himself without a job. He returned to Wolfsburg, hoping there might be something for him to do. Nordhoff brushed him off.⁷ Only decades later did historians recognize Hirst’s role in guiding Volkswagen through the perilous period immediately after German surrender. In the years before his death in 2000, Hirst became a frequent guest of honor at Volkswagen events in Wolfsburg.⁸

By October 1949, when the British turned over administration of Volkswagen to the German government, Volkswagen had ten thousand employees. The four thousand cars a month they built represented half of the country’s total vehicle production. Volkswagen was the main German supplier of vehicles to the British occupation forces and had a quasi-monopoly supplying the German postal service and the Deutsche Reichsbahn, the company that operated the German railroads. In 1949, 15 percent of the vehicles produced in Wolfsburg were sold abroad.

In many ways, Volkswagen and the German economic recovery that began after currency reform, the Wirtschaftswunder, were synonymous. As Germany tried to reclaim its place among the civilized nations of the world, the Volkswagen served as a mechanical ambassador of goodwill. Rather than conquering foreign lands by force, the Volkswagen charmed its way abroad. It was practical, reliable, and accessible to the burgeoning middle classes of Europe. Hitler’s role in the creation of the car became a mere footnote, if it was remembered at all. Instead, Volkswagen emerged as a symbol of the new, democratic Germany. As German companies tried to rebuild the tarnished “made in Germany” brand, Volkswagen was in the vanguard. The factory’s location just a short drive from the border with East Germany, and the “iron curtain” dividing Europe, only enhanced Volkswagen’s symbolic value in the Cold War competition between free-market capitalism and Soviet communism.

In fact, the distinction between economic systems was not quite as great as it seemed. Volkswagen remained a state-owned company until 1960. Nor was Nordhoff a particularly committed democrat. During one meeting of top management in 1951, Nordhoff proposed that Volkswagen back candidates for local government to “make sure there are people in the city council who are willing to cooperate and won’t create annoyance and difficulty.”⁹ At another meeting, he suggested that the company insist that all newspapers and magazines that wrote about Volkswagen or its cars submit their articles in advance for examination and approval “so that unfriendly articles will no longer be published.”¹⁰

The KdF Wagen, now known as the Volkswagen, went on to be produced in numbers that far surpassed Ford’s Model T and exceeded even the wildest expectations of its prewar planners. Conceived by a totalitarian government bent on military conquest, the people’s car lived up to its name only when there was peace, when Germany was a democracy and Western ally, and the company had access to markets worldwide. Ferdinand Porsche died in 1951, at the age of seventy-five, long enough to see the Volkswagen become commonplace on German roads.

THE CONNECTION BETWEEN