Volkswagen

Volkswagen   (Auto industry)
Formation	1937
Member of	Centre for European Policy Studies/Corporate Members, German Institute for International and Security Affairs, WEF/Strategic Partners
Membership	•  Herbert Diess •  Oliver Blume •  Markus Duesmann •  Gunnar Kilian •  Hiltrud Dorothea Werner •  Frank Witter
German multinational corporation and industrial powerhouse, which after it's 2015 emissions scandal, is about to be cut down.

Volkswagen is a German automaker founded in 1937 by the German Labour Front, known for the iconic Beetle and headquartered in Wolfsburg. It is the flagship brand of the Volkswagen Group, the largest automaker by worldwide sales in 2016 and 2017. The company has operations in approximately 150 countries and operates 100 production facilities across 27 countries. The group's biggest market is in China, which delivers 40% of its sales and profits.

History

Early History

In the 1920s and 1930s, there were several attempts to develop a German version of Ford's Model T, a cheap car for the common people. In 1934, soon after the Nazi party seized power, Adolf Hitler became involved, ordering the production of a basic vehicle capable of transporting two adults and three children at 100 km/h (62 mph). He wanted all German citizens to have access to cars. At that time, there was only one motor-car for every fifty persons (compared to one for every five in America).

It soon became apparent that private industry could not turn out a car for only 990 RM (US$396 in 1938 dollars). Thus, Hitler chose to sponsor an all-new, state-owned factory using Ferdinand Porsche's design.

A huge advertising campaign was launched to persuade workers to put aside part of their wages to save up for one, with the slogan "a car for everyone". This idea caught the public's imagination, and over 330,000 workers applied to buy a Volkswagen car. In contrast to universal hire-purchase practice, the scheme provided for delivery only after payment of the last installment.

In 1938 a factory was built at Fallersleben (Wolfsburg) to produce it, but very few cars were delivered to the purchasers before the Second World War halted civilian production. Not a single car was produced for those 330,000 workers who had paid in their money to the German Labour Front.

Second World War

During the war the Volkswagen factory produced the Kübelwagen and the amphibious Schwimmwagen. It also produced parts for VI Flying Bombs. Some of the labour force came from the Arbeitsdorf Camp. The company later admitted that it used 15,000 slaves during the war effort. German historians has estimated that 70% of Volkswagen's wartime workforce were supplied by slave labor, mostly Eastern Europeans Some of the Volkswagen executives were sentenced to death at the Nuremberg Tribunals because of the working conditions.

Restructuring

In the summer of 1945 the British Army took over control of the Volkswagen factory. The original intention was to dismantle the entire production line and ship out the machinery and tooling as reparations. Colonel Charles Radclyffe, who was in charge of car manufacture in the British zone, was responsible for carrying out this plan. However, when the Volkswagen equipment was offered to Britain's motor manufacturers, they turned it down, as quite unattractive to the average buyer... To build the car commercially would be a completely uneconomic enterprise."

In late 1946 to mid-1947, US and British dismantling policy changed as part of the new Cold War.

In 1947 Colonel Radclyffe decided that a suitable German must be found to take over the company. It was suggested by Major Hirst that he should recruit Heinrich Nordhoff, who had worked as a production manager at Opel, during the Second World War. Nordhoff was appointed as managing director in January 1949. Over the next 20 years Nordhoff turned Volkswagen into one of the world's leading car manufacturers.

Icon of the Economic Miracle

Heinrich Nordhoff and the Wolfsburg factory staff

In 1949, Major Hirst left the company—now re-formed as a trust controlled by the West German government and government of the State of Lower Saxony. The "Beetle" sedan or "peoples' car" Volkswagen is the Type 1. Apart from the introduction of the Volkswagen Type 2 commercial vehicle (van, pick-up, and camper), and a sports car, Nordhoff pursued the one-model policy until shortly before his death in 1968.

In 1955, as production increases dramatically, sales of the Beetle reach one million. In 1964, Volkswagen buys Auto Union, owners of the historic Audi brand. Volkswagen becomes the symbol of the new German economic might.

In 1960, the German federal government sells it stake in the company, but Lower Saxony kept its 20% share. Later, the company is indirectly majority owned by the Austrian Porsche and Piëch families.

Abetting in Torture

The Volkswagen Group worked closely with the CIA-backed military dictatorship in Brazil, which held power in from 1964 to 1985, and collaborated in the persecution, torture and murder of autoworkers.

The firm’s own plant security service at its facility in Sao Paulo operated like an intelligence service, spying on VW employees, preparing lists of political opponents which ended up in the hands of the authorities, arresting militant workers and transferring them to the political police and enabling the arrest of workers by the military police on the grounds of the plant, thereby handing them over to be tortured. The company’s chief executive was informed of the arrests as early as 1979.

A Brazilian investigation stated that "first, the company actively participated in the arrest of VW employees. Second, it harassed and dismissed oppositionist workers. Third, it aided and abetted the government in torture. Fourth, VW officials financially supported the Operação Bandeirante (OBAN) torture centre and the DOI-CODI (Departamento de Operações de Informações-Centro de Operações de Defesa Interna). Fifth, VW is guilty of conspiracy and participation in the military coup of 1964 and the two decades of military rule that followed."

The investigation concluded that “VW had an active role. It was not forced. The company took part because it wanted it that way.”

Emissions scandal

The manipulation of the emissions of it's vehicles via the controller unit did cost the company 31.3 billion euros by early 2020. A comment relayed by Cryptome in 2015 hinted at the fact that this was very likely an open secret in the industry and at that, with the number of people knowing that the specs didn't mirror the claims, was bound to become public at some point.

VW claimed to have some magical diesel technology that obviated the need for urea-based additives. It's possible that its competitors' response was, like, "Wow, that's cool -- good on you!" But it seems more likely that some time over the last decade they would have been pretty curious about what went on under the hood, as they say -- for example, by scrutinizing relevant patents and by disassembling and reverse engineering actual cars. And, of course, there's a certain amount of professional circulation as engineers and managers move from jobs with one manufacturer to another -- or are poached. It's conceivable that VW's competitors were all just totally stumped, didn't notice any disparities in VW's numbers, and didn't make any further efforts to figure out what was going on. I think it's much more likely that VW's shenanigans were, if not an open secret, at least strongly suspected by quite a few people in different aspects and contexts of the business. I don't think it's hard to see how other companies would decide *not* to follow VW's example *or* to rock the boat, given that doing so would likely involve tighter scrutiny.

Within VW, there's no doubt that many people knew -- not suspected, *knew*. The vast majority of VW employees wouldn't have known, really. But lots of people knew some of the basic facts: (a) that VW claimed to possess a magical technology, which (b) no competitor could figure out, and (c) didn't involve any discernibly different systems of parts. This had been going on for a decade, and it touched every aspect of the design, manufacture, and service of VW's diesel cars. There are *certainly* software developers who knew exactly what was going, as did their managers and their counterparts dealing with hardware integration. And they talk. But there are also chemists and physicists who knew the math simply didn't add up. There are designers and prototypers and engineers who deal with the physical properties and behaviors of their materials and knew that the specs didn't mirror the claims. There are analysts and actuaries who knew the numbers were bullshit. And so on, on an 'iterative' basis driven by intensely competitive seasonal sales cycles. It wasn't just a rogue few who knew -- it was a much messier, large-scale process of many people who sort of knew, saw it as normal, sought approval and promotions in that context, and so on.

 

Related Document

Title	Type	Publication date	Author(s)	Description
File:Vw-ramdoubler.pdf	Wikispooks Page	5 September 2015

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