Thinking Small: The Long, Strange Trip of the Volkswagen Beetle

by Andrea Hiott

  Needless to say, Nordhoff’s first few months after the currency exchange were extremely tough. In terms of exports, for instance, the external demand was there, but it became impossible to keep up with that demand because of exchange rates and because bilateral national trade agreements had not yet experienced the same loosening as the German economy had: The factory was doing well and had orders in other countries to fill, but with the currency exchange rate at the time, it was calculated that VW would lose about 1,596 DM for every exported car! Such a loss seemed to point to the immediate termination of such export agreements, but in a very brave (and unreasonable, or so many thought) move, Nordhoff remained true to Volkswagen’s word; he decided to take the loss and hold his breath.

  Nordhoff’s newfound confidence in the plant had a lot to do with his shift in attitude toward the strange small car sitting at the center of it all. Nordhoff was beginning to appreciate what he had; indeed, he was captivated by the machine now. In a speech to his workers, he would later gush over his own baby blue Volkswagen Beetle, saying: “I have to tell you, it’s really fantastic. It doesn’t go (lauft); it flies (fliegt) …”2 Perhaps in the past, he might have thought of driving a Mercedes, he goes on to say, but such things no longer crossed his mind: “This car is so sweet and wonderful,” he said: How could he ever drive anything else? Even the reserved, practical Nordhoff hinted that he thought of the car as being alive, calling it “an amazing automobile with a special personality.” Nordhoff had clearly come a long way from his early days at Opel, when he’d criticized Porsche’s design. In fact, he would later admit that his most important decision at Volkswagen was really a simple one: the decision to stick with the original design of Porsche.

  If the most crucial moments in our lives are often a surprise, then realizing that he had fallen for the Volkswagen was Nordhoff’s surprise crucial moment. And the little car had found a good caretaker as well. It was Porsche’s brainchild, adopted and then abandoned by the Nazis, liberated by the Americans, given new life and nurtured by the British, especially by Ivan Hirst. Now it had finally landed in the careful hands of Heinrich.

  For its time, the Volkswagen was a highly unique car. After all those years of constant testing, the car’s combination of a swing axle, central-tube framing, torsion bars, and opposed air-cooled engine at the rear were indeed a fortuitous combination, as was its beetle-like, streamlined shape and (especially) its affordable price. After the war, it seemed to suddenly dawn on Europe that it was time to make and own just such a car—one that was inexpensive but still reliable and able to perform in the way a luxury car could. That meant the VW was actually ahead of its time. Nordhoff understood this, and came to think of the car as a gift. That was the main reason he stuck to his export agreements: The future looked exciting, and possibly rewarding, if only he was patient enough to wait it out.

  July 1948 ushered a late San Francisco–style summer into Germany, and the warm air was like a balm. People opened their windows wide, letting the light flood in and the gentle breezes blow through. For the past seven years, shops and storefronts around Germany had gradually emptied to the point where even the most basic of objects, like toothbrushes and soap, were nowhere to be seen. But in the summer of 1948, with the currency reform and the end of price controls, suddenly all those basic objects—and many other objects besides—reappeared. One store after another began restocking shelves, brand-new goods displayed in their newly cleaned windows, opening their doors to welcome customers again. A sense of abundance spread quickly like dominoes falling across the land. Saucepans, papers, ink, coffee mugs, shoes, picture frames, silverware, jam, grains, brushes, furniture, clothing, books, medicine—all of these much-longed-for goods were suddenly available again. Life quickened. The change felt mystical. There was a kind of holiday mood across the country. Even the cows and chickens seemed to be happier: in the week after the currency reform, there was a jump in the supply of both butter and eggs!

  In some areas of Germany, the change seemed to happen literally in one day. The new deutschmark, alongside a number of other reforms, went into effect on June 20, 1948. On June 21, many felt like they were living in a new world. One German American economist working for the American military government at the time claimed Erhard’s move had “transformed the German scene from one day to the next1 … goods reappeared in the stores, money resumed its normal function, the black and grey markets reverted to a minor role.… The sprit of the country changed overnight. The grey, hungry and dead-looking figures wandering about the streets in their everlasting search for food came to life.…”

  Still, it would be inaccurate to paint Germany as a country full of only smiling faces and shiny eyes that summer of 1948. The sudden change sparked a backlash of ill feeling in some areas, as people were shocked at the abundance that suddenly appeared. Clearly, many of the goods had existed before the currency reform, but people had been hiding or hoarding them, feigning a lack of stock or overcharging for what they did sell. Some even lashed out at the store owners or farmers who suddenly had an abundance of wares for sale. One woman in Frankfurt, for example, brought a fresh basket of eggs to the market only to have the crowd turn on her. “Where were those eggs last week?”2 they asked. The woman went home wearing her eggs on her clothes; the people pelted her with them.

  The currency reform also drew a bright red line through Germany. The Soviet Zone responded to Erhard’s changes by withdrawing from the Allied Control Authority. What to that point had been figurative was in a sense made official: There were now two Germanys. But the currency reform was not a reason for that division; it was simply one of many visual representations of it.

  One thing certainly became clear in that summer of 1948 in West Germany: Erhard’s bet on human behavior had proven right. When price controls and ration cards were taken out of the picture, the mentality of hoarding and fear all but vanished. Erhard’s critics had been wrong: Removing controls did not make people more greedy and animal-like, but rather relaxed economic tension and allowed for an economic mutuality to begin. People wanted to buy and sell. It wasn’t that conditions had changed overnight, but the way those conditions were perceived certainly had. Seeing things in shop windows and on shelves gave people a sense that everything was finally okay again, that there was no need to panic and hide what they had. The mentality had changed, and so the reality changed as well. The economy grew at an astonishing rate. It was referred to as the Wirtschaftswunder, the Economic Miracle. And Ludwig Erhard would go down in history as its father and guiding star.

  It wasn’t only the currency reform and new economics that were effecting change in Europe—it was also the new spirit that was arriving at just that same time, ushered in by programs like the Marshall Plan. While it’s true that Germany would see only $1.4 billion of the tens of billions of dollars that would stream out of the United States and into Europe over the next four years (meaning that, even at its peak, Marshall Plan aid was less than 5 percent of Germany’s national income), the money wasn’t the important thing—it was what that money stood for, and it was why it was being given. It was the step of trust, the chance to start again, all things much harder to equate with numbers. Vernon Walters, the U.S. ambassador in the State Department in 1947, later said that the genius of the Marshall Plan “was to instill psychologically the idea that there would be a future, which also created a greater European economic and, eventually, political unity,”3 going on to say that “the dramatic change in the last half of 1948 and the first half of 1949 in Europe was unbelievable. People had confidence. They began to build because they thought there would be a future and that future would be free.”

  The feeling of renewal eventually spread to Wolfsburg too. While the city didn’t have shop windows to fill, it did have a factory, and alongside Nordhoff’s new philosophies and plans, the currency reform and the ending of ration cards eventually turned in the Volkswagen’s favor. Absenteeism plummeted at the plant. Before the reform, in May 1948, it had
been estimated that each worker missed at least 9.5 hours of work every week: This was because many still had to go out and hunt for food or barter on the black market for their basic needs and supplies. In October 1948, the number of missed hours was down to 4.2 per week and would only descend more rapidly from there. In May 1948, VW made 1,135 cars. In June, that number was up to 1,520 cars. In July, 1,806. And by the end of the year, they were making over 2,300 cars per month. The increase in productivity was helped by the fact that the workers were eating better than they had in years. Food was no longer the focus of each day. In the records in 1947, one sees as much as 15 percent of the staff bringing in doctors’ notes from sickness, many citing malnutrition. In December 1948, only 3 percent of the staff brought in such a note. People were growing healthier, and work was beginning to mean something to them again; indeed, some were even starting to feel a sense of pride and enjoyment about it.

  The Marshall Plan did not provide aid for the Volkswagen plant directly. Nordhoff got by entirely on his own during the first hard months after the reform, sometimes asking his car dealers for loans in order to have something to pay his men. But as it took effect, the Marshall Plan helped VW inadvertently because it assisted the suppliers of the parts, which meant they got more quality parts, and they got them on time now. The plant also benefited greatly from the new attitude the Marshall Plan helped to instill: In Europe and America, it was becoming possible to think of Germany in a way other than “the enemy” again. But the biggest direct help for the Volkswagen factory came from Erhard’s removal of price controls, because a lack of price controls eventually made trade with other countries much easier, indeed favorable. Between June and December of 1948, industrial production in Germany increased by 50 percent. But no other car company had the type of growth that the Volkswagen plant had. No other car company was in a position to make so many cars with a moving assembly line, nor did any other company have a People’s Car.

  By autumn of 1948, a rapid rise in car sales and car production at VW had solved early tax and liquidity problems. It was now possible to produce cars at a gain, and because Nordhoff had stuck to his export agreements even when the situation looked dire, there were plenty of potential customers, and it was now possible to produce cars for them. Among the reforms that occurred through Erhard’s new “social market economy,” there had also been a specific tax incentive, a remission of any profits earned on export sales. Volkswagen was the only car company in a position to export cars to any substantial extent. Just as Erhard’s risk paid off, so had Nordhoff’s. By October 1948, the loans that VW had taken in the summer to keep it afloat could be paid back in full.

  It’s not surprising that the export side of Volkswagen would eventually become so strong. From the very beginning, there were ways in which Volkswagen was a European company as much it was a German one: It originated from, and depended upon, many different people from many different places, and without each player, the company would not have succeeded.

  Take Ben Pon, for example, the man responsible for helping to start exports in the first place by bringing the Volkswagen to the Netherlands, and a man who was also one of the People’s Car’s biggest and earliest fans; Pon was of great service to both the British and Nordhoff. In fact, it was Pon who first proposed to Nordhoff that he build a transport vehicle, an idea that Nordhoff followed through on, introducing the Volkswagen Type 2 (the Bulli), known in the States as the VW Bus, in November 1949.4

  Ben Pon had driven his first Volkswagen in 1938, before the factory had even been built. As a young man, he’d read about the German government’s plans to build the car and the factory, and he and his father (a man who owned a car dealership in Holland) had journeyed all the way to The Town of the Strength through Joy Car to have a look. At the time, Wolfsburg was essentially an empty field surrounded by small villages, but Pon and his father did find Professor Porsche there. In fact, it was Ben who had given Porsche the vibrant yellow tulip bulbs that Porsche would later plant around his cabin on the hill. Pon met with Porsche and Nazi officials in Berlin months later, persistent in his desire to be involved with the car, and had eventually been promised that he’d have dealership access to the car for his Dutch franchise—he’d be allowed to sell the Volkswagen there. Then, according to Pon, Ferdinand Porsche—clad in “brocaded felt slippers”5—took him for a ride in a Beetle on the empty Berlin autobahn.

  Even during the war, the Volkswagen was still on Pon’s mind. And once Germany had been defeated and the Volkswagen had come under the control of the British, he contacted them too with the same hopes of bringing the car to the Netherlands. (He even brought fish from Holland to give as a gift for the workers, knowing they were in need of food.) He and VW made plans at the Hannover Trade Show on August 8,1947, to begin export to the Netherlands. It was Pon’s interest and the agreement that was reached between his dealership and the British that led to an export committee being set up at the factory, one that was aided and accentuated by Feuereissen’s plan later known as “the Volkswagen way” of “service before sales.”

  Pon also played a role in the development and improvement of the car in those years, pointing out many defects and areas where the car could be improved that the British had not seen. On the first export models, the Volkswagen archives attribute to him having found “nonfunctioning blinkers,6 a defective hood lock, a handle for the heater that was not attached, sluggish gear shifting, dented hubcaps, a bumper that was poorly chrome-plated, a stain on the backrest, and handlebars that were imprecisely installed”—all things that were immediately fixed by the Volkswagen factory workers.

  Pon was the first major export dealer for VW, a side of the business that basically had started from scratch. These early export contracts were a matter of individual cars. Ben Pon had five Volkswagens delivered to him at the beginning of October 1947 (there was supposed to be a sixth, but it didn’t make it through inspection); those five little cars that were shipped to Pon made a sensation in the press. They were praised as “the rebirth of the German automobile export business.” But really, little came from that first export, at least for a while. By the end of 1947, only 56 cars in total had been exported to the Netherlands and no new export agreements had been made. The British had hoped to make a profit on exports, but so far the only dollars trickling in were through sales to the Allies and the foreign press. Still, while on the surface the numbers and the profits were extremely small, the potential of the export possibilities had been released—it had become a tangible idea in German minds again. Thus, when Nordhoff arrived at the beginning of the following year, he was able to use his own experience, skills, and will to develop that side of the business.

  Before the partnership between Pon and the British, it had seemed impossible that anyone would ever want to buy a German car again; the Nazi shadow was still too dark. But the gates had been opened, and Nordhoff kept them open through 1948, all the while improving the car to a level of quality that had also been thought impossible just a few years before.

  As far as Heinrich was concerned, the problem was not one of demand—in Nordhoff’s first months at VW, he received requests for Bugs from Switzerland, Denmark, Belgium, Sweden, and Norway—it was one of logistics. From the very beginning he had made it clear to the British that he wanted to have control of the plant when it came to the big decisions, and in his mind, exports fit the category of big decisions. A large part of the problem, Heinrich thought, was all the red tape he had to go through with the Bizone organizations before any agreements about exports could be finalized. Finally, he asked Colonel Radclyffe to back his request to make such decisions completely factory-based. “I would like to request with all possible urgency7 to be entitled to handle export business,” Nordhoff told the British board once Radclyffe agreed. And he eventually got his way, thus paving the way for the jump in sales that was soon to follow.

  By December 1949, there were 529 factory workers and 68 office workers in Wolfsburg. A Volkswagen now cost 5,300
DM. It could be had about one week after being ordered, and the Volkswagen factory was considered the leader in the field of sales and service in West Germany. By the end of 1949, Nordhoff was able to show that the VW plant was out of debt. In fact, Volkswagen was beginning to help boost the West German economy: It was now the leading German exporter of automobiles. Export figures rose to 7,128 vehicles in 1949, a huge increase from the fewer than two hundred total that had left the country in 1947. (Though, while VW was miles ahead of other German car companies—Opel exported a total of 12 cars that year—it was still far behind others in Europe. The British, for example, exported 180,000 cars in 1949.) Internal sales in West Germany were even more extraordinary: 37,500 Volkswagens were sold in 1949 and there were now 59 German VW wholesalers, 213 repair shops under contract with VW, and 164 subsidiaries. The German population was, finally, on its way to being motorized.

  The Beetle was coming to life, like a black-and-white photo suddenly washed with color. It now had the eyes and hands of an entire factory caring for it. And the car did not have a single extraneous inch. The engineers at the Volkswagen plant found that even the tiniest change in the sheet metal would affect every other part of the car. As sales increased, Nordhoff began to focus more acutely on the details of the car. He wanted to keep improving the mechanics, but without changing the design itself: He wanted it done organically, he said, as though on a cellular level, step by step. Nordhoff assembled a specialized team to comb through every detail of the car, led by a man he’d known from his days at Opel whom he named as VW’s chief engineer.