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Enterprise and State in the West German Wirtschaftswunder: Volkswagen and the Automobile Industry, 1939–1962
Published online by Cambridge University Press: 13 December 2011
Abstract
Analysts of the post-war German “economic miracle” (Wirtschaftswunder) have diverged sharply over its origins and dynamic. The well-known Olson thesis stresses the importance of a radical break in institutions and interests, while other historians have recently posited the centrality of continuities from the fascist era to the Bonn republic. This article examines the history of Volkswagen, the largest firm in the crucial automobile industry, to understand the balance between continuity and change and systemic and conjunctural factors in the impressive success of this firm. Tolliday rejects the Olsonian notion of institutional “cleansing” and argues that the legacies of both fascism and the British Occupation were vital but that during the 1950s overlapping institutional structures, argumentative interest groups and rival political coalitions at VW could well have choked off growth in the absence of quite favorable circumstances.
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References
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128 Ibid; Howard to Nordhoff, 26 July 1948, AR 65–71, box 30, FMC.
129 It was described as “a box on an organisation chart without any linear attachments,” Ford and Howard, “Report on European Trip.”
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133 “Property of the German Labour Front,” 26 Sept. 1945, FO 371/46828, PRO.
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163 On the rise and fall of the DRP see Turner, “British Occupation Policy,” 680–723.
164 Koch, Arbeitnehmer steuern mit, 35.
165 Koch, Arbeitnehmer steuern mit, 40–5.
166 Bork had worked at VW before the war, but he had also been imprisoned under the Nazis. He only joined the Works Council in 1950—a significant advantage because he was not involved in the “Peter Affair” which tended to discredit all parties involved. Koch, Arbeitnehmer steuern mit, 83–4.
167 Schenzinger, K. A., Simon, H. and Zischka, A., Heinrich Nordhoff (Munich, 1969), 167Google Scholar.
168 Koch, Arbeitnehmer steuern mit, 63.
169 For the wider context of the development of German trade unions and collective bargaining, see Thelen.
170 Heinrich Nordhoff, “Report to Advisory Board” 22 May 1951, B115/3378, BA.
171 Heinrich Nordhoff, “Report to Advisory Board” 22 May 1951, B115/3378, BA.
172 H. Oeftering, “Memorandum on Volkswagen labour contract”, 5 Sept. 1952, B115/3416, BA.
173 Nordhoff to Oeftering, 6 March 1953, B115/3416, BA.
174 Minutes of Cabinet Meeting, 2 3 June 1953, B115/3379, BA; Frankfurter Allgemeine, 7 July 1953.
175 Ministry of Finance, “Memorandum on recent speech by Dr. Nordhoff”, 6 July 1953, B115/3416, BA.
176 L. Erhard to H. Oeftering, 6 Feb. 1956, B115/3422, BA.
177 “Note of Telephone Dictation of Minister of Finance Schaffer”, 1 Feb. 1956, B115/3422, BA.
178 F. Schaffer (Finance Minister) to BDA, 8 Feb. 1956, B115/3422, BA.
179 Letter from Ruhr Coal Mining Employers' Association to F. Schaffer, 6 March 1957, B115/3423, BA; L. Erhard to H. Oeftering, 6 Feb. 1956, B115/3422, BA.
180 L. Erhard to F. Schaffer, 12 March 1956, B115/3422, BA.
181 Minutes of Cabinet Meeting, 13 June 1956, B115/3422, BA.
182 Bimbaum to Schaffer, 12 June 1956, B115/3422, BA.
183 “Memorandum on Meeting with Dr. Nordhoff Concerning the Regulation of Working Time”, 9 May 1956, B115/3422, BA; H. Nordhoff to H. C. Paulssen (President of Bundesvereinigung Deutscher Arbeitgeberverbände [BdA]), 31 March 1957, B115/3423, BA.
184 Telegram from Schaffer to Nordhoff, 6 March 1957, B115/3423, BA.
185 L. Erhard to F. Schaffer, 4 April 1957; Letter from the State Secretary to the Chancellor to F. Schaffer, 18 April 1957, B115/3423, BA.
186 Letter from Ruhr Coal Mining Employers' Association to F. Schaffer, 30 March 1957, B115/3422, BA.
187 Neue Ruhr Zeitung, 29 June 1957.
188 L. Erhard to F. Lindrath, 12 Nov. 1959, B115/3428, BA.
189 L. Erhard to F. Lindrath (Minister of Federal Economic Property), 8 March 1958; Letter from Ministry of Finance to Ruhr Coal Association, 14 Nov. 1957, B115/3424, BA.
190 F. Lindrath to H. Nordhoff, 18 March 1959 and 29 April 1960, B115/3427, BA.
191 L. Erhard to F. Lindrath, 12 Nov. 1959, B115/3428, BA.
192 H. Oeftering to F. Blucher (Deputy Chancellor), 27 Nov. 1954, B115/3419, BA; Minutes of the Supervisory Board, 27 Aug 1954.
193 Minutes of a meeting between the Board of Volkswagen, the Ministers of Lower Saxony and the Deputy Chancellor, 17 Jan. 1955, B115/3419, BA; L. Erhard to F. Schaffer, 5 Nov. 1954, BA, B115/3421.
194 W. Sohngen (Director of Rhine Steelworks) to H. Oeftering, 19 Nov. 1954, B115/3419, BA.
195 Minutes of a meeting between the Deputy Chancellor, Dr. Nordhoff and Dr. Ahrens (Lower Saxony Finance Minister), 17 Jan. 1955, B115/3419, BA; Minutes of the Supervisory Board (VW) 5 Nov. 1954, B115/3419, BA.
196 Telegram from F. Blücher (Deputy Chancellor) to H. Oeftering, 23 Nov. 1954; Oeftering to Blücher, 24 Nov. 1954, B115/3419, BA.
197 Minutes of the Supervisory Board (VW), 24 Nov. 1954.
198 Telegram from F. Blücher (Deputy Chancellor) to H. Oeftering, 23 Nov. 1954; Oeftering to Blücher, 24 Nov. 1954, B115/3419, BA.
199 H. Oeftering to F. Blücher, 27 Nov. 1954 and 17 Jan. 1955, B115/3419, BA; Dr. Rust to L. Erhard, 14 Jan. 1955, B102/76037, BA.
200 Minutes of Supervisory Board (VW), 24 Jan. 1955.
201 F. Lindrath to L. Erhard, 10 Sept. 1959, B115/3428, BA.
202 L. Erhard to F. Lindrath, 12 Nov. 1959, B115/3428, BA.
203 “Notes on a Telephone Conversation Between the Chancellor and the President of the BDA”, 26 June 1959, B115/3428, BA.
204 Olley, “Motor Car Industry in Germany,” BIOS Overall Report No. 21, IWM.
205 Blaich, Fritz, “The Development of the Distribution Sector in the German Car Industry,” in Okochi, A. and Shimokawa, K., eds., The Development of Mass Marketing (Tokyo, 1981)Google Scholar.
206 For a historical analysis of “Fordism” see Steven Tolliday and Jonathan Zeitlin, “Between Fordism and Flexibility,” in Tolliday, Steven and Zeitlin, Jonathan, eds., The Automobile Industry and Its Workers: Between Fordism and Flexibility (Cambridge, 1987)Google Scholar.
207 Nelson, Small Wonder, 272; Wood, VW Beetle, 54.
208 Etzold, H. R., The Beetle: The Chronicles of the People's Car (Newbury Park, Calif., 1988), 6Google Scholar.
209 Nelson, Small Wonder, 272.
210 All lovingly and tirelessly catalogued in Etzold, The Beetle.
211 Minutes of the Working Committee of the Advisory Board, 8 June 1951, B115/3379, BA; Busch, K. W., Strukturwandlungen der westdeutschen automobilindustrie (Berlin, 1966)Google Scholar, Tables.
212 Memorandum by Birnbaum for Supervisory Board, 15 July 1955, B115/3379, BA.
213 Busch, Strukturwandlungen, 65–6, 93; Krengel, R., Anlagevennögen, Produktion und Beschäftigung der Industrie im Gebiet der Bundesrepublik Deutschland von 1924 zu 1958 (Berlin, 1958)Google Scholar.
214 Busch, Strukturwandlungen, 123; Werner Abelshauser, “Two Kinds of Fordism: On the Differing Roles of the Automobile Industry in the Development of the Two German States,” Paper presented to the Fuji Conference on Business History, Jan. 1994.
215 E. Vitger to A. J. Wieland, 12 Oct. 1950, AR 75–62–616, box 2, FMC.
216 A. J. Wieland, “A Program for a New Passenger Car to be Produced at Ford Werke AG, Cologne,” 24 Feb. 1951, AR 65–71, box 30, FMC.
217 Ford Werke, “Cologne Integration Program,” May 1953, AR 67–13, box 2, FMC.
218 A. J. Wieland, “Notes on Germany,” May 1953, AR 67–13, box 1, FMC.
219 Minutes of Supervisory Board (VW), 8 Dec. 1955.
220 Minutes of Supervisory Board (VW), 27 March 1956.
221 Minutes of Supervisory Board (VW), 8 June 1956.
222 Brenner protested that “[t]he form of the car is no longer discussed.… There are cars, and there are Volkswagens.… and that's it.” Minutes of Supervisory Board (VW), 3 June 1957; Minutes of Supervisory Board (VW), 4 Sept. 1956.
223 Minutes of Supervisory Board (VW), 4 Sept. 1956.
224 USBSS, Report No. 88: FO 371/65114, “Provisional report of reparations and disarmament working party, January 1946.”
225 Minutes of Supervisory Board, 3 June 1957, VW.
226 Minutes of Supervisory Board, 25 Nov. 1957 and 16 June 1958, VW.
227 Minutes of Supervisory Board, 6 June 1958, VW.
228 Minutes of Supervisory Board, 25 Nov. 1957 and 6 June 1958, VW.
229 Minutes of Supervisory Board, 22 Jan. 1960 and 17 Nov. 1960, VW.
230 Minutes and papers of the Working Committee of the Supervisory Board, May 1961, VW.
231 Minutes of Supervisory Board, 3 June 1957; 25 Nov. 1957; 6 June 1958; 13 June 1960. All in VW.
232 Minutes of Supervisory Board, 22 Jan. 1960, VW.
233 Minutes of Supervisory Board, 10 Nov. 1959, VW.
234 Minutes of Supervisory Board, 4 May 1961, March and April 1961 passim, VW.
235 Minutes of Supervisory Board, 10 Nov. 1959, VW.
236 Minutes of Supervisory Board, 10 Nov. 1959, VW; Etzold, The Beetle, 176.
237 Minutes of Supervisory Board, 13 June 1960, VW.
238 Nicholls, A. J., Freedom with Responsibility: The Social Market Economy in Germany, 1918–1963 (Oxford, 1994), 359Google Scholar.
239 On BMW see Monnich, Horst, The BMW Story: A Company in its Time (London, 1991), 427–479Google Scholar; on the wider context of CDU dirigisme see Kuntz, Aline, “Conservatives in Crisis: The Bavarian Christian Social Union and the Ideology of Antimodernism” (Ph.D. diss., Cornell Univ., 1987), 198–201Google Scholar.
240 Bimbaum, “Memorandum for the Ministry of Finance on the Future of Volkswagen,” 13 Oct. 1956, B115/3391, BA.
241 Enterprise Letter of the German Industrial Institute, 8 Oct. 1953; Economic Information Service No. 191, B115/3417, BA.
242 L. Westrick to L. Erhard, 19 March 1955, B102/76034, BA.
243 The Economist, 5 Oct. 1957; F. Novotny, “VW, Aktiengesellschaft und Stiftung,” 4 Oct. 1957, B115/3395, BA.
244 F. Lindrath to Bimbaum, 13 Aug. 1957, B115/3395, BA.
245 F. Lindrath, “Memorandum on a Meeting of ‘CDU Friends’ to Discuss VW,” 19 Aug. 1958, B115/3391, BA; A. Hartmann to Bimbaum, 2 Sept. 1957, B115/3395, BA.
246 Ministry for Economic Property, “Memorandum on Lower Saxony and the Ownership of VW,” 17 March 1958, B115/3394, BA.
24 For an account of the controversy see statement by Minister Ahrens to the Land Niedersachsen Parliament, 2 Dec. 1959, Parliamentary Minutes, 311–322, B115/3391, BA; Reich, Fruits of Fascism, 192.
248 F. Lindrath, “Memorandum on Meeting with ‘CDU Friends,’ “ 19 Aug. 1958; F. Lindrath, “Memorandum on Meeting with Wegman (Lower Saxony Finance Minister),” 12 July 1958, B115/3391, BA.
249 Die Welt, 28 Jan. 1961.
250 Lower Saxony and the Federal Government would place their shares in a jointly run Stiftung which would receive and administer the dividends of the shares, initially being obliged to re-lend the proceeds to the federal and regional governments for five years at a favorable rate. In the long run the proceeds of the Stiftung were to be used to endow academic and technical research. The Stiftung would be jointly controlled by Lower Saxony and Federal Government, but, unlike the original SPD proposal, the Stiftung would not be the actual manager of VW but a body profiting from the operations of the company. Ministry of Finance, “Memorandum for Chancellor's Discussions with Ministers of Lower Saxony,” 13 Oct. 1959, B115/3391, BA.
251 F. Novotny to Bimbaum, 4 Oct. 1957, B115/3395, BA.
252 DM 457m in 1958—plus VW's notoriously large secret reserves—compared with Ford DM 46m and Opel DM 195m.
253 Dr. Elmendorff to Bimbaum, 8 April 1960, B115/3393, BA; Minutes of Cabinet Meeting, 29 June 1960, B115/338, BA. There was a large excess demand for the shares and their value rose sharply following the flotation bringing windfall profits.
254 Minutes of Supervisory Board, 10 June 1960, VW.
255 Minutes of Supervisory Board, 4 May 1961, VW.
256 Brumlop, Eva and Jürgens, Ulrich, “Rationalisation and Industrial Relations in the West German Auto Industry: A Case Study of Volkswagen,” in Jacobi, O. et al. , eds., Technological Change: Rationalization and Industrial Relations (London, 1986)Google Scholar.
257 Tolliday, Steven W., “From ‘Beetle Monoculture’ to the ‘German Model:’ The Transformation of Volkswagen, 1967–1991,” Business and Economic History 24, (Winter 1995)Google Scholar; Alfred Thimm, “Decision-making at Volkswagen, 1972–75,” Columbia Journal of World Business (Spring 1976).
258 Smith, Eric Owen, The German Economy (London, 1994), 464–470CrossRefGoogle Scholar; R. A. Hawkins, “Privatization in West Germany, 1957–1991,” NatWest Bank Quarterly Review (November 1991); Denton, G., Forsyth, M., and MacLennon, M., Economic Planning and Politics: Britain, France and Germany (London, 1968), 66–68Google Scholar.
259 For an excellent summary see Dumke, Rolf H., “Reassessing the Wirtschaftswunder: Reconstruction and Postwar Growth in West Germany in an International Context,” Oxford Bulletin of Economics and Statistics 52, (1990)Google Scholar; the other crucial contribution is Abelshauser, Die Wirtschaftgeschichte der Bundesrepublik Deutschland.
260 Borchardt, Knut and Buchheim, Christopher, “Die Wirkungen der Marshallplan Hilfe in Schlüsselbranchen der deutschen Wirtschaft,” Vierteljarhrshefte für Zeitgeschichte 35, (July 1987)Google Scholar; Stokes, Divide and Prosper, 151.
261 Abelshauser, Werner, Wirtschaft in Westdeutschland, 1945–1948 (Stuttgart, 1975)CrossRefGoogle Scholar; Borchardt, Knut, Perspectives on Modern German Economic History and Policy (Cambridge, 1991)CrossRefGoogle Scholar; Dumke, “Reassessing the Wirtschaftswunder” Wolf, Holger C., “The Lucky Miracle: Germany, 1945–51,” in Dornbusch, Rudiger, Nolling, Wilhelm and Layard, Richard, eds., Postwar Economic Reconstruction and Lessons for the East Today (Cambridge Mass., 1993)Google Scholar; Wallich, H., Mainsprings of the German Revival (New Haven, 1955)Google Scholar; Denison, Edward F., Why Growth Rates Differ: Postwar Experience in Nine Western Countries (Washington, D.C., 1967)Google Scholar.
262 Abramovitz, Moses, Thinking About Economic Growth: And Other Essays on Economic Growth and Welfare (Cambridge, 1989)CrossRefGoogle Scholar.
263 Sohmen, “Competition and Growth”; Giersch et al., Fading Miracle.
264 Abelshauser, Wirtschaft in Westdeutschland, 82; “Ansätze korporativer Marktwirtschaft in der Koreakrise der frühen fünfziger Jahre,” Vierteljahrshefte für Zeitgeschichte 30, (1982)Google Scholar; Reich, Fruits of Fascism; see also Kramer, West German Economy, 166–73; Giersch et al., Fading Miracle, 101–5.
265 Berghahn, Volker, The Americanization of West German Industry, 1945–73 (Leamington Spa, 1986), 4, 275–82Google Scholar.
266 A landmark work is Nicholls, Freedom with Responsibility; Berghahn, Volker, “Ideas into Politics: The Case of Ludwig Erhard,” in Bullen, R. J., von Strandmann, H. Pogge, and Polonsky, A. B., eds., Ideas into Politics: Aspects of European History, 1880–1950 (London, 1984)Google Scholar.
267 On these issues see: Braun, Hans-Joachim, The German Economy in the Twentieth Century: The German Reich and the Federal Republic (London, 1990), 178–181CrossRefGoogle Scholar; Roseman, Mark, Recasting the Ruhr, 1945–1958: Manpower, Economic Recovery and Labour Relations (Oxford, 1992)Google Scholar; Stokes, Opting for Oil, passim (the synthetic rubber case is covered on 203–5); Kramer, West German Economy, 203–4; Stolper, Wolfgang F. and Roskamp, Karl W., “Planning a Free Economy: Germany, 1945–60,” in Richter, R., ed., Currency and Economic Reform: West Germany After World War Two: Zeitschrift für die gesamte Staatswissenschaft 135 (1979)Google Scholar; Berghahn, Americanization, 291; the fullest account of manoeuvres on the anti-cartel bill is in Robert, A., Konzentrationspolitik in der Bundesrepublik (Berlin, 1976)Google Scholar.
268 Edwards, Jeremy and Fischer, Klaus, Banks, Finance, and Investment in Germany (Cambridge, 1994)CrossRefGoogle Scholar.
269 Nicholls, Freedom with Responsibility, 284, 234–47, 270–2; Milward, Alan S., The European Rescue of the Nation State (London, 1992), 198–9Google Scholar; Stokes, Opting for Oil, 103–5, also notes the importance of such conflicts in the chemical industry.
270 This era of transition is well captured in Berghahn, Americanization at the national level and by Stokes, Opting for Oil at the sectoral level.
271 Monnich, The BMW Story, 427–30, 466, 475–9.
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