From Business History: Hitler's Gift to the Hippies: The VW Beetle Story Part I

Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than add supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. Learn how podcasting can help your business. Call 844-844-IHEART. This is Special Agent Regal, Special Agent Bradley Hall. In 2018, the FBI took down a ring of spies working for China's Ministry of State Security, one of the most mysterious intelligence agencies in the world. The Sixth Bureau podcast is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets. Listen to The Sixth Bureau on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Nancy Glass, host of the Burden of Guilt Season 2 podcast. This is a story about a horrendous lie that destroyed two families. Late one night, Bobby Gumpright became the victim of a random crime. The perpetrator was sentenced to 99 years until a confession changed everything. I was a monster. Listen to Burden of Guilt Season 2 on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Pushkin. Too quick? No, it was perfect. Pushkin. Stop. You got it. Where are we going to start this story, Jacob? The place is Hollywood. The time is the late 1960s. Yes. We are on the lot of a big Hollywood studio. They're making a racing picture, and they need to figure out what car the hero is going to drive. They know it's going to be something small, sporty, foreign. And so what they do is they get a bunch of candidates, a bunch of possible cars. So maybe an Aston Martin, like a little Fiat. Yeah. Volkswagen Beetle. And they park them on the studio lot right outside the commissary. And they just let like the ordinary people who work at the studio check out the cars as they're coming and going. And they watch how the people react to the cars. And with most of the cars, people do what you expect. Maybe they kick the tires. Is that actually a thing? Is it just a metaphor? No, I think it's like back when rubber was bad. Really? Like your foot would go through? Is that what it was? I don't know. You want a little bounce on the tire. Okay. They like, you know, play with the steering wheel, whatever. But when the people get to the Volkswagen Beetle, they act in an entirely different way. They treat it not so much like a car, as like a cute little puppy. They're like petting it. Yeah, they're tapping the car. Race it, yeah, yeah. And the producers see this and they think, oh, this car is different. This car has charisma. This car is a star. And they were originally going to call the movie Car Boy Girl. Why not? 60s, yeah. Sure. But they loved the Beatles so much that they ended up calling the movie the Love Bug. Herbie the Love Bug. I remember this from my childhood. I remember Herbie Goes Bananas, the sequel. Of course. It had the novelization, which I bought at the book fair and liked. The movie was a hit. The second biggest grossing movie of 1969, right behind Butch Cassidy and the Sundance Kid. Another classic. And, of course, so was the Beetle. Late 60s, peak Beetle. The car is, in fact, about to become in a few years the best-selling car of all time, a record that it still holds. And maybe my favorite thing about the Beetle in a perverse way, this cute little puppy dog hippie car, was dreamed up by Adolf Hitler in part to conquer and subjugate his European neighbors. I'm Jacob Goldstein. And I'm Robert Smith. And this is Business History, otherwise known as Boy Boy Podcast. Otherwise known as a show about the history of business. These days, we talk a lot about industrial policy, the role of government in commerce. When should a government intervene in the free market and decide what to manufacture? You know, pick winners and losers, determine the prices of things even. Hitler tried to do all three and it was a disaster, except for the car itself. It turned out to be pretty successful. The most successful car in the history of cars. In the 1930s, Germany was a wreck. It had lost World War I, had unsustainable reparations put on it, the Treaty of Versailles. It had the inflation of the 1920s. The inflation of all inflations. Wheelbarrows full of money. You've seen the pictures. And then coming in the 1930s, there is a global depression. And Germany is just hitting the skids. It's got 30% unemployment, utter poverty. And Adolf Hitler comes in with his promises. Yeah. So 1933, Hitler comes to power, of course, promising that he's going to, you know, make Germany the greatest nation on Earth. And one important part of his promise is material prosperity. Right. Germany is it's not just a country in the Depression, not just a country that has been burdened with reparations. It is much poorer than France, the United Kingdom and much, much poorer than the United States. And so part of Hitler's program, his promise, is to figure out how Germans can get the kind of mass-produced goods that ordinary people in the United States are now buying. And that's exactly what the Germans wanted to hear at this time. Sure. And in particular, you know, mass production and mass consumption is built on this idea of sort of the people, the mass of people. Right. And the mass of people is really important for Hitler and the Nazis. Right. There is this German word Volk, like folk, and it can mean people or it can mean nation. the Nazis have this term, and I will say now, I don't speak German, as you will hear in this show, but the Nazis have this term Volksgemeinschaft, which means people's community. And it is their dream of the Volk as a nation. And of course, crucially, right, for Hitler, the Volk doesn't mean all the people in Germany. It means the Aryans and not the Jews and not all the other undesirables. So Hitler comes to power with this promise of prosperity, and he starts promising all this Volks stuff. There's the... You can do it. You can do it. Volkschemfanger radio. People's radio. Volkskühlschrank. People's refrigerator, the cool. The cool. The Volkstrakter. Tractor. Tractor, yeah. And maybe the Fuhrer's favorite, in fact, the Volkswagen. And it's interesting because that Hitler really prioritizes this. You know, just a few weeks after he takes power in 1933. He goes to the Berlin Motor Show, which is amazing, right? But I mean, I guess at the time- You think he's busy, right? He's got a lot to do. Yeah. And he's like, what do we need to do first? A car. Yeah. And maybe because it's a symbol of prosperity or maybe because he's already thinking about what a car can do. And it's at that motor show, 1933, that he announces this dream of the Volkswagen. Yeah. And this dream for him, it means a lot of things, right? There is also this idea that Like, when the Volk have cars, it will help unite them as a people, right? If you think of traditional rural poverty, like, you don't have a car, it's hard to go from town to town. But if everybody has a Wagen, then all the Volk, they can go and see the beautiful countryside. They can go and visit their neighbors. They are distinct regions. And, in fact, were separate countries at one point, right? Not that long before this. Yes. So it brings them together as a country. And then there's another part of the plan, which is at this point, because there are not a lot of cars in Germany, not a lot of Germans know how to drive. And Hitler has this desire to take new territory. And in order to do that, he is going to need young men with guns who can drive somewhere. Germany really is far behind here, right? Like in the U.S. at this point, there's something like one car or truck for every five people. And in Germany, it's more like one car or truck for every 150 people. And it's interesting because Germany invented the car. They invented the car and there were other small cars for sale, but they're really expensive. They're almost just bespoke hobby vehicles, right? Yeah, like even a cheap car in Germany at this point costs something like 2,000 Reichsmarks, which is around two years salary for a typical worker. And much more expensive, I should say, than basic cars in the U.S. were at this point, right? Germany had not mastered the mass production of the good cheap car the way Ford and GM had in the United States. So Hitler's dream, car manufacturing and that it be cheap enough that the German people can afford it. So Hitler says, no, it cannot be 2,000 Reichsmarks. It should be 990 Reichsmarks. I love this. Like he's at a 99-cent star. 990 Reichsmarks, which is less than half the price of the going car. And according to Hitler, like he has all these ideas for it. It should seat four or five people so a German family can travel around, right? It should go at least 50 miles an hour, you know, that way you can get to Moscow in a timely way. Got to put the Blitz in the Blitzkrieg. Exactly right. And he says you should be able to mount machine guns on it. Sure. Not for the family vacation, but, you know, for other things. You never know. Other plans, right? And now there are German car makers in Germany, right? There's still a private industry at this point in the country. And they look at Hitler's specs and price and they say, no way. You know they are of course aware that cheaper cars are made in the U but the German market is way smaller than the U There are fewer Germans Germans are much poorer So even if the automakers could get all of the knowledge could build a factory like the ones in the United States, there just isn't a German market big enough to get the economy of scale, to sell a car this good at a price this low. And the carmakers, you know, they get together and they're like, so who's going to tell the Fuhrer, Adolf Hitler, that we can't do it. Man, we have some notes on the Volkswagen. On your big plan, you've told everybody at the auto show. What? No, nobody's going to do that. So what does a company do when it doesn't want to deliver the bad news? They hire a consultant. Yes, that's what they're for. Yeah, they're going to have the consultant write a report to the Fuhrer that says, as an independent observer, it is not possible to make a car and sell it for 990 Rex marks. And pretty soon they find their man, automotive engineer by the name of Dr. Ferdinand Porsche. We'll talk about him after the break. We will. music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. So whatever your customers listen to, they'll hear your message. Plus, only iHeart can extend your message to audiences across broadcast radio. Think podcasting can help your business? Think iHeart. Streaming, radio, and podcasting. Let us show you at iHeartAdvertising.com. That's iHeartAdvertising.com. I'm Nancy Glass, host of the Burden of Guilt Season 2 podcast. This is a story about a horrendous lie that destroyed two families. Late one night, Bobby Gumpwright became the victim of a random crime. He pulls the gun, tells me to lie down on the ground. He identified Jermaine Hudson as the perpetrator. Jermaine was sentenced to 99 years. I'm like, Lord, this can't be real. I thought it was a mistaken identity. The best lie is partial truth. For 22 years, only two people knew the truth. Until a confession changed everything. I was a monster. Listen to Burden of Guilt Season 2 on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. What if mind control is real? If you could control the behavior of anybody around you, what kind of life would you have? Can you hypnotically persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. NLP, aka Neuro Linguistic Programming, is a blend of hypnosis, linguistics, and psychology. Fans say it's like finally getting a user manual for your brain. It's about engineering consciousness. Mind Games is the story of NLP. It's crazy cast of disciples and the fake doctor who invented it at a New Age commune and sold it to guys in suits. He stood trial for murder and got acquitted. The biggest mind game of all? NLP might actually work. This is wild. Listen to Mind Games on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. Okay, that's the end of the ad. When we left, the German automakers had just decided to hire as their consultant one Dr. Ferdinand Porsche. I'm guessing he is not a medical doctor. He's not even an engineering doctor. He's an honorary engineering doctor. But the doctor's important. Maybe he gets the respect of the Fuhrer. He can lay the truth to him and just say it is not economically possible to build a cheap car. Well, yeah. And certainly Porsche is, like, legit at this point. He's been working in the auto industry for decades. He's in his mid-50s. He designed cars for Daimler. He worked on racing teams. And at this point, he is, in fact, a consultant. He's running a consultancy. And he gets this call from the automakers to be the, you know, bad news consultant. And he takes the job. He says, yeah, sure, I'll study this. I'll write a report. But he's like, no, I'm not going to tell the Fuhrer no. I'm going to tell him yes. Hell yes. Hell yes. And I'll be the man to make his Volkswagen dream come true. German hero. And so he gets to work designing the people's car of Hitler's dreams. and pretty quickly comes up with this little scale model. And there are these amazing photos of Porsche and Hitler looking at a model that's like, I don't know, a foot long of what will become the Beetle. I would describe this car, except you have seen it. It looks exactly like every Volkswagen Beetle you have ever seen from the very beginning. It's that round little hedgehog looking car. And in this photo, you can see Porsche is on the left and Hitler, like full-on Hitler, swastika, armband, mustache, slick down hair, he's like petting the bumper. Just like the people at the movie studio 30 years later. Yeah. Yeah, and so we can talk about the design itself for a sec because it is so iconic is an overused word, but it really is, and they just nail it from the jump. Remember at the time, American cars in the 1930s are long and sort of flat. I mean, if you picture it right, there is a flat radiator grill on the front and then a long flat hood where the engine is. And then the top tends to be flat and long. It looks those cars look like a coffin, if you can imagine the kind of boxiness of them. Right. Yeah. Whereas the Beetle, it's incredibly round. And so there are a few things going on here. Right. One is at the time, this roundness. I mean, it is, in fact, aerodynamic. It conveyed modernity. Right. And in design, the Germans loved modernity. There's also a fact about a circle, which is a circle has the most area inside it for the least amount of circumference. So if you're building a car and you're trying to make it cheap, you can use less metal to make it circular and make it feel inside like there's more space. There's one other photo here that's amazing, and it goes with what we're talking about. same scene. In this instance, Porsche is like lifting up the back, what would be the trunk in a normal car. And Hitler is like gazing over to look and he's delighted. And I have to say, I find happy Hitler scarier than angry Hitler. He is kind of laughing his ass off because when you open the trunk of the car, what you see, in fact, is the engine. And I don't know if you've ever seen this in a Volkswagen Beetle, but the engine is in the back, which is an innovation at the time. And well, and also putting the engine in the back is part of what allows the front to be so round, right? In other cars at the time, the engine was in the front, the radiator was in the front, so you needed that big rectangle. And the air-cooled piece of this is key because there's not like modern antifreeze yet. The Germans don't have garages, And so it would basically freeze in the winter, particularly if you were like driving, say, to Moscow. Or just outside of Moscow. 15 miles outside of Moscow. Yes, exactly. Let's do one more picture. This one is from a few years later. Porsche has now built a full-size prototype of the Volkswagen Beetle. It is a convertible. And you can see in this photo, Hitler is sitting in the back. And this is a detail I just love about this photo. There are bars behind the front seat, the sort of bars that you might see on a roller coaster, right? And these were made so that Hitler could ride in the back of a Volkswagen and stand up and hold on to the bar with one hand and with the other hand. Well, you know, you know what's going to happen with the other hand. Yeah. Heil me. Sig Heil. I don't know what Hitler says when he does the Heil Hitler. Yes. So it's the Heil Hitler mobile. And of course he loves it. Of course he loves it. But a prototype does not mean that you can actually build this car or build it cheaply. That's what Porsche is not telling him. Well, right. And this is like one of the great lessons of manufacturing, right? Like it's actually not that hard to build a prototype, right, to design a car. What they have to do now is build a factory, which really means kind of invent a factory, right? Like optimizing a factory to build quality products at scale cheaply is a profoundly hard problem. And this is the problem that the German auto industry knew all along was going to be there. They knew all along that, sure, you could design a prototype, but you can't build it profitably and sell it at the price Hitler insists on selling it at. Ah, mein Führer, we have some thoughts about the Volkswagen. Yeah, they basically drag their feet, right? Because they know, like, to try and build this factory and make this car and sell it at the right price would drive them out of business. So Hitler sees this happening, and he's like, no, we're going to make this car. And so he goes back to his favorite place, the auto show in 1936, and gives another speech. I have to say, I just never knew this part of Hitler's obsession. I mean, he did give a lot of speeches. Yeah. We knew that part. I just didn't know the auto show part of it, right? And so here is what he says to the assembled auto manufacturers. I have given orders to pursue the preparations for the creation of the German people's car with relentless determination. And I will bring them to a conclusion. And that gentlemen will be a successful conclusion Mein Fuhrer we have some notes That quote, by the way, comes from Bernhard Reiger's great book, The People's Car, A Global History of the Volkswagen Beetle. So we're at this stalemate, right? Hitler wants the car. None of the companies that build cars in Germany want to build it. And into this stalemate steps the Deutsche Arbeitsfront, which is the Nazis' national labor organization. And by this point, mid-30s, they are rich and powerful because when Hitler took power, what they did was they threw the heads of Germany's unions into concentration camps and took all the money from the unions. And instead of using that money for the benefit of their union workers, they decide they're going to use this money to get the Fuhrer's favor, right? To do what he wants and to put money into a factory. Yeah, they are going to build the factory to build the people's car and to run the project they pick. Some kiss ass they found off the street. Dr. Ferdinand Porsche. Yes. Yes. So where are we now? Porsche has his design. Yes. He has a source of capital. He has money, but he lacks human capital, right? This very important piece of industrialization, of progress, right? Nobody in Germany knows how to build a factory that's efficient enough to make cars at the scale that Hitler is dreaming of and as efficiently as Hitler is dreaming of. Like, nobody knows how to do it. This is one of those unappreciated facts about industrialization and the industrial revolution. You think it's just the machines. It is not the machines. It is people who can run the machines in a really productive, effective way. And the way you set up the machines and the way they all communicate with each other is something that is proprietary knowledge. It takes years to do. Yeah, I mean, the classic framework for economic growth was land, labor and capital. And then like 100 years in, somebody, Paul Rumer, actually, I think, was like, no, no, it's land, labor, capital and knowledge. So who knows how to build a big factory with an assembly line to make cars by the hundreds of thousands for the masses? Henry Ford, who literally invented mass production of cars, kind of invented modern mass production. He has perfected this in an amazing way. Yeah, of course, Henry Ford is really famous for two things, that assembly line you mentioned, and hating the Jews. Famous anti-Semite. Yeah. And like, not just like, oh, everybody used to hate the Jews. Like he really put his heart into it. Really did. He industrialized the Jew hating. He paid for this newspaper, the Dearborn Independent, that published this series called The International Jew. Was that pro or con international Jew? Well, let me clarify. They consolidated the series into a book and the book was called The International Jew, The World's Foremost Problem. Hitler was a fan of the book. He actually had copies of it in his office in the 20s, translated into German. And he also had on his wall a portrait of Mein Heinrich, of Henry Ford. You know, it's bad if you have a picture of Adolf Hitler on your wall. But even worse is if Adolf Hitler has a picture of you on the wall. Like, that's as bad as it gets. That's peak. So, yes. So Dr. Portia and a few of his colleagues are able to travel to Michigan to see Henry Ford's incredible plant, incredible sort of temple of mass production and efficiency, learn from it and go back to Germany to build the factory. And what they saw really was a miracle at the time, the River Rouge plant, where raw materials like raw steel would go in one end. They had power plants, transformational, all of the industrial machinery. They had a foundry. And cars roll out the other end. Yeah. Like, it is a miracle at the time. And they think, oh, we got to build this for the Fuhrer. Yeah. And so they go out to basically the countryside where nothing exists. And they start building. They build, you know, the factory. But they also build a power plant and a foundry and houses where the workers are going to work. And the workers, by the way, are not just anybody. The workers themselves are going to be the Volk. It's going to be the car by the Volk for the Volk. So everybody they're recruiting are like Hitler youth. It is a fascinating experiment in a way, right? Because the Henry Ford plant was the product of the free market competition. Workers came and learned at the plant but could work at other car manufacturers or bring back skills from other car manufacturers to the Henry Ford plant. Here's Hitler saying, well, I know what it should look like. So let's just do it without competition. Let's not bring the best workers, but the most loyal workers, the Aryan youth. Like, let's bring them. Let's set the price. Let's make this happen. The dream was to build 150,000 cars in the first year, going up to 1.5 million cars a year, which is like more cars than there are in all of Germany at this point. And so in 1938, Hitler goes to this ceremony to lay the cornerstone at the factory. And he gives, wait for it, a speech defending the idea and talking about the haters, actually. He says something like, you know, people told me this was a terrible idea, impossible. But here they are breaking ground on the factory. Hitler says, in fact, I hate the word impossible. And around this point, they decide to rename the car. They've just been calling it the Volkswagen, like the Volks everything else. But around this time, they decide they're going to call it the Kraft durch Freude, the Strength Through Joy Wagon, KDF for short. It's amazing. I just want to say it again, Strength Through Joy. And this is 1938. So there's not a lot of joy left these days in Germany. That's how you know when they start to name the car Strength Through Joy. I mean, it is so, like, amazingly Orwellian. And you're like, oh, right. This is what Orwell was writing about. This is what he was talking about. Strength Through Joy. And in fact, KDF, Strength Through Joy, was like a brand for the Nazis at this point. There was like KDF cruise ships and the Arbeitsfront, this labor group that remembers bankrolling the factory, they're like into KDF. And part of the idea, I think, is they are basically underpaying the workers, but trying to like kind of make it up or keep them happy enough by giving them these little baubles, like little KDF vacations and hopefully a car. So at the end of this ceremony, where they're going to start building the factory, Hitler drives off in one of these KDF cars. Ferdinand Porsche sat beside him. Porsche's son is driving it. The crowd of 55,000 people goes wild. The New York Times says this is a public relations coup. And they call the car, when they're describing it in New York Timesian language, a shiny little beetle. Uh-huh. Which is the first time we hear this referred to as an adorable bug. So they've just laid the cornerstone. The factory is not built yet. But Dr. Porsche, not a real doctor, and the Arbeitsfront, they have this clever sales model, actually a model that Mein Heinrich Henry Ford had used earlier. And that is this. Ordinary Germans could sign up for like a savings plan where they pay in five Reichsmarks a week, which is like, you know, a typical German makes maybe 25 Reichsmarks a week. So like a significant chunk. And once they'd saved 750 Reichsmarks or so, so this is like a few years of savings, they would get an order number for their brand new Strength Through Joy Wagen. I can see the advertising campaign. I'm assuming at this point in 1938, it's a little encouraged by authorities to give up your wages for this car that may or may not come. I mean, it is certainly good business. Let's set aside at the point of the gun for a moment just to say if you can get people to pay for a thing where you haven't even built the factory, that is good for you, right? because now they are providing the capital that you need to build the factory to deliver the car. And in fact, through compulsion or otherwise, people do sign up. They have something like 250,000 orders come in, which is a lot, although to be clear, not nearly enough to make the car economically feasible, right? They're going to need to build so many more if they ever want to sell it at the 990 Reichsmarks that Hitler said and not go bankrupt. If you're taking notes at this point saying, well, I mean, kind of seems like a good idea. You're taking all this money from people, building the factory, promising the cars. They're actually creating construction jobs, you know? You had this economically devastated Germany, which now is seeing action, right? People have jobs, money is flowing, all this sort of stuff. I should say that if you have a command and control economy like this, you can make the economy have a sort of sugar high very quickly, right? You can get people to work in all of this. But long term, you are producing a car that costs more than you're going to sell it for. Like eventually, like I think Germany could have come up with a great cheap car, but it would have required a lot of different companies competing and finding, you know, incremental progress rather than this. We're going to lay out the whole plan and do it immediately. But, you know, as it happens, long term economic growth is not going to be the main question in Germany in the years following 1938. Yes, because in 1939... I know what happens. Germany invades Poland. It's World War II. Let's take a quick break, and then we'll continue with the story. Run a business and not thinking about podcasting? Think again. More Americans listen to podcasts than ad-supported streaming music from Spotify and Pandora. And as the number one podcaster, iHeart's twice as large as the next two combined. So whatever your customers listen to, they hear your message Plus only iHeart can extend your message to audiences across broadcast radio Think podcasting can help your business Think iHeart Streaming radio and podcasting Let us show you at iHeartAdvertising.com. That's iHeartAdvertising.com. I'm Nancy Glass, host of the Burden of Guilt Season 2 podcast. This is a story about a horrendous lie that destroyed two families. Late one night, Bobby Gumpwright became the victim of a random crime. He pulls the gun, tells me to lie down on the ground. He identified Jermaine Hudson as the perpetrator. Jermaine was sentenced to 99 years. I'm like, Lord, this can't be real. I thought it was a mistaken identity. The best lie is partial truth. For 22 years, only two people knew the truth until a confession changed everything. I was a monster. Listen to Burden of Guilt Season 2 on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. persuade someone to buy a car? When you look at your car, you're going to become overwhelmed with such good feelings. Can you hypnotize someone into sleeping with you? I gave her some suggestions to be sexually aroused. Can you get someone to join your cult? NLP was used on me to access my subconscious. NLP, aka Neuro Linguistic Programming, is a blend of hypnosis, linguistics, and psychology. Fans say it's like finally getting a user manual for your brain. It's about engineering consciousness. Mind Games is the story of NLP. It's crazy cast of disciples and the fake doctor who invented it at a New Age commune and sold it to guys in suits. He stood trial for murder and got acquitted. The biggest mind game of all? NLP might actually work. This is wild. Listen to Mind Games on the iHeart Radio app, Apple Podcasts, or wherever you get your podcasts. And so, initially, this KDF factory starts making just very sort of classic war things like aircraft wings and fuel tanks, but it's not going well. You know, it wasn't built to build whatever aircraft wings. And so Dr. Porsche, not a real doctor, says, remember, Fuhrer, you had the idea of like the machine guns and like building it to, say, invade Poland. Why don't we do that? Why don't we take this cute little round Volkswagen and turn it into like an attack wagon? And I've seen a picture of it and it's amazing. You can still see the beetle shape under it, but it looks as if a hedgehog is sort of wearing medieval armor. It's much more boxy. the car is jacked up a little bit higher, you know, so that it could drive over, I don't know, the fields of Poland and attack people. They call it the Kubelwagen, the bucket car. And there's one modification that's just interesting to me that they make, which is they actually have to make it so that it can drive slower, I guess, without stalling out, right? Because it has to drive at the speed that the army marches. So now they have the model of the car they're going to build to further the war effort. But all those Hitler youth who were working in that KDF factory are now off fighting the war. They are gone. And so here is where it starts to get much worse, frankly. This is a story about the Nazis. Perhaps unsurprisingly, it's going to get bad right now. So the Nazis arrange for basically enslaved Polish women. Poland has been conquered by this point, enslaved Polish women to be sent in to be forced laborers at this factory. Hundreds of them, 300 of them. But it's not going that well. Of course, you know, these women are being forced to make a car that is being used to subjugate their own country. And they're untrained and it's just not working out. So they fire the guy who's running the factory and they bring in Portia's son-in-law, a guy named Anton Piech. And he just brings in all of the enslaved workers that he can. He goes from hundreds to thousands. There are Soviet soldiers who had been taken prisoner, but they are like so badly treated and starved by the time they get there that they can't do much and they start to literally die off. There are Dutch students who refuse to sign a loyalty pledge. They are delivered to the factory. And more and more, they're bringing in Jews from concentration camps, along with their SS guards who are making them work. At this point, the workers are making the Kubelwagens, right? They're also making military stoves, weapons, parts for missiles. This is a pure military industrial complex at this point. And it is a profitable one. You know, the Porsche family, they are charging the Nazis to do all of this and making a huge profit because they're not paying their workers, right? And there's one detail from the official history of Volkswagen that I want to mention about what happens at the factory around this time. And that is this. Some of the enslaved women brought to the factory were pregnant when they arrived or became pregnant later. And what they started doing was taking the babies from their mothers, you know, right after they were born. And they said they were putting them in a nursery, but really the nursery was just abandoning them to die. Like here, I'll quote from the official history. It says, by the end of the war, 365 children died as a result of neglect and inadequate nutrition. Basically, every baby sent to this facility died. It's late 1944 at this point, 1945, early 1945, and the Allies are closing in on Germany. They are starting to bomb the plant, the Volkswagen plant. They're moving closer and closer to Germany itself. So, Porsche and his son-in-law, Pierre, they've actually been, like, squirreling away millions of Reichsmarks this whole time, and they flee to Austria. And this is the chance, as the plant is falling apart, that the prisoners there have been waiting for. They take over what's left of the factory and they start to hunt down the worst of their oppressors, the guards and the management that were like enslaving them. And then finally, sometime around April 15th of 1945, the Americans occupy the Volkswagen factory. They find the starving enslaved workforce and the nursery where the babies had died. You know, they see everything. The Nazis have lost. The Allies have won. And one of the reasons the Allies won was what Hitler wanted. The Allies outproduced the Germans, largely using factories owned by GM, Chrysler, and even Henry Ford. Mein Heinrich, right? They built the bombers and the tanks and the Jeeps that allowed the U.S., the Allies, to win the war. Yeah. I mean, there is this there's this phrase people use, the arsenal of democracy. Right. And it's really interesting, like the American industrial economy and in particular, the car makers that had developed in this competitive private market for decades when the war came were turned to basically government production to make military vehicles. But because of what they'd honed in the private market, they were amazing at it and they outproduced the Nazis. And that was key to winning the war. So how does this utter failure of a plan by Adolf Hitler, no people's car, destroyed factory, a legacy of evil, how does that company go on to make a cute car beloved by Americans? That is the story for next time, part two of The Beetle. When we bring this story to a conclusion, and that, gentlemen, will be a successful conclusion. Appreciate the commitment to the bet. Yeah, try it. Our producer is Gabriel Hunter Chang. Our engineer is Sarah Brugger. And our showrunner is Ryan Dilley. I'm Jacob Goldstein. And I'm Robert Smith. We'll be back next week with another episode of Business History. A show about the history. Wait for it. Of business. This is Special Agent Regal, Special Agent Bradley Hall. In 2018, the FBI took down a ring of spies working for China's Ministry of State Security. one of the most mysterious intelligence agencies in the world. The Sixth Bureau podcast is a story of the inner workings of the MSS and how one man's ambition and mistakes opened its vault of secrets. Listen to The Sixth Bureau on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. I'm Nancy Glass, host of the Burden of Guilt Season 2 podcast. This is a story about a horrendous lie that destroyed two families. Late one night, Bobby Gumpright became the victim of a random crime. The perpetrator was sentenced to 99 years until a confession changed everything. I was a monster. Listen to Burden of Guilt Season 2 on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts. 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