1 00:00:17,560 --> 00:00:19,040 Speaker 1: Pushkin too quick. 2 00:00:19,240 --> 00:00:35,200 Speaker 2: No, it's perfect Pushkin stop, you got it. 3 00:00:36,840 --> 00:00:40,279 Speaker 3: How does a country that is completely destroyed end up 4 00:00:40,280 --> 00:00:43,080 Speaker 3: making the best selling car of all time? 5 00:00:43,800 --> 00:00:44,840 Speaker 1: This is business history. 6 00:00:44,960 --> 00:00:48,080 Speaker 3: Last time on the show, Adolf Hitler had a to 7 00:00:48,159 --> 00:00:51,120 Speaker 3: do list. It was a pretty evil to do list. 8 00:00:50,960 --> 00:00:53,559 Speaker 3: But way down on the to do list he was 9 00:00:53,600 --> 00:00:57,120 Speaker 3: going to design a car for the German. 10 00:00:56,840 --> 00:00:59,560 Speaker 1: People, for the German volcan if you will, it was 11 00:00:59,600 --> 00:01:01,600 Speaker 1: going to be a volks wagin. 12 00:01:01,800 --> 00:01:05,600 Speaker 3: An engineer named Ferdinand Porsche signed up to design and 13 00:01:05,640 --> 00:01:09,959 Speaker 3: build the Volkswagon. His son in law, Anton Pieck ran 14 00:01:10,039 --> 00:01:13,600 Speaker 3: the factory, and he ran it with utter brutality. He 15 00:01:13,720 --> 00:01:17,440 Speaker 3: forced enslaved workers to build the militarized version of the 16 00:01:17,520 --> 00:01:20,520 Speaker 3: Volkswagen Beetle. And then in the spring of nineteen forty five, 17 00:01:21,600 --> 00:01:23,959 Speaker 3: the two guys running the factory flee. The Allies come 18 00:01:24,000 --> 00:01:25,399 Speaker 3: in and the workers are freed. 19 00:01:25,800 --> 00:01:30,200 Speaker 1: And there is this question, a question for the Volkswagen 20 00:01:30,200 --> 00:01:33,880 Speaker 1: factory and for all of Germany, which is what are 21 00:01:33,920 --> 00:01:37,160 Speaker 1: the Allies gonna do with the factories? What's gonna happen 22 00:01:37,200 --> 00:01:38,520 Speaker 1: to the German economy. 23 00:01:38,600 --> 00:01:40,720 Speaker 3: It is tempting to say that what you should do 24 00:01:40,920 --> 00:01:43,920 Speaker 3: after two World Wars started by Germany. Perhaps you should 25 00:01:43,920 --> 00:01:46,560 Speaker 3: make it so that Germany can never fight again, more 26 00:01:46,600 --> 00:01:49,320 Speaker 3: than never fight again, can never produce anything, can't. 27 00:01:49,160 --> 00:01:51,440 Speaker 1: Produce a car, a rifle. 28 00:01:51,640 --> 00:01:55,240 Speaker 3: You want Germany to basically make pretzels and beer, and 29 00:01:55,240 --> 00:01:56,360 Speaker 3: that's it till the end of time. 30 00:01:56,600 --> 00:02:01,360 Speaker 1: And this was not just some like populist emotional response, right. 31 00:02:01,400 --> 00:02:05,240 Speaker 1: The Secretary of the Treasury of the United States of 32 00:02:05,280 --> 00:02:09,840 Speaker 1: America had exactly this response. His name was Henry Morgenthaw, 33 00:02:10,160 --> 00:02:13,440 Speaker 1: and he put together this plan called reasonably enough the 34 00:02:13,480 --> 00:02:17,840 Speaker 1: Morgan Thought Plan, and it said here, oh, yeah, of course, 35 00:02:17,920 --> 00:02:19,600 Speaker 1: of course you get to read from him. This is 36 00:02:19,639 --> 00:02:22,640 Speaker 1: my favorite part. Within a short period, if possible, not 37 00:02:22,720 --> 00:02:26,200 Speaker 1: longer than six months after the cessation of hostilities, all 38 00:02:26,360 --> 00:02:30,400 Speaker 1: industrial plants and equipment not destroyed by military action shall 39 00:02:30,440 --> 00:02:33,480 Speaker 1: either be completely dismantled and removed from the area or 40 00:02:33,520 --> 00:02:37,520 Speaker 1: completely destroyed. This is saying, like, if there is a 41 00:02:37,520 --> 00:02:40,640 Speaker 1: machine in it, we will take that machine or smash 42 00:02:40,680 --> 00:02:43,480 Speaker 1: it to bits. Yeah, this is basically saying, let's make 43 00:02:43,560 --> 00:02:47,720 Speaker 1: Germany a country of nineteenth century peasants farming the land 44 00:02:47,760 --> 00:02:48,840 Speaker 1: forever we know. 45 00:02:48,919 --> 00:02:51,880 Speaker 3: Of course, the United States decided not to pursue that plan. 46 00:02:52,040 --> 00:02:54,240 Speaker 1: We know in fact that the United States and its 47 00:02:54,280 --> 00:02:59,320 Speaker 1: allies decided to pursue essentially the opposite plan. Instead of 48 00:02:59,440 --> 00:03:03,920 Speaker 1: destroying the factories that supplied Germany's war machine, the Allies 49 00:03:03,919 --> 00:03:08,320 Speaker 1: helped the Germans rebuild them better than ever. I'm Jacob Goldstein, 50 00:03:08,360 --> 00:03:11,320 Speaker 1: I'm Robert Smith, and this is Business History, a show 51 00:03:11,360 --> 00:03:12,960 Speaker 1: about that history of business. 52 00:03:12,720 --> 00:03:15,040 Speaker 3: Love explaining that to people today on the show. How 53 00:03:15,080 --> 00:03:18,000 Speaker 3: did we get from a moment of utter destruction to 54 00:03:18,160 --> 00:03:21,919 Speaker 3: a German economic miracle where it became one of the 55 00:03:21,960 --> 00:03:25,880 Speaker 3: big manufacturing powers in the entire world? And how did 56 00:03:25,919 --> 00:03:28,800 Speaker 3: that lead to a little car that looked something like 57 00:03:28,840 --> 00:03:32,280 Speaker 3: a bug being driven around the streets of California by 58 00:03:32,360 --> 00:03:33,560 Speaker 3: hippies and surfers. 59 00:03:34,000 --> 00:03:36,800 Speaker 1: The war is over. The war is over. Good newses, 60 00:03:37,000 --> 00:03:40,680 Speaker 1: cheers Allies. The Soviets have occupied the eastern part of 61 00:03:40,800 --> 00:03:43,400 Speaker 1: Germany and they know what they're going to do with 62 00:03:43,480 --> 00:03:46,360 Speaker 1: the economy there. They're going to take everything. They're just 63 00:03:46,520 --> 00:03:50,680 Speaker 1: taking the factories back to the Soviet Union. But the Allies, 64 00:03:50,720 --> 00:03:53,040 Speaker 1: so the US, Britain and France, they have cut the 65 00:03:53,080 --> 00:03:56,440 Speaker 1: western part of Germany into three parts, three occupation zones, 66 00:03:57,080 --> 00:04:00,640 Speaker 1: and the Allies at this point can't really agree on 67 00:04:01,320 --> 00:04:04,280 Speaker 1: what to do with the German economy. The Americans were 68 00:04:04,520 --> 00:04:08,840 Speaker 1: super anti Nazi, fair enough. The British are obviously also 69 00:04:08,960 --> 00:04:12,720 Speaker 1: anti Nazi, but maybe they were like a little bit 70 00:04:12,800 --> 00:04:16,160 Speaker 1: less anti Nazi than the Americans, or like you could 71 00:04:16,200 --> 00:04:19,760 Speaker 1: at least say that British were more pragmatic about the situation. 72 00:04:20,200 --> 00:04:24,159 Speaker 1: For one thing, Britain, unlike the United States, at this moment, 73 00:04:24,320 --> 00:04:28,679 Speaker 1: was like flat broke. They had had their economy destroyed 74 00:04:28,680 --> 00:04:31,640 Speaker 1: by the war essentially, and they had this chunk of 75 00:04:31,680 --> 00:04:35,160 Speaker 1: Germany that they were responsible for managing, and they couldn't 76 00:04:35,200 --> 00:04:38,839 Speaker 1: afford to feed and clothe the Germans forever. They couldn't 77 00:04:38,839 --> 00:04:40,880 Speaker 1: afford for it to be a ward state. I mean 78 00:04:40,960 --> 00:04:45,360 Speaker 1: they're rationing food in London. Yeah. Yeah. The British still 79 00:04:45,600 --> 00:04:49,960 Speaker 1: have a big empire in Africa and in Asia at 80 00:04:49,960 --> 00:04:53,600 Speaker 1: this time, and so they are used to managing countries 81 00:04:53,640 --> 00:04:56,280 Speaker 1: that they have subjugated, and they tend to do it 82 00:04:57,320 --> 00:05:00,440 Speaker 1: without having to deploy that many troops. And what they 83 00:05:00,480 --> 00:05:03,560 Speaker 1: do is they deploy some small number of people and 84 00:05:03,600 --> 00:05:05,599 Speaker 1: then they get the locals to kind of run the 85 00:05:05,600 --> 00:05:08,440 Speaker 1: economy on their own. So they think, maybe we can 86 00:05:08,480 --> 00:05:09,440 Speaker 1: do this in Germany. 87 00:05:09,480 --> 00:05:11,000 Speaker 3: And there's a little bit of luck that comes in 88 00:05:11,000 --> 00:05:13,280 Speaker 3: for the Volkswagen factory because it happens to be in 89 00:05:13,320 --> 00:05:15,839 Speaker 3: the British section of West Germany. 90 00:05:16,000 --> 00:05:19,080 Speaker 1: And so the British sent in an Army office server 91 00:05:19,240 --> 00:05:23,320 Speaker 1: named ivan Hurst to basically run this factory that the 92 00:05:23,360 --> 00:05:25,960 Speaker 1: Allies have taken from the Nazis. At pictureman Khakis, I 93 00:05:26,040 --> 00:05:28,680 Speaker 1: just do you have rolled up sleeves, a hack a 94 00:05:28,720 --> 00:05:31,520 Speaker 1: sharp hat. Time to get to work here, boys, And 95 00:05:31,600 --> 00:05:33,919 Speaker 1: he finds when he gets to the factory that about 96 00:05:33,960 --> 00:05:37,559 Speaker 1: seventy percent of it is still in good shape, which 97 00:05:38,279 --> 00:05:40,680 Speaker 1: end of World War two in Germany is pretty good. 98 00:05:40,720 --> 00:05:44,200 Speaker 1: This is definitely a glass half full situation. And so 99 00:05:45,120 --> 00:05:48,440 Speaker 1: while the Allies are sort of thinking their big thoughts 100 00:05:48,440 --> 00:05:51,800 Speaker 1: about what should we do with the German economy, Ivanhurst thinks, 101 00:05:52,400 --> 00:05:54,440 Speaker 1: what's if we're going to start making some cars at 102 00:05:54,440 --> 00:05:56,320 Speaker 1: this car factory. He is an engineer. 103 00:05:56,400 --> 00:05:59,039 Speaker 3: What do engineers do they see a factory, They're like, 104 00:05:59,240 --> 00:05:59,960 Speaker 3: let's make some cars. 105 00:06:00,040 --> 00:06:02,320 Speaker 1: We can drive him around. He does have the good 106 00:06:02,360 --> 00:06:05,839 Speaker 1: sense to change the name of the town where the 107 00:06:05,839 --> 00:06:08,440 Speaker 1: factory is. It's a town that the Nazis had built 108 00:06:09,000 --> 00:06:11,440 Speaker 1: the Germans. As you remember from last time had built 109 00:06:11,480 --> 00:06:14,680 Speaker 1: the town alongside the factory and they called it. I 110 00:06:14,720 --> 00:06:21,159 Speaker 1: don't think German stot this kdf Wagins, which basically means 111 00:06:21,760 --> 00:06:28,400 Speaker 1: strength through joy cars town extremely Nazi name, yes, and 112 00:06:29,040 --> 00:06:31,640 Speaker 1: so Ivan and the British sort of look around town 113 00:06:31,680 --> 00:06:35,039 Speaker 1: and they say that there's this castle in town or 114 00:06:35,080 --> 00:06:39,440 Speaker 1: near town, and it's called Wolfsburg, perhaps of Wolfsburg, and so. 115 00:06:39,360 --> 00:06:41,039 Speaker 3: That's what they call the town. And that is still 116 00:06:41,080 --> 00:06:43,240 Speaker 3: the name of the town where Volkswagen is headquartered. 117 00:06:43,560 --> 00:06:44,680 Speaker 1: Slightly less nuts. 118 00:06:44,880 --> 00:06:49,400 Speaker 3: It's not super warm and fuzzy, right, Wolftown, Wolftown, So okay, 119 00:06:49,440 --> 00:06:53,200 Speaker 3: so they've de notified the name. He's getting the factory going, 120 00:06:53,320 --> 00:06:55,720 Speaker 3: and now he needs some demand, right, if they're gonna 121 00:06:55,720 --> 00:06:57,440 Speaker 3: make these cars, somebody's gonna have to buy them. 122 00:06:57,440 --> 00:07:01,560 Speaker 1: The Germans don't have any money, and so Hurst convinces 123 00:07:01,680 --> 00:07:05,080 Speaker 1: the British to order beetles to be used for the 124 00:07:05,120 --> 00:07:08,560 Speaker 1: occupation forces, which again very pragmatic. Right, it costs money 125 00:07:08,600 --> 00:07:11,679 Speaker 1: to make cars in England to ship them to Germany. 126 00:07:11,720 --> 00:07:13,480 Speaker 1: If you even can do that, if you even can 127 00:07:13,520 --> 00:07:17,880 Speaker 1: do that, yeah, So the British order twenty thousand beatles 128 00:07:17,920 --> 00:07:21,880 Speaker 1: Volkswagens to be delivered in a year, which is way 129 00:07:21,920 --> 00:07:24,320 Speaker 1: more cars than the factory has ever built in a year. 130 00:07:24,560 --> 00:07:27,680 Speaker 1: They're just putting the factory back together, and crucially, it 131 00:07:27,760 --> 00:07:30,200 Speaker 1: is not clear at this point who is actually gonna 132 00:07:30,320 --> 00:07:32,280 Speaker 1: work in the factory and build these cars. 133 00:07:32,640 --> 00:07:35,360 Speaker 3: To recap from last time they had had Arian youth 134 00:07:35,400 --> 00:07:38,160 Speaker 3: building the cars they were drafted off to the war. 135 00:07:38,240 --> 00:07:41,560 Speaker 3: Then they were using enslaved prisoners and they've obviously been 136 00:07:41,600 --> 00:07:44,560 Speaker 3: freed and escaped, and so when you look around, there's 137 00:07:44,600 --> 00:07:47,800 Speaker 3: also the people who enslaved those prisoners. 138 00:07:47,280 --> 00:07:49,320 Speaker 1: Right the people running the factory who worked. 139 00:07:49,080 --> 00:07:51,640 Speaker 3: For the Nazis or who were Nazis. You didn't want 140 00:07:51,720 --> 00:07:55,520 Speaker 3: them in charge. How Nazi is too Nazi? 141 00:07:55,720 --> 00:07:58,360 Speaker 1: It is a question that is central to the rebuilding 142 00:07:58,400 --> 00:08:01,520 Speaker 1: effort across the western part of Germany. Who can we 143 00:08:01,680 --> 00:08:05,080 Speaker 1: hire and feel like at least okay about hiring, and 144 00:08:05,160 --> 00:08:08,800 Speaker 1: who is absolutely too Nazi? Can never allow them back. 145 00:08:08,960 --> 00:08:11,720 Speaker 3: There was the incident we talked about last time in 146 00:08:11,720 --> 00:08:15,320 Speaker 3: the show show, which was the nursery where babies born 147 00:08:15,360 --> 00:08:18,280 Speaker 3: to the enslaved workers were brought. They promised they would 148 00:08:18,280 --> 00:08:20,480 Speaker 3: take care of the children, but they allow the children 149 00:08:20,520 --> 00:08:23,360 Speaker 3: to die. Those people clearly are too Nazi. 150 00:08:23,480 --> 00:08:23,640 Speaker 1: Right. 151 00:08:23,760 --> 00:08:26,520 Speaker 3: Ten members of the staff were tried for murder, two 152 00:08:26,600 --> 00:08:27,680 Speaker 3: were sentenced to death. 153 00:08:27,920 --> 00:08:30,400 Speaker 1: And then you get to the factory itself, where there 154 00:08:30,440 --> 00:08:33,040 Speaker 1: were some people clearly who were knowingly sending those babies 155 00:08:33,079 --> 00:08:35,760 Speaker 1: off to die. And Hurst and his colleagues go through 156 00:08:35,800 --> 00:08:38,960 Speaker 1: the records of the people who ran the factory and 157 00:08:38,960 --> 00:08:41,720 Speaker 1: they wind up firing two hundred and twenty eight people, 158 00:08:42,240 --> 00:08:45,720 Speaker 1: including the technical director and the head of operations at 159 00:08:45,720 --> 00:08:47,160 Speaker 1: the factory too Nazi. 160 00:08:47,480 --> 00:08:50,520 Speaker 3: So it kind of leaves you really with soldiers returning 161 00:08:50,520 --> 00:08:51,080 Speaker 3: from the war. 162 00:08:51,800 --> 00:08:55,319 Speaker 1: Yeah, and there are lots of soldiers who have been demobilized, 163 00:08:55,360 --> 00:09:00,080 Speaker 1: who are, you know, looking for work, but they are 164 00:09:00,200 --> 00:09:03,040 Speaker 1: very difficult people to manage, right, Like, now you have 165 00:09:03,160 --> 00:09:06,400 Speaker 1: this factory with people who were just off fighting the 166 00:09:06,480 --> 00:09:09,240 Speaker 1: Soviets on the Eastern Front. Imagine being the manager and 167 00:09:09,280 --> 00:09:11,320 Speaker 1: being like, hey, can you pick up the pace? Like, 168 00:09:11,440 --> 00:09:13,720 Speaker 1: see what's going to happen if you tell a Nazi 169 00:09:13,800 --> 00:09:14,800 Speaker 1: soldier to do that? 170 00:09:15,200 --> 00:09:18,040 Speaker 3: And here they are in a destroyed factory. There's no 171 00:09:18,120 --> 00:09:20,480 Speaker 3: real housing in the town, so they're being housed in 172 00:09:20,600 --> 00:09:24,120 Speaker 3: the cabins. I suppose for the former enslaved workers, they're 173 00:09:24,160 --> 00:09:27,040 Speaker 3: essentially working and living in a concentration camp. 174 00:09:27,440 --> 00:09:30,640 Speaker 1: Yes, and you know food is hard to come by. 175 00:09:30,640 --> 00:09:33,880 Speaker 1: I mean, Germany is destroyed, right, so you have workers 176 00:09:33,920 --> 00:09:36,600 Speaker 1: just wandering off to try and find something to eat. 177 00:09:37,040 --> 00:09:40,720 Speaker 1: People are living on like a thousand calories day. And 178 00:09:40,880 --> 00:09:44,720 Speaker 1: on top of all that, the winter of nineteen forty 179 00:09:44,800 --> 00:09:51,040 Speaker 1: six is particularly cold, and the ports freeze over and 180 00:09:51,120 --> 00:09:53,560 Speaker 1: the rail lines freeze over, and so you can't get 181 00:09:53,600 --> 00:09:56,520 Speaker 1: food to the factory, you can't get supplies to the factory. 182 00:09:57,040 --> 00:10:00,840 Speaker 1: Essentially the factory, the assembly line closes down for months. 183 00:10:01,160 --> 00:10:05,280 Speaker 3: So the British engineer Ivan Hurst promised twenty thousand vehicles. 184 00:10:06,200 --> 00:10:07,000 Speaker 3: Not looking good for. 185 00:10:07,000 --> 00:10:10,720 Speaker 1: Him, he does deliver ten thousand. Kind of a miracle, 186 00:10:10,840 --> 00:10:15,520 Speaker 1: kind of a miracle. They were ten thousand extremely bad cars. 187 00:10:16,760 --> 00:10:20,119 Speaker 1: They were built partly with like sort of quasi salvaged 188 00:10:20,160 --> 00:10:22,439 Speaker 1: parts that had been left over at the factory, and 189 00:10:22,559 --> 00:10:26,920 Speaker 1: like something like half of them, immediately after driving out 190 00:10:26,920 --> 00:10:28,840 Speaker 1: the factory gets had to come back for repairs. 191 00:10:29,000 --> 00:10:30,880 Speaker 3: It's like that moment in the comedy where the car 192 00:10:31,080 --> 00:10:33,760 Speaker 3: rolls off the production line. Everyone cheers and the wheels 193 00:10:33,800 --> 00:10:37,000 Speaker 3: fall off and the windshield caves in and everyone's. 194 00:10:36,640 --> 00:10:39,400 Speaker 1: Like, oh, it was that truly like doors wouldn't close, 195 00:10:39,480 --> 00:10:45,000 Speaker 1: headlights wouldn't work. But in an interesting quirk of history, 196 00:10:45,440 --> 00:10:48,200 Speaker 1: this proved to be kind of a lucky break for 197 00:10:49,000 --> 00:10:54,640 Speaker 1: Volkswagen itself, Volkswagen as an entity, because British engineers were 198 00:10:54,720 --> 00:10:58,360 Speaker 1: going around Germany looking at factories thinking like, are there 199 00:10:58,400 --> 00:11:00,640 Speaker 1: any really nice ones we want to take back to 200 00:11:00,720 --> 00:11:03,400 Speaker 1: England piece by piece as reparations for the war? Right, 201 00:11:03,440 --> 00:11:05,560 Speaker 1: this is still the spirit of the count to something. 202 00:11:05,360 --> 00:11:07,480 Speaker 3: Sit You could have a British people's wagon, you know, 203 00:11:07,559 --> 00:11:08,480 Speaker 3: built in Manchester. 204 00:11:08,840 --> 00:11:12,360 Speaker 1: And so these engineers come to the Volkswagen factor and 205 00:11:12,400 --> 00:11:15,599 Speaker 1: they see these garbage cars coming off the line and 206 00:11:15,640 --> 00:11:18,599 Speaker 1: they're like, this is a terrible vehicle. People around the 207 00:11:18,600 --> 00:11:20,719 Speaker 1: world are never going to want to drive these so 208 00:11:20,840 --> 00:11:23,200 Speaker 1: called Volkswagens. Will pass. 209 00:11:23,440 --> 00:11:27,400 Speaker 3: Thanks, I'm hearing the Benny Hill theme, but keep drive 210 00:11:27,520 --> 00:11:31,719 Speaker 3: the car and the doors are falling off. And so 211 00:11:32,120 --> 00:11:35,600 Speaker 3: this Volkswagen factory is removed from the reparations list. They 212 00:11:35,720 --> 00:11:37,599 Speaker 3: leave it alone. So around this time we're getting to 213 00:11:37,640 --> 00:11:39,920 Speaker 3: the later part of the nineteen forties, there is this 214 00:11:40,000 --> 00:11:44,200 Speaker 3: big important shift happening in Germany and Europe, and that 215 00:11:44,440 --> 00:11:48,440 Speaker 3: is that the Allies have decided that in general they 216 00:11:48,480 --> 00:11:51,800 Speaker 3: want Germany to actually thrive and succeed. 217 00:11:52,080 --> 00:11:54,720 Speaker 1: Yeah, and it's interesting to think about why this is happening, right. 218 00:11:54,760 --> 00:11:59,200 Speaker 1: There are a few reasons. One is, within Germany there 219 00:11:59,280 --> 00:12:03,640 Speaker 1: is a threat from the right, essentially from the former fascists. Uh. 220 00:12:03,800 --> 00:12:08,160 Speaker 1: People are painting swastikas on the walls of the Volkswagen 221 00:12:08,200 --> 00:12:12,200 Speaker 1: factory people. You know, they were Nazis three years for 222 00:12:12,320 --> 00:12:14,720 Speaker 1: this right and that spirit is still there, and so 223 00:12:15,800 --> 00:12:19,600 Speaker 1: the West is concerned about that. There is also a 224 00:12:19,679 --> 00:12:23,840 Speaker 1: threat from the left, right, the Soviets are right there, 225 00:12:23,960 --> 00:12:28,240 Speaker 1: right across the line in Germany. And furthermore, Communism is 226 00:12:28,320 --> 00:12:33,600 Speaker 1: popular in Western Europe right Chao Italia. And so there 227 00:12:33,679 --> 00:12:38,000 Speaker 1: is this idea which is we can fight the threat 228 00:12:38,080 --> 00:12:43,240 Speaker 1: both from the right and the left by helping the 229 00:12:43,520 --> 00:12:46,960 Speaker 1: ordinary people of Germany and Western Europe get richer. 230 00:12:47,120 --> 00:12:51,439 Speaker 3: They should rename the town's strength through capitalism, Yes, wagons town. 231 00:12:52,040 --> 00:12:54,240 Speaker 1: And you know, the Marshall Plan from the US is 232 00:12:54,240 --> 00:12:57,959 Speaker 1: probably the most famous part of this, but especially in Germany, 233 00:12:57,960 --> 00:13:01,679 Speaker 1: the Marshall Plan was not that big in terms of dollars. 234 00:13:02,520 --> 00:13:07,040 Speaker 1: I think more important was this vibe shift away from 235 00:13:07,559 --> 00:13:11,079 Speaker 1: let's make Germany poor and isolate it so they can't 236 00:13:11,160 --> 00:13:15,440 Speaker 1: hurt us, and toward let's make Germany rich and trade 237 00:13:15,440 --> 00:13:17,240 Speaker 1: with them so they don't want to hurt us. 238 00:13:17,440 --> 00:13:19,160 Speaker 3: And I know it's a different show that we'll do 239 00:13:19,240 --> 00:13:23,000 Speaker 3: one day, but the same thing was happening in Japan too. Yes, yes, 240 00:13:23,280 --> 00:13:27,680 Speaker 3: And I love this shift like it really makes me 241 00:13:27,840 --> 00:13:29,160 Speaker 3: happy to think about. 242 00:13:29,960 --> 00:13:33,200 Speaker 1: I guess partly because I believe in it. Right for me, 243 00:13:33,440 --> 00:13:38,439 Speaker 1: the central big idea of economics of markets is the 244 00:13:38,440 --> 00:13:41,840 Speaker 1: world is not zero sum. The pie can get bigger, 245 00:13:41,920 --> 00:13:45,480 Speaker 1: everybody can be better off, trade can bring nations together 246 00:13:45,559 --> 00:13:47,880 Speaker 1: in a web of prosperity. And I know this sounds 247 00:13:47,920 --> 00:13:51,720 Speaker 1: like naive or unfashionable, but I think it's true. 248 00:13:52,280 --> 00:13:54,719 Speaker 3: And this was the dream at the time that if 249 00:13:54,760 --> 00:13:57,679 Speaker 3: you pulled this off in Europe and in Germany, there 250 00:13:57,679 --> 00:14:01,920 Speaker 3: could be economic growth, shared prosperity, liberal democracy, a chicken 251 00:14:01,960 --> 00:14:04,800 Speaker 3: at every pot, a Volkswagen in every driveway. 252 00:14:06,000 --> 00:14:09,959 Speaker 1: After the break, we know it's gonna happen, but it's 253 00:14:10,000 --> 00:14:14,280 Speaker 1: really interesting how it happens. How Hitler's car wins over 254 00:14:14,400 --> 00:14:18,040 Speaker 1: America's hippies. That's what we're going to talk about later. 255 00:14:17,840 --> 00:14:42,240 Speaker 4: In the show. 256 00:14:44,080 --> 00:14:46,320 Speaker 1: Okay, at the end of the ads, let's get back 257 00:14:46,320 --> 00:14:49,280 Speaker 1: to what ivan Hurst is doing at the Volkswagen factory. 258 00:14:49,440 --> 00:14:52,560 Speaker 3: So after a few years ivan Hurst in his khaki 259 00:14:52,640 --> 00:14:56,160 Speaker 3: suit and Johnty hat, he started to turn things around 260 00:14:56,160 --> 00:14:59,400 Speaker 3: at Volkswagon. He's created a network of dealerships, which is 261 00:14:59,440 --> 00:15:02,360 Speaker 3: what you have to have, right trained mechanics. He's developed 262 00:15:02,400 --> 00:15:05,960 Speaker 3: a nicer version of the Beatle for export, and orders 263 00:15:05,960 --> 00:15:09,000 Speaker 3: are coming in at least nearby in Europe from Netherlands 264 00:15:09,040 --> 00:15:13,840 Speaker 3: and Switzerland, and it's time he feels to hand Volkswagen 265 00:15:14,000 --> 00:15:15,200 Speaker 3: back to the Germans. 266 00:15:15,680 --> 00:15:18,400 Speaker 1: And so you got to figure out then, ye who's 267 00:15:18,440 --> 00:15:20,840 Speaker 1: going to run it? And we get back to our 268 00:15:21,560 --> 00:15:24,240 Speaker 1: central question, how Nazi is to Nazi. 269 00:15:24,720 --> 00:15:29,200 Speaker 3: There were the guys who ran the factory before. They're problematic. 270 00:15:29,360 --> 00:15:33,400 Speaker 3: They're pretty Nazi, right. Ferdinand Porsche, who developed the beadle, 271 00:15:33,480 --> 00:15:33,760 Speaker 3: and his. 272 00:15:33,760 --> 00:15:39,960 Speaker 1: Son in law Anton pich Pisch, who actually ran the factory, 273 00:15:40,200 --> 00:15:42,840 Speaker 1: wound up joining the SS at the end of the war. 274 00:15:43,520 --> 00:15:47,160 Speaker 1: They fled to their estate in the Austrian countryside and 275 00:15:47,200 --> 00:15:49,480 Speaker 1: they actually there's this interesting story about them that's worth 276 00:15:49,480 --> 00:15:52,280 Speaker 1: telling for a minute. So the Allied soldiers caught up 277 00:15:52,320 --> 00:15:55,640 Speaker 1: with them and arrested them and questioned them. But what 278 00:15:55,680 --> 00:15:57,520 Speaker 1: the Allies were really interested in. 279 00:15:57,800 --> 00:16:00,360 Speaker 3: Not what they did, no, what they built, yeah, and 280 00:16:00,400 --> 00:16:02,800 Speaker 3: what they knew right they had worked I think Portion 281 00:16:02,880 --> 00:16:05,960 Speaker 3: in particular had worked on weapons systems, and as we know, 282 00:16:06,080 --> 00:16:10,680 Speaker 3: the Allies after the war were obsessed with what German engineers. 283 00:16:10,160 --> 00:16:13,840 Speaker 1: And scientists knew about building weapons. So they talked to 284 00:16:13,880 --> 00:16:17,520 Speaker 1: Porsche and then they release him. And then the French 285 00:16:17,640 --> 00:16:21,840 Speaker 1: car company Renault comes to Porsche and Piere and ask 286 00:16:21,960 --> 00:16:25,600 Speaker 1: them if they want to come help Renault build a 287 00:16:25,640 --> 00:16:29,520 Speaker 1: little people's car. It's people's car in French Voa tour 288 00:16:29,840 --> 00:16:33,160 Speaker 1: de Jon. I don't know, I just met that up. 289 00:16:33,200 --> 00:16:36,680 Speaker 1: I looked it up everyone and they say yes because 290 00:16:36,720 --> 00:16:40,000 Speaker 1: I think, you know, Porsche really does love designing cars 291 00:16:40,040 --> 00:16:43,560 Speaker 1: and building these cars. So Porsche and Piere and actually 292 00:16:43,560 --> 00:16:47,240 Speaker 1: Porsche's sun Fairy Porsche, they go to the French controlled 293 00:16:47,320 --> 00:16:51,480 Speaker 1: part of Germany to have talks with Renault. But the 294 00:16:51,640 --> 00:16:55,720 Speaker 1: guys at Pougeot, the other big French car company, they 295 00:16:55,800 --> 00:17:00,440 Speaker 1: hear about this and they're like, no, no, no way. 296 00:17:01,400 --> 00:17:04,640 Speaker 1: They point out that during the war, when the Nazis 297 00:17:04,679 --> 00:17:08,720 Speaker 1: had invaded France, Porsche had been given control of Pougeaut 298 00:17:08,800 --> 00:17:14,080 Speaker 1: factories and had, you know, sent some of the executives 299 00:17:14,119 --> 00:17:17,720 Speaker 1: to concentration camps where some of them died, and so 300 00:17:18,119 --> 00:17:20,359 Speaker 1: the Poushio guys are like, there is no way we 301 00:17:20,480 --> 00:17:22,960 Speaker 1: can work with this guy to build the car. He 302 00:17:23,160 --> 00:17:26,520 Speaker 1: is too Nazi, and so they get arrested again, this 303 00:17:26,680 --> 00:17:29,639 Speaker 1: time by the French. But eventually the French let him 304 00:17:29,680 --> 00:17:33,119 Speaker 1: go and they go home and they start a little 305 00:17:33,240 --> 00:17:38,399 Speaker 1: sports car company called Porsche. Porsche not too Nazi for 306 00:17:38,440 --> 00:17:40,320 Speaker 1: the world, not too Nazi for the world, but too 307 00:17:40,440 --> 00:17:42,600 Speaker 1: Nazi to run the Volkswagen factory. So they are not 308 00:17:42,720 --> 00:17:46,080 Speaker 1: going to work. So, you know, Ivanhurst crosses them off 309 00:17:46,160 --> 00:17:48,119 Speaker 1: the list of potential people to run the factory. 310 00:17:48,520 --> 00:17:51,040 Speaker 3: So he's going through the names and he comes up 311 00:17:51,240 --> 00:17:55,439 Speaker 3: with one Heinrich Nordhoff, and he had helped run Opel, 312 00:17:55,560 --> 00:17:57,520 Speaker 3: which I guess is car and truck firm in Germany. 313 00:17:58,000 --> 00:17:59,640 Speaker 1: He had GM. It was connected to GM. 314 00:17:59,680 --> 00:18:03,120 Speaker 3: I think it was GM's German operations, okay, but more 315 00:18:03,160 --> 00:18:06,200 Speaker 3: importantly he had been one of those German car makers 316 00:18:06,560 --> 00:18:08,040 Speaker 3: who had fought this idea of. 317 00:18:08,080 --> 00:18:09,199 Speaker 1: A Volkswagen right. 318 00:18:09,240 --> 00:18:11,960 Speaker 3: He had said, it's not possible, it can't be done, 319 00:18:12,600 --> 00:18:16,200 Speaker 3: and it sort of resisted Hitler's push for that. Now, 320 00:18:16,400 --> 00:18:20,199 Speaker 3: eventually he would cooperate with Hitler as and many people did. 321 00:18:20,280 --> 00:18:23,720 Speaker 3: He actually got an award from Hitler for meritorious service 322 00:18:23,840 --> 00:18:25,879 Speaker 3: in factory whatever whatever whatever the. 323 00:18:26,760 --> 00:18:31,400 Speaker 1: Ververt shoft Fur award. I think it means war economy leader. 324 00:18:31,440 --> 00:18:34,320 Speaker 1: But all I hear is Furer is like a mini Furer. 325 00:18:34,680 --> 00:18:37,680 Speaker 1: And for the Americans, that's too Nazi. Yeah, it's pretty Nazi. 326 00:18:37,680 --> 00:18:39,160 Speaker 1: If Hitler gives you an award and stuff. 327 00:18:39,240 --> 00:18:42,160 Speaker 3: Great British they're like, he gave out a lot of awards. 328 00:18:42,200 --> 00:18:47,040 Speaker 3: We've got to hire someone. So they hired and say 329 00:18:47,119 --> 00:18:48,959 Speaker 3: what you will about the Fearer's award. 330 00:18:50,240 --> 00:18:52,320 Speaker 1: Nordov was great at running a car company. Yeah, so 331 00:18:52,400 --> 00:18:56,159 Speaker 1: he comes in and you know, looks at the Volkswagen 332 00:18:56,200 --> 00:18:58,520 Speaker 1: and says, let's, you know, let's polish this thing up 333 00:18:58,560 --> 00:19:01,120 Speaker 1: a little, which is amazing. Remember they're emerging from the war. 334 00:19:01,200 --> 00:19:03,800 Speaker 1: They can barely build these cars. But he's smart enough 335 00:19:03,880 --> 00:19:06,800 Speaker 1: to know people like a little luxury, like a little 336 00:19:06,840 --> 00:19:09,040 Speaker 1: shine on there. They got to have better hub caps, 337 00:19:09,080 --> 00:19:11,600 Speaker 1: you know, shiny, right, you gotta have different colors. He 338 00:19:11,640 --> 00:19:16,240 Speaker 1: has like a Bordeaux red, pastel green colors, and like 339 00:19:16,359 --> 00:19:20,520 Speaker 1: any factory boss. He wants to get productivity up. He 340 00:19:20,720 --> 00:19:24,440 Speaker 1: specifically says he wants every worker to increase their productivity 341 00:19:24,560 --> 00:19:28,880 Speaker 1: by thirty percent, which is a tough ask. But here 342 00:19:29,960 --> 00:19:34,760 Speaker 1: Nordoff and really the entire German economy gets a big 343 00:19:34,840 --> 00:19:41,119 Speaker 1: boost from monetary policy. Great moments in monetary policy right 344 00:19:41,160 --> 00:19:42,840 Speaker 1: here Germany, nineteen forty eight. 345 00:19:43,000 --> 00:19:45,439 Speaker 3: So at the time, Germany is running on reichs Mars, 346 00:19:46,240 --> 00:19:49,720 Speaker 3: the currency. It was created in the nineteen twenties, and 347 00:19:50,600 --> 00:19:52,280 Speaker 3: it had been through a lot. There was a ton 348 00:19:52,320 --> 00:19:55,520 Speaker 3: of inflation. They weren't worth very much. It was still 349 00:19:55,680 --> 00:19:59,359 Speaker 3: the sort of German money from the war, right, and 350 00:19:59,560 --> 00:20:03,480 Speaker 3: so because it was sort of worthless and there was shortages, 351 00:20:04,440 --> 00:20:06,480 Speaker 3: the country of Germany at this point post war is 352 00:20:06,600 --> 00:20:10,120 Speaker 3: running on you know, bartering and ration slips and all 353 00:20:10,160 --> 00:20:13,159 Speaker 3: of this sort of stuff and occupation currency introduced by 354 00:20:13,720 --> 00:20:14,800 Speaker 3: the various allies. 355 00:20:15,280 --> 00:20:19,000 Speaker 1: And so if you're running a factory and paying your 356 00:20:19,040 --> 00:20:21,880 Speaker 1: workers in reichs mark worthless pieces of paper, you're kind 357 00:20:21,880 --> 00:20:24,200 Speaker 1: of out of luck. You can be like, work harder 358 00:20:24,320 --> 00:20:26,440 Speaker 1: or else I won't keep giving you these worthless pieces 359 00:20:26,480 --> 00:20:30,600 Speaker 1: of paper. And so the big break for Nordoff and 360 00:20:30,720 --> 00:20:33,200 Speaker 1: Volkswagen and really all of what's about to become West 361 00:20:33,280 --> 00:20:37,480 Speaker 1: Germany comes in June of nineteen forty eight, when the 362 00:20:37,560 --> 00:20:40,560 Speaker 1: Germans got rid of the reichs Mark and introduced a 363 00:20:40,680 --> 00:20:44,280 Speaker 1: new currency called the deutsche Mark. It's going to become 364 00:20:44,280 --> 00:20:48,000 Speaker 1: the most important currency in Europe. And you could trade 365 00:20:48,040 --> 00:20:50,800 Speaker 1: in ten reichs marks for one deutsch mark. 366 00:20:50,920 --> 00:20:52,920 Speaker 3: Which is the numerical part of it. But it was 367 00:20:53,040 --> 00:20:57,679 Speaker 3: also functionally a devaluation of the currency. So anyone who 368 00:20:57,760 --> 00:21:01,480 Speaker 3: had their savings could transfer their savings over to deutsch mark, 369 00:21:01,560 --> 00:21:05,640 Speaker 3: but it was worth almost nothing. It took away people's savings, 370 00:21:05,840 --> 00:21:09,160 Speaker 3: so not lucky for those people, but it allowed Germany 371 00:21:09,680 --> 00:21:12,159 Speaker 3: to remove the price controls and sort of start their 372 00:21:12,240 --> 00:21:13,960 Speaker 3: economy from scratch. You see this with a lot of 373 00:21:14,000 --> 00:21:17,200 Speaker 3: economies in trouble. They devalue the currency and kind of 374 00:21:17,320 --> 00:21:22,160 Speaker 3: start over. And so now to the extent people had savings, 375 00:21:22,200 --> 00:21:23,200 Speaker 3: those savings are gone. 376 00:21:23,440 --> 00:21:27,280 Speaker 1: But the money you get paid, if you say, work 377 00:21:27,359 --> 00:21:30,880 Speaker 1: at a factory can buy stuff is worth more. Yeah, 378 00:21:31,119 --> 00:21:33,880 Speaker 1: is worth something? Is functional, right, So now they're back 379 00:21:34,000 --> 00:21:36,359 Speaker 1: in the familiar world of you get a job, they 380 00:21:36,440 --> 00:21:38,520 Speaker 1: give you money, and you can use that money to 381 00:21:38,680 --> 00:21:42,680 Speaker 1: buy stuff. And so Nordhoff gets his productivity gain. Now 382 00:21:43,359 --> 00:21:45,919 Speaker 1: people are showing up to work, they're motivated to make 383 00:21:46,000 --> 00:21:48,480 Speaker 1: cars better, and the factory starts working better. 384 00:21:49,040 --> 00:21:51,959 Speaker 3: And there is another quirk of macroeconomics, which is if 385 00:21:52,000 --> 00:21:55,480 Speaker 3: you've devalued your currency, it also makes the objects you 386 00:21:55,640 --> 00:21:57,440 Speaker 3: make much cheaper to the world. 387 00:21:57,680 --> 00:22:01,800 Speaker 1: It helps exports, yes, and so not long after this, 388 00:22:02,240 --> 00:22:07,119 Speaker 1: in nineteen forty nine, the British turned Volkswagen over to 389 00:22:07,280 --> 00:22:12,720 Speaker 1: the newly formed Western and government going to the new decade. 390 00:22:13,119 --> 00:22:16,600 Speaker 1: The new currency is propelling Germany forward. Exports are starting 391 00:22:16,680 --> 00:22:23,520 Speaker 1: to grow and it happens the vertschaft Wunder, the German 392 00:22:23,680 --> 00:22:26,520 Speaker 1: economic miracle votschaft WNDA. 393 00:22:27,160 --> 00:22:27,720 Speaker 3: You know, the. 394 00:22:28,119 --> 00:22:30,959 Speaker 1: Decade of the fifties was incredible for Germany. For an 395 00:22:31,000 --> 00:22:33,639 Speaker 1: investment is coming in. The government has focused on economic 396 00:22:33,760 --> 00:22:37,480 Speaker 1: growth and Germany is catching up to its richer neighbors. 397 00:22:37,560 --> 00:22:41,680 Speaker 1: In that one decade, living standards for Germans doubled. It 398 00:22:41,800 --> 00:22:45,800 Speaker 1: was this incredible economic era and the Beetle was really 399 00:22:45,880 --> 00:22:48,679 Speaker 1: at the center of it. I mean, you know, sales 400 00:22:48,720 --> 00:22:51,600 Speaker 1: were growing, but also as a symbol, Volkswagen was like, 401 00:22:51,720 --> 00:22:54,879 Speaker 1: you know, the national car maker, and the Beatle was 402 00:22:55,000 --> 00:22:57,639 Speaker 1: like like the chrome ornament on the hood of the 403 00:22:57,760 --> 00:23:03,199 Speaker 1: vert shaft wunder and by nineteen fifty five Volkswagen had 404 00:23:03,240 --> 00:23:07,040 Speaker 1: produced one million Beatles. So nord Off is still running 405 00:23:07,080 --> 00:23:09,800 Speaker 1: the company and he wants to, you know, keep this going. 406 00:23:09,880 --> 00:23:12,280 Speaker 1: He wants to keep growing, and so he come up 407 00:23:12,320 --> 00:23:16,600 Speaker 1: with a plan, a plan that specifically has three let's 408 00:23:16,640 --> 00:23:19,480 Speaker 1: call them prongs. Did he call them prize has no idea, 409 00:23:19,880 --> 00:23:22,040 Speaker 1: but let me do the prongs. I'm a good conger. 410 00:23:22,080 --> 00:23:26,800 Speaker 3: Okay, okay, Prong number one, Prong number one domestic sales. 411 00:23:27,080 --> 00:23:30,119 Speaker 3: So in Germany, remember this was not a big driving 412 00:23:30,200 --> 00:23:33,000 Speaker 3: culture before the war, so Nordiff really has to change 413 00:23:33,040 --> 00:23:35,360 Speaker 3: the idea of what it means to own a car. 414 00:23:35,520 --> 00:23:37,879 Speaker 3: This is not a luxury thing. This is something that 415 00:23:38,080 --> 00:23:40,840 Speaker 3: everyone needs and has to have. It's like a TV 416 00:23:41,320 --> 00:23:43,119 Speaker 3: or refrigerator. If you live in the modern world, you 417 00:23:43,280 --> 00:23:46,520 Speaker 3: have to have a car, which of course was Hitler's 418 00:23:46,640 --> 00:23:49,639 Speaker 3: original dream. We should know here he never made very 419 00:23:49,680 --> 00:23:53,000 Speaker 3: many of those cars under Hitler, right, So the way 420 00:23:53,080 --> 00:23:56,080 Speaker 3: to do that is to essentially make the car cheaper. 421 00:23:56,240 --> 00:23:58,919 Speaker 3: In the nineteen fifties, the beetle cost what a typical 422 00:23:59,000 --> 00:24:02,640 Speaker 3: worker would make in thirteen months. So that's the equivalent 423 00:24:02,680 --> 00:24:05,080 Speaker 3: of like a sixty five thousand dollars car now, so 424 00:24:05,160 --> 00:24:06,600 Speaker 3: that's pretty expensive. 425 00:24:06,680 --> 00:24:07,280 Speaker 1: That's not cheap. 426 00:24:07,680 --> 00:24:09,560 Speaker 3: At the end of the decade he had gotten down 427 00:24:09,880 --> 00:24:12,320 Speaker 3: the cost of the car to about eight months salary 428 00:24:12,680 --> 00:24:15,680 Speaker 3: for a typical worker. So that's progress, right. And on 429 00:24:15,760 --> 00:24:17,520 Speaker 3: top of that something we're going to see a lot 430 00:24:18,240 --> 00:24:22,800 Speaker 3: in business history. Volkswagen creates a financing arm that essentially 431 00:24:22,920 --> 00:24:25,240 Speaker 3: can lend people the money to buy the car, so 432 00:24:25,400 --> 00:24:28,720 Speaker 3: they can get into the car for relatively. 433 00:24:28,320 --> 00:24:30,000 Speaker 1: Cheap and pay it off over time. And there was 434 00:24:30,080 --> 00:24:34,639 Speaker 1: also this plan where several people could buy a car 435 00:24:34,840 --> 00:24:36,840 Speaker 1: and share it, which I love. It feels very West 436 00:24:37,000 --> 00:24:39,000 Speaker 1: European to be in a nice way. Why don't we 437 00:24:39,119 --> 00:24:41,480 Speaker 1: do that and do that? I would do that. So 438 00:24:41,560 --> 00:24:44,200 Speaker 1: all these things are happening, Beetles are like, I don't know, 439 00:24:44,320 --> 00:24:47,080 Speaker 1: a third or so thirty forty percent of the cars 440 00:24:47,240 --> 00:24:49,120 Speaker 1: on the road in Germany at this point. 441 00:24:49,760 --> 00:24:51,879 Speaker 3: That is Prong one, as you said, sort of the 442 00:24:52,000 --> 00:24:55,440 Speaker 3: core of Germany's economic miracle is not building stuff for Germans, 443 00:24:55,520 --> 00:24:57,920 Speaker 3: but it's building stuff that people in the rest of 444 00:24:57,960 --> 00:24:58,920 Speaker 3: the world are going to buy. 445 00:24:59,119 --> 00:25:01,960 Speaker 1: And that is where prongs two and three come in. 446 00:25:02,640 --> 00:25:07,080 Speaker 3: Prong two pitch the Beetle as a rugged car for 447 00:25:07,240 --> 00:25:10,200 Speaker 3: the developing world, very very smart. 448 00:25:10,640 --> 00:25:13,280 Speaker 1: Yeah, and I mean it was built as a rugged car. 449 00:25:13,440 --> 00:25:16,119 Speaker 1: It was, you know, used by the military. It was, 450 00:25:16,200 --> 00:25:18,040 Speaker 1: in fact a rugged car. It was a car that 451 00:25:18,280 --> 00:25:20,560 Speaker 1: was easy to work on. There were big parts of 452 00:25:20,600 --> 00:25:22,399 Speaker 1: the developing world, of course, at this point in the 453 00:25:22,480 --> 00:25:25,160 Speaker 1: nineteen fifties, where the roads were bad, where there weren't 454 00:25:25,240 --> 00:25:29,640 Speaker 1: very many mechanics, and so Volkswagen actually builds a factory 455 00:25:29,840 --> 00:25:33,000 Speaker 1: in Brazil that winds up cranking out cars for Latin America. 456 00:25:33,160 --> 00:25:35,200 Speaker 1: And you know, the Beetle is fuel a vision, it 457 00:25:35,400 --> 00:25:37,480 Speaker 1: is rugged, it is easy to work on, becomes a 458 00:25:37,560 --> 00:25:39,400 Speaker 1: very popular car in the developing world. Yeah. 459 00:25:39,400 --> 00:25:41,520 Speaker 3: You could open the trunk and the engine is right there. 460 00:25:41,560 --> 00:25:42,960 Speaker 3: You don't have to lean over it or get under 461 00:25:42,960 --> 00:25:45,120 Speaker 3: the car. You can fix everything right away, which comes 462 00:25:45,200 --> 00:25:47,080 Speaker 3: in useful if you're on the Pan American Highway. 463 00:25:47,240 --> 00:25:49,639 Speaker 1: Prong three, Prong three, Prong three was. 464 00:25:51,119 --> 00:25:53,720 Speaker 3: And this is the hard one. Sell the Beetle to 465 00:25:54,080 --> 00:25:58,120 Speaker 3: rich countries, and one rich country in particular, the one 466 00:25:58,160 --> 00:26:00,680 Speaker 3: that kicked your ass in World War two and is 467 00:26:00,760 --> 00:26:03,000 Speaker 3: the biggest car country in the world. 468 00:26:03,119 --> 00:26:05,280 Speaker 1: Right referring to of course, to the United States of America. 469 00:26:05,760 --> 00:26:10,320 Speaker 3: And this is tough, right, because America had invented mass 470 00:26:10,440 --> 00:26:13,280 Speaker 3: barcating of cars. They have at this point, but probably 471 00:26:13,440 --> 00:26:17,639 Speaker 3: at least the three big car manufacturers in Detroit churning 472 00:26:17,680 --> 00:26:18,320 Speaker 3: out cars. 473 00:26:18,640 --> 00:26:22,040 Speaker 1: They do not need another car in America. Yeah. There 474 00:26:22,119 --> 00:26:25,960 Speaker 1: was a German executive around this time who said selling 475 00:26:26,080 --> 00:26:29,919 Speaker 1: Volkswagens to America would be like trying to sell American 476 00:26:30,080 --> 00:26:33,560 Speaker 1: beer in Bavaria. Like, they don't want what you're selling. 477 00:26:33,800 --> 00:26:36,040 Speaker 1: They don't need what you're selling. They got it already. 478 00:26:36,320 --> 00:26:39,560 Speaker 3: Yeah, and especially if your car is associated with Adolf Hitler, 479 00:26:39,720 --> 00:26:41,120 Speaker 3: it seems like it's not going to work. 480 00:26:41,320 --> 00:26:44,000 Speaker 1: But of course it did in a very delightful way. 481 00:26:44,560 --> 00:27:11,199 Speaker 1: We'll talk about that after the act and we are 482 00:27:11,320 --> 00:27:13,840 Speaker 1: back from the app So let's talk about the cars 483 00:27:14,000 --> 00:27:16,879 Speaker 1: Americans are buying in the late nineteen fifties. 484 00:27:17,000 --> 00:27:19,720 Speaker 3: If you were shopping for a car, you wanted a 485 00:27:19,800 --> 00:27:23,439 Speaker 3: car that was big, a big slab of car, boat 486 00:27:23,520 --> 00:27:28,240 Speaker 3: of car, a big, heavy rectangle to impress your neighbors. 487 00:27:28,440 --> 00:27:30,600 Speaker 1: Maybe it had a lot of chrome. It probably had 488 00:27:30,680 --> 00:27:31,440 Speaker 1: tail fins. 489 00:27:31,280 --> 00:27:35,200 Speaker 3: Oh, absolutely, big hood ornament, shiny hubcaps. 490 00:27:34,760 --> 00:27:39,280 Speaker 1: And almost certainly that car was made in America. So 491 00:27:39,560 --> 00:27:42,960 Speaker 1: in every way we're talking about the opposite of the 492 00:27:43,080 --> 00:27:47,040 Speaker 1: Volkswagen Beetle, which is small, round and made in Germany. 493 00:27:48,320 --> 00:27:49,959 Speaker 3: But you put it that way, it's just funny, right. 494 00:27:50,040 --> 00:27:51,680 Speaker 3: You could picture it as a quaint thing you see 495 00:27:51,680 --> 00:27:52,879 Speaker 3: in the Netherlands. 496 00:27:52,520 --> 00:27:55,360 Speaker 1: Yeah, like on some little stone street. But in Dallas, Texas. 497 00:27:55,680 --> 00:27:58,120 Speaker 1: On Dallas, Texas, it's going to get run over by 498 00:27:58,160 --> 00:27:59,920 Speaker 1: a Chevrolet like a little bug. 499 00:28:00,960 --> 00:28:04,719 Speaker 3: And at the time Americans were really the way they 500 00:28:04,760 --> 00:28:08,200 Speaker 3: were shopping between cars was by looking at their amenities 501 00:28:08,240 --> 00:28:10,280 Speaker 3: and their upgrades. Right, Oh, does it have the new 502 00:28:10,400 --> 00:28:13,800 Speaker 3: air conditioning? Does it have a electric reclining seats? I mean, 503 00:28:13,920 --> 00:28:17,560 Speaker 3: this is the height of luxury. And Jacob, you've put 504 00:28:17,600 --> 00:28:21,000 Speaker 3: a picture in here of the dashboard of a Volkswagen 505 00:28:21,200 --> 00:28:24,000 Speaker 3: from around this time. What I love about it is 506 00:28:24,040 --> 00:28:29,399 Speaker 3: the upgrade it has is the Bluemen vasin. It is 507 00:28:29,640 --> 00:28:34,800 Speaker 3: a ceramic vase. It looks to be bolted to bolted 508 00:28:34,880 --> 00:28:38,640 Speaker 3: right next to the radio on the dashboard. And in 509 00:28:38,720 --> 00:28:41,760 Speaker 3: this picture there's three lovely I don't know, Adleweiss or 510 00:28:41,800 --> 00:28:42,440 Speaker 3: something in there. 511 00:28:42,520 --> 00:28:46,160 Speaker 1: Fresh flowers. There are fresh cut flowers in this German 512 00:28:46,320 --> 00:28:51,120 Speaker 1: porcelain vase that is an optional extra, right, and it's 513 00:28:51,240 --> 00:28:54,720 Speaker 1: perfect right. Put this little car with this little vase 514 00:28:54,840 --> 00:28:58,960 Speaker 1: with the little flowers next to the giant Ford or 515 00:28:59,200 --> 00:29:02,120 Speaker 1: Chevy with its electric seats and air conditioning, and it 516 00:29:02,320 --> 00:29:06,840 Speaker 1: just looks like a joke. And this is how American 517 00:29:07,000 --> 00:29:10,520 Speaker 1: auto executives saw this car as a joke that they 518 00:29:10,560 --> 00:29:15,080 Speaker 1: didn't care about because it's ridiculous. And this again, as 519 00:29:15,280 --> 00:29:18,800 Speaker 1: with the poorly functioning factory in the mid forties, this 520 00:29:18,960 --> 00:29:22,400 Speaker 1: again is a weird kind of lucky break for Volkswagen 521 00:29:22,600 --> 00:29:27,160 Speaker 1: because since the executives don't take the car seriously, they're 522 00:29:27,240 --> 00:29:29,640 Speaker 1: not worried about it as a threat. They're not demanding 523 00:29:30,120 --> 00:29:32,760 Speaker 1: tariff protection against it. They're like, sure, you want to 524 00:29:32,840 --> 00:29:35,360 Speaker 1: sell your cute little car to twelve people in America, 525 00:29:35,800 --> 00:29:39,040 Speaker 1: go ahead, And that is in fact what happens. But 526 00:29:39,200 --> 00:29:43,040 Speaker 1: initially it is a truly tiny percentage, as in less 527 00:29:43,200 --> 00:29:48,520 Speaker 1: than one percent. But that tiny number of people, I guess, 528 00:29:48,640 --> 00:29:51,360 Speaker 1: as with you know, sort of classic early adopter. Maybe 529 00:29:52,000 --> 00:29:56,560 Speaker 1: they love their Volkswagons, right, they feel like they have 530 00:29:56,720 --> 00:30:00,600 Speaker 1: discovered this special, different car. 531 00:30:01,280 --> 00:30:05,080 Speaker 3: And this came at a very particular moment in American history, 532 00:30:05,080 --> 00:30:08,280 Speaker 3: which is lucky for Volkswagen. Right, Americans are getting rich. 533 00:30:08,320 --> 00:30:10,920 Speaker 3: It's the nineteen fifties, right, they won the war. Things 534 00:30:10,920 --> 00:30:12,920 Speaker 3: are going very well in America, so they have extra 535 00:30:13,000 --> 00:30:16,600 Speaker 3: disposable income. Plus women are starting to go in the workforce, 536 00:30:16,840 --> 00:30:19,600 Speaker 3: so they are looking at having more than one car. 537 00:30:20,520 --> 00:30:22,320 Speaker 1: And if you have your big boat. 538 00:30:22,120 --> 00:30:25,440 Speaker 3: Of car parked outside of your suburban home, why not 539 00:30:25,560 --> 00:30:27,240 Speaker 3: get a little tiny car to go with it. It 540 00:30:27,640 --> 00:30:28,600 Speaker 3: makes total sense. 541 00:30:28,840 --> 00:30:33,560 Speaker 1: Yes, yes, Volkswagen was the second car, and it was 542 00:30:33,680 --> 00:30:37,960 Speaker 1: particularly popular among women. There's this one woman in Ohio 543 00:30:38,080 --> 00:30:42,080 Speaker 1: who's quoted in that excellent Bernard Reager book The People's Car. 544 00:30:42,880 --> 00:30:45,920 Speaker 1: She said her Volkswagen lets me be the boss when 545 00:30:45,960 --> 00:30:46,840 Speaker 1: I'm behind the wheel. 546 00:30:47,400 --> 00:30:49,920 Speaker 3: It might have stayed a novelty car in America until 547 00:30:50,200 --> 00:30:54,680 Speaker 3: something happened in nineteen fifty nine. It was a big, 548 00:30:55,320 --> 00:30:58,800 Speaker 3: big deal in a small, small place. It was a 549 00:30:58,840 --> 00:30:59,440 Speaker 3: magazine ad. 550 00:31:00,360 --> 00:31:03,040 Speaker 1: How amazing. Can we just pause for a moment and say, 551 00:31:03,240 --> 00:31:06,560 Speaker 1: there's an error where a magazine ad ante any thing 552 00:31:06,600 --> 00:31:08,960 Speaker 1: where anything in a magazine was important. I'll take it. 553 00:31:09,080 --> 00:31:10,400 Speaker 1: Have you seen page forty nine? 554 00:31:11,280 --> 00:31:14,800 Speaker 3: So this ad was made by an ad agency called 555 00:31:15,160 --> 00:31:18,280 Speaker 3: Doyle Dane Burnbuck Burnback. 556 00:31:18,040 --> 00:31:20,400 Speaker 1: Was like I think he gets shouted out in Madman. 557 00:31:20,520 --> 00:31:24,200 Speaker 1: He was this guy central to this creative revolution in 558 00:31:24,480 --> 00:31:27,600 Speaker 1: advertising going on around the time where ads are getting 559 00:31:27,640 --> 00:31:31,040 Speaker 1: more interesting and more creative, and this particular ad is 560 00:31:31,960 --> 00:31:35,240 Speaker 1: one of the most famous ads of all time, and 561 00:31:35,560 --> 00:31:39,440 Speaker 1: in part it's famous because it was so different. 562 00:31:39,880 --> 00:31:42,120 Speaker 3: So car ads in the nineteen fifties, if you've ever 563 00:31:42,160 --> 00:31:45,360 Speaker 3: seen them, it's often a guy smoking a cigarette with 564 00:31:45,400 --> 00:31:49,000 Speaker 3: a fedora on right, and maybe he's wearing a tuxedo, 565 00:31:49,120 --> 00:31:50,120 Speaker 3: and there's a beautiful woman in. 566 00:31:50,120 --> 00:31:51,040 Speaker 1: An evening gown. 567 00:31:51,240 --> 00:31:53,680 Speaker 3: It is the height of luxury. It is saying you 568 00:31:53,760 --> 00:31:56,160 Speaker 3: are going to live large in this automobile. Yeah, there's 569 00:31:56,200 --> 00:31:59,760 Speaker 3: a great, big, shiny, full color car, you know, sparkling. 570 00:32:00,240 --> 00:32:03,160 Speaker 3: Let's look at this Beatle ad and just talk about it. Right. 571 00:32:03,280 --> 00:32:06,440 Speaker 1: You look at the ad and the first thing you 572 00:32:06,600 --> 00:32:12,240 Speaker 1: see is nothing like It is mostly empty space. And 573 00:32:12,320 --> 00:32:15,719 Speaker 1: then in the top left corner of the page, really small, 574 00:32:15,920 --> 00:32:17,880 Speaker 1: kind of like off in the back you cover it 575 00:32:17,960 --> 00:32:20,560 Speaker 1: with your thumb, there is a little black and white 576 00:32:20,600 --> 00:32:24,200 Speaker 1: picture of a Volkswagen Beetle, a little photo of a 577 00:32:24,240 --> 00:32:26,920 Speaker 1: little car. And then most of the way down the 578 00:32:26,960 --> 00:32:32,480 Speaker 1: page is the headline think Small, which is hilarious. Yeah, 579 00:32:32,600 --> 00:32:34,520 Speaker 1: at the time, it is hilarious. 580 00:32:34,600 --> 00:32:36,920 Speaker 3: It's all the advertising you've ever seen in your life 581 00:32:37,080 --> 00:32:39,880 Speaker 3: is saying think big, and at this moment someone's saying 582 00:32:39,920 --> 00:32:40,440 Speaker 3: think small. 583 00:32:40,560 --> 00:32:41,960 Speaker 1: And you smile and you read. 584 00:32:42,160 --> 00:32:44,960 Speaker 3: There's a whole bunch of text talking about how great 585 00:32:45,440 --> 00:32:48,240 Speaker 3: this car is, but it's also tiny. Think about the 586 00:32:48,480 --> 00:32:52,800 Speaker 3: time that this ad is hitting, right, nineteen fifty nine. 587 00:32:52,840 --> 00:32:54,480 Speaker 3: What do we think of when we think of the fifties, 588 00:32:54,520 --> 00:32:56,920 Speaker 3: We think of like consumerism, We. 589 00:32:56,960 --> 00:32:59,920 Speaker 1: Think of conformity, man in the gray flannel suit. And 590 00:33:00,040 --> 00:33:03,080 Speaker 1: so the calculation was that there was some number of 591 00:33:03,160 --> 00:33:07,760 Speaker 1: Americans who you know, who were ready for something different, 592 00:33:07,880 --> 00:33:11,400 Speaker 1: who were ready for something that was counter to the culture, 593 00:33:11,800 --> 00:33:15,720 Speaker 1: if you will, perfect in this decade of the nineteen sixties. 594 00:33:15,400 --> 00:33:20,000 Speaker 3: Perfect timing. Teenagers adore this thing. They start to put 595 00:33:20,040 --> 00:33:22,880 Speaker 3: pictures of it, not you know, racing cars on their walls. 596 00:33:22,720 --> 00:33:25,600 Speaker 1: Right, and they actually tear the ad out of whatever 597 00:33:25,760 --> 00:33:27,760 Speaker 1: Life magazine and peanut on their wall. 598 00:33:27,920 --> 00:33:30,080 Speaker 3: The agency has another ad that says, if it runs 599 00:33:30,120 --> 00:33:31,760 Speaker 3: out of gas, it's easy to push. 600 00:33:32,080 --> 00:33:34,840 Speaker 1: That one is really good, right, like it is making 601 00:33:34,960 --> 00:33:37,440 Speaker 1: fun of itself. There's another one that is sort of 602 00:33:37,520 --> 00:33:41,160 Speaker 1: more sly it's a big picture of a beetle, and 603 00:33:41,280 --> 00:33:43,800 Speaker 1: then the headline below it says lemon. 604 00:33:44,160 --> 00:33:47,040 Speaker 3: Yeah, it says lemon, and the car looks like a 605 00:33:47,080 --> 00:33:49,960 Speaker 3: half lemon. So that's funny. But lemon is also a 606 00:33:50,040 --> 00:33:53,120 Speaker 3: slang term for a terrible car, as in that guy 607 00:33:53,240 --> 00:33:54,720 Speaker 3: saw me a lemon. The wheels felm. 608 00:33:54,840 --> 00:33:56,720 Speaker 1: Yes, but so so you think that's what they're saying. 609 00:33:56,760 --> 00:33:59,320 Speaker 1: But then you read the copy below the headline and 610 00:33:59,400 --> 00:34:01,640 Speaker 1: it says, you know, the problem with the car isn't 611 00:34:01,720 --> 00:34:05,680 Speaker 1: a bad engine or unreliable breaks. It's a blemish on 612 00:34:05,800 --> 00:34:10,160 Speaker 1: the chrome trim of the glove compartment, spotted by Inspector 613 00:34:10,279 --> 00:34:15,000 Speaker 1: Kurt Kroner at the Wolfsburg factory. Very very interesting, right. 614 00:34:15,120 --> 00:34:17,479 Speaker 3: It comes off as self deprecating, but when you read 615 00:34:17,520 --> 00:34:21,320 Speaker 3: it it's actually the opposite. It goes through point by point, 616 00:34:21,920 --> 00:34:26,680 Speaker 3: how precise and exacting the engineers a Volkswagen are. It 617 00:34:26,880 --> 00:34:30,040 Speaker 3: ends like this, This preoccupation with detail means that the 618 00:34:30,120 --> 00:34:33,439 Speaker 3: VW lasts longer and requires less maintenance by and large 619 00:34:33,480 --> 00:34:37,360 Speaker 3: than other cars. It also means a used VW depreciates 620 00:34:37,440 --> 00:34:38,640 Speaker 3: less than other cars. 621 00:34:38,800 --> 00:34:41,040 Speaker 1: Right, So here they're not like, oh, you can push 622 00:34:41,080 --> 00:34:43,880 Speaker 1: it or whatever. They're not pitching it as a smaller 623 00:34:44,000 --> 00:34:48,040 Speaker 1: car or a cheaper car. They're pitching a better car, 624 00:34:48,480 --> 00:34:51,440 Speaker 1: a more reliable car, a car that holds its value. 625 00:34:52,000 --> 00:34:54,839 Speaker 1: And I think this is you know, foreshadowing a couple 626 00:34:54,960 --> 00:34:57,760 Speaker 1: things we're going to see more broadly in global business 627 00:34:57,840 --> 00:35:00,320 Speaker 1: in the years to come after this. One is the 628 00:35:00,480 --> 00:35:03,520 Speaker 1: rise of foreign car makers in the US, who are 629 00:35:03,640 --> 00:35:08,200 Speaker 1: going to obviously build reputations for reliable cars. And two, 630 00:35:08,640 --> 00:35:13,840 Speaker 1: even bigger is this global brand that is developing for 631 00:35:14,360 --> 00:35:18,480 Speaker 1: German manufacturing in general. Right, Germany as this world leader 632 00:35:19,080 --> 00:35:23,200 Speaker 1: at building precise, efficient, reliable stuff, which does drive their 633 00:35:23,280 --> 00:35:27,280 Speaker 1: economy through the twentieth century and into the twenty first century. 634 00:35:27,480 --> 00:35:31,560 Speaker 3: And it's essentially saying that American cars and turns out 635 00:35:31,600 --> 00:35:36,160 Speaker 3: all of American industry have not really had competition, uh huh, 636 00:35:36,440 --> 00:35:38,880 Speaker 3: And so they've been on top for so long that 637 00:35:39,040 --> 00:35:41,040 Speaker 3: maybe they're a little bit lazy. 638 00:35:41,200 --> 00:35:44,320 Speaker 1: Dare we say they're cutting corners? And certainly, you know, 639 00:35:44,480 --> 00:35:48,640 Speaker 1: the German economy is going to run on making fancy 640 00:35:48,880 --> 00:35:53,000 Speaker 1: complicated machines cars, but also like big machinery that builds 641 00:35:53,040 --> 00:35:55,600 Speaker 1: other machines and selling it to the rest of the world. 642 00:35:55,680 --> 00:35:58,080 Speaker 1: Like they are in fact great at that. 643 00:35:58,560 --> 00:36:00,800 Speaker 3: You know. I was talking to a professor who a 644 00:36:00,960 --> 00:36:04,560 Speaker 3: historian who studies the car industry, and I was talking 645 00:36:04,560 --> 00:36:08,680 Speaker 3: about the amazement that the Germans and the Japanese in 646 00:36:08,800 --> 00:36:13,160 Speaker 3: this era, the people whose countries were destroyed, the losers 647 00:36:13,239 --> 00:36:17,040 Speaker 3: of the war, end up having this huge dominance in 648 00:36:17,120 --> 00:36:20,160 Speaker 3: imported vehicles over the sixties and seventies. And he said, 649 00:36:20,200 --> 00:36:23,160 Speaker 3: one of the reasons is that the American factories at 650 00:36:23,200 --> 00:36:27,680 Speaker 3: this point were thirty forty years old, and even though 651 00:36:27,680 --> 00:36:30,719 Speaker 3: they had to rebuild them from scratch, the Japanese and 652 00:36:30,880 --> 00:36:36,880 Speaker 3: German factories could put more modern techniques, modern machines. You know, 653 00:36:37,040 --> 00:36:40,759 Speaker 3: it's a brand new factory, and so could actually put 654 00:36:40,800 --> 00:36:43,600 Speaker 3: out a product that was better than the old Detroit plants. 655 00:36:44,040 --> 00:36:48,960 Speaker 1: I buy it. It's interesting, and for purposes of our story, 656 00:36:49,560 --> 00:36:52,400 Speaker 1: it means that the beetle, with the push of this 657 00:36:53,320 --> 00:36:57,759 Speaker 1: ad campaign takes off in the US. Sales go from 658 00:36:57,880 --> 00:37:00,200 Speaker 1: one hundred thousand a year to one hundred and fifty 659 00:37:00,239 --> 00:37:05,560 Speaker 1: thousand to two hundred thousand. Surfers are driving them, Teachers, moms, hippies. 660 00:37:05,600 --> 00:37:09,960 Speaker 1: Of course, people start having beetle races. And this is 661 00:37:10,080 --> 00:37:12,880 Speaker 1: how we get to that moment we talked about at 662 00:37:12,920 --> 00:37:15,800 Speaker 1: the beginning of the last episode. That moment in the 663 00:37:15,920 --> 00:37:19,960 Speaker 1: late nineteen sixties when Disney is testing cars for a 664 00:37:20,120 --> 00:37:21,080 Speaker 1: racing movie, and. 665 00:37:21,160 --> 00:37:24,000 Speaker 3: Remember they park all these different cars outside the commissary 666 00:37:24,160 --> 00:37:27,520 Speaker 3: on the lot and have the people who work at 667 00:37:27,560 --> 00:37:30,400 Speaker 3: the studio walk around and just like try out the cars, 668 00:37:30,480 --> 00:37:33,200 Speaker 3: open the doors, sit behind the wheel. And what they 669 00:37:33,320 --> 00:37:36,680 Speaker 3: notice is that when people see the Volkswagen Beetle they 670 00:37:36,840 --> 00:37:41,640 Speaker 3: do something unusual. They pet the car, a little petting 671 00:37:41,719 --> 00:37:44,120 Speaker 3: of the car like it's like it's a cute puppy. 672 00:37:43,920 --> 00:37:46,879 Speaker 1: Or an animal. They were gonna call the movie car 673 00:37:47,280 --> 00:37:51,480 Speaker 1: Boy Girl, but people loved the Volkswagen so much that 674 00:37:51,600 --> 00:37:55,279 Speaker 1: they wound up calling the movie the love Bug. The 675 00:37:55,320 --> 00:37:57,200 Speaker 1: Beatle in the movie had a name. It was Herbie. 676 00:37:57,680 --> 00:38:00,520 Speaker 1: Watched it when I was a kid, and kind of amazingly, 677 00:38:01,239 --> 00:38:05,080 Speaker 1: when Disney goes to Volkswagen is like, great news, We're 678 00:38:05,120 --> 00:38:08,320 Speaker 1: gonna make your car the star of a movie. The 679 00:38:08,400 --> 00:38:11,480 Speaker 1: executives are like, hmm, will this car in the movie 680 00:38:11,520 --> 00:38:14,279 Speaker 1: It's gonna be like sentient and have a mind of 681 00:38:14,360 --> 00:38:16,320 Speaker 1: its own and drive around San Francisco. 682 00:38:17,200 --> 00:38:20,759 Speaker 3: Will that make people think Beatles are unreliable? We're not 683 00:38:20,880 --> 00:38:21,759 Speaker 3: so sure about this. 684 00:38:21,920 --> 00:38:27,320 Speaker 1: Or aggressive or aggressive And actually, if you watch the movie, 685 00:38:27,960 --> 00:38:30,279 Speaker 1: of course it is a Beetle, but nowhere in the 686 00:38:30,400 --> 00:38:32,839 Speaker 1: film is they're referred to as a Volkswagen. 687 00:38:34,600 --> 00:38:36,279 Speaker 3: And yet it is a big, long commercial. That's what 688 00:38:36,320 --> 00:38:38,120 Speaker 3: the New York Times pointed out in their review of 689 00:38:38,200 --> 00:38:38,560 Speaker 3: the film. 690 00:38:38,680 --> 00:38:42,719 Speaker 1: Yes, and it was a hit. They were sequels and reboots. 691 00:38:42,840 --> 00:38:47,080 Speaker 1: Shout out Herbiego's Bananas. And in nineteen sixty eight, the 692 00:38:47,239 --> 00:38:52,400 Speaker 1: year that The Lovebug premiered, three hundred and ninety nine thousand, 693 00:38:52,680 --> 00:38:55,719 Speaker 1: six hundred and seventy four Beatles were sold in the US. 694 00:38:56,400 --> 00:38:57,480 Speaker 1: And this was it. 695 00:38:57,640 --> 00:39:01,799 Speaker 3: This was actually peak Beetle, not necessarily because of any 696 00:39:02,360 --> 00:39:04,719 Speaker 3: problem with the Beatle. But there were other foreign cars 697 00:39:04,800 --> 00:39:09,800 Speaker 3: now who are following Volkswagon's lead, specifically, Toyotas and Hondas 698 00:39:10,040 --> 00:39:12,480 Speaker 3: were coming in by the boatload. At this they had 699 00:39:12,680 --> 00:39:16,720 Speaker 3: entire ships that could carry four five thousand cars, unloading 700 00:39:16,760 --> 00:39:19,360 Speaker 3: them in California and just rolling them off right, And 701 00:39:19,480 --> 00:39:22,360 Speaker 3: the Beetle did still have life left in it. In 702 00:39:22,520 --> 00:39:28,000 Speaker 3: nineteen seventy two, the fifteen millionth seven thousandth and thirty 703 00:39:28,080 --> 00:39:32,080 Speaker 3: fourth Beetle rolled off the production line. Beating the record 704 00:39:32,200 --> 00:39:36,000 Speaker 3: set by the model t Ford for the best selling 705 00:39:36,040 --> 00:39:36,640 Speaker 3: car of all time. 706 00:39:36,800 --> 00:39:39,880 Speaker 1: And I will note sometimes people say the Toyota Corolla 707 00:39:40,000 --> 00:39:41,920 Speaker 1: is the best selling car of all time, But the 708 00:39:41,960 --> 00:39:44,640 Speaker 1: trick is it's not the same car. Toyota has been 709 00:39:44,719 --> 00:39:47,239 Speaker 1: making a car called the Corolla for decades. But if 710 00:39:47,280 --> 00:39:49,400 Speaker 1: you look at a Corolla today and look at a 711 00:39:49,480 --> 00:39:52,319 Speaker 1: Corolla twenty five years ago, they look nothing the same. 712 00:39:52,560 --> 00:39:55,239 Speaker 1: The amazing thing about the Beetle is if you look 713 00:39:55,320 --> 00:39:58,360 Speaker 1: at the Beetle that Ferdinand Porsche designed in the nineteen 714 00:39:58,400 --> 00:40:00,120 Speaker 1: thirties and the one that came off the line in 715 00:40:00,200 --> 00:40:03,520 Speaker 1: nineteen seventy two, they look basically the same. 716 00:40:03,840 --> 00:40:07,400 Speaker 3: The last final Beetle rolled off the production line in 717 00:40:07,520 --> 00:40:11,879 Speaker 3: Mexico in July of two thousand and three, seventy years 718 00:40:12,480 --> 00:40:14,960 Speaker 3: after Hitler started to rant about a people's car. 719 00:40:15,160 --> 00:40:20,280 Speaker 1: Seventy years. Yeah, they made more than twenty one million 720 00:40:20,360 --> 00:40:24,440 Speaker 1: Beatles over the course of that time. And by the way, 721 00:40:25,239 --> 00:40:28,440 Speaker 1: do you know who was the chairman of Volkswagen in 722 00:40:28,600 --> 00:40:30,839 Speaker 1: two thousand and three when that last Beatle came off 723 00:40:30,880 --> 00:40:33,080 Speaker 1: the line. I know, but I can't pronounce his name, 724 00:40:33,719 --> 00:40:38,120 Speaker 1: Ferdinand Pierre. I can't either, who was the son of 725 00:40:38,560 --> 00:40:43,279 Speaker 1: Anton Pierre and the grandson of Fernand Porsche. So that's 726 00:40:43,360 --> 00:40:45,359 Speaker 1: the end of the Beatles story, right, best selling car 727 00:40:45,400 --> 00:40:48,640 Speaker 1: of all time, dreamed up by Hitler, beloved of hippies 728 00:40:48,719 --> 00:40:50,920 Speaker 1: and people around the world. We've talked about it for 729 00:40:51,000 --> 00:40:53,560 Speaker 1: two episodes, and like, I'm curious, Robert, like, when you 730 00:40:53,640 --> 00:40:56,759 Speaker 1: step back, where's this sort of land for you? What 731 00:40:56,840 --> 00:40:57,360 Speaker 1: are you left with? 732 00:40:57,600 --> 00:41:00,279 Speaker 3: So two things come to mind. The first one is 733 00:41:00,320 --> 00:41:03,600 Speaker 3: about the design of the Beatle. When we looked at 734 00:41:03,640 --> 00:41:06,759 Speaker 3: that first picture of Adolf Hitler looking at the very 735 00:41:06,920 --> 00:41:10,480 Speaker 3: first model of the car, before they'd built a single one, 736 00:41:10,960 --> 00:41:14,400 Speaker 3: it looked almost identical to the car we see today. 737 00:41:14,760 --> 00:41:17,360 Speaker 3: There was something about it, a beauty about it that 738 00:41:17,560 --> 00:41:20,560 Speaker 3: survived for seventy years and made the car successful. 739 00:41:20,600 --> 00:41:22,080 Speaker 1: Okay, so that's one. What's the other one? 740 00:41:22,360 --> 00:41:26,840 Speaker 3: And the other one is about resiliency. Think about Germany 741 00:41:27,000 --> 00:41:31,239 Speaker 3: after the war. There's probably rarely been a country that 742 00:41:31,440 --> 00:41:35,640 Speaker 3: is as devastated as Germany was after World War Two, 743 00:41:36,200 --> 00:41:39,800 Speaker 3: and then this German economic miracle is happening within twenty years, 744 00:41:40,280 --> 00:41:42,799 Speaker 3: and so in some ways, I'm like, there is an 745 00:41:42,840 --> 00:41:48,600 Speaker 3: amazement that when a country has nothing using some wise decisions, 746 00:41:48,719 --> 00:41:51,960 Speaker 3: good economics, world trade that we talked grows the pie. 747 00:41:52,360 --> 00:41:56,279 Speaker 3: You can actually make a country like rapidly improved. I 748 00:41:56,320 --> 00:41:59,280 Speaker 3: mean it's It is an inspiring story for any country 749 00:41:59,320 --> 00:42:01,799 Speaker 3: that's facing any sort of difficulty, like if Germany can 750 00:42:01,880 --> 00:42:03,680 Speaker 3: do it, other countries can. 751 00:42:03,600 --> 00:42:05,880 Speaker 1: Do it too. I love it. It's a story that 752 00:42:06,080 --> 00:42:08,960 Speaker 1: starts with Hitler and has a happy ending. I'll take it. 753 00:42:09,520 --> 00:42:12,800 Speaker 3: Our producer is Gabriel Hunter chang Or engineer Sarah Bruguier, 754 00:42:13,280 --> 00:42:16,320 Speaker 3: and our showrunner is Ryan Dilly. I'm Jacob Goldstein, and 755 00:42:16,360 --> 00:42:18,399 Speaker 3: I'm Robert Smith. We'll be back next week with another 756 00:42:18,440 --> 00:42:19,640 Speaker 3: episode of Business 757 00:42:20,000 --> 00:42:25,279 Speaker 1: History, a show about the history wait for it, of 758 00:42:25,440 --> 00:42:25,840 Speaker 1: business