WEBVTT - Volkswagen Today 0:00:04.240 --> 0:00:07.240 Welcome to tech Stuff, a production of I Heart Radios 0:00:07.320 --> 0:00:14.080 How Stuff Works. Hey there, and welcome to tech Stuff. 0:00:14.120 --> 0:00:17.279 I'm your host, Jonathan Strickland. I'm an executive producer with 0:00:17.320 --> 0:00:20.600 I Heart Radio and I love all things tech. And 0:00:20.680 --> 0:00:24.880 we are continuing with our story about Volkswagen. And in 0:00:24.920 --> 0:00:29.120 our last episode, we made our way up to ninety 0:00:29.280 --> 0:00:32.920 two when Dr Carl hand, the former head of Volkswagen 0:00:32.960 --> 0:00:38.320 America and the person whom former CEO Heinrich Nordhoff had 0:00:38.520 --> 0:00:41.560 handpicked way back in the nineteen sixties to be the 0:00:41.680 --> 0:00:45.640 leader of the company, would actually fulfill that vision. In 0:00:45.720 --> 0:00:49.080 the interim, Volkswagen had leaders who had pushed the company 0:00:49.080 --> 0:00:53.040 beyond its dependence upon the Type one car. Type one 0:00:53.159 --> 0:00:56.959 is what we in America called the Volkswagen Beatle. Now, 0:00:56.960 --> 0:01:01.800 in fact, Volkswagen's manufacturing facilities in Germany had already stopped 0:01:01.880 --> 0:01:06.840 producing the Beatle by early nineteen eighty. The original plan 0:01:06.920 --> 0:01:09.360 was to stop in nineteen seventy nine, but as they 0:01:09.400 --> 0:01:12.960 were getting towards the end of the year, they realized 0:01:13.000 --> 0:01:16.200 that they had way too many orders to fill. They 0:01:16.200 --> 0:01:19.319 had to actually keep going, keep producing beyond when they 0:01:19.319 --> 0:01:21.440 had planned to stop, in order to meet those demands 0:01:22.120 --> 0:01:25.280 and to keep building that reliable little car. By mid 0:01:25.400 --> 0:01:28.800 nineteen eighty, that had changed and production had shifted to 0:01:29.040 --> 0:01:32.600 Volkswagen's facilities in Brazil and Mexico, so the Beetle was 0:01:32.600 --> 0:01:34.679 still being produced there, but was no longer being produced 0:01:34.720 --> 0:01:37.759 in Germany. While the company made far fewer of the 0:01:37.800 --> 0:01:41.720 Type one vehicles, the facility in Puebla, Mexico churned them 0:01:41.760 --> 0:01:45.920 out all the way up until two thousand three. That 0:01:45.959 --> 0:01:49.920 means Volkswagen was making the Type one air cooled rear 0:01:49.960 --> 0:01:55.360 engine Volkswagen Beetle for nearly sixty years without an eruption. 0:01:56.160 --> 0:01:59.920 In Mexico, the car became a popular option for tack 0:02:00.000 --> 0:02:04.120 sea drivers because the vehicles were small, they had good traction, 0:02:04.600 --> 0:02:06.960 and they were easy to maintain due to their simple 0:02:06.960 --> 0:02:12.960 mechanical structure. Eventually, in the Mexican government outlawed the Beatle 0:02:13.320 --> 0:02:17.640 as a taxi cab car, deeming it too unsafe for 0:02:17.680 --> 0:02:21.480 that purpose. Oh and before I move on, I should 0:02:21.520 --> 0:02:25.840 at least mention that Volkswagen began making the Jetta model 0:02:25.960 --> 0:02:29.320 of vehicles starting in nineteen seventy nine. The design of 0:02:29.360 --> 0:02:32.520 the Jetta aimed at a customer that wanted something a 0:02:32.520 --> 0:02:36.000 bit larger than the Volkswagen Golf known as the Rabbit 0:02:36.160 --> 0:02:38.799 here in the United States, and the Jetta is one 0:02:38.800 --> 0:02:42.359 of the models Volkswagen still produces today and is consistently 0:02:42.440 --> 0:02:45.760 one of their more popular models. It also comes in 0:02:45.840 --> 0:02:49.720 a lot of different configurations. Two door, four door, five door. 0:02:50.240 --> 0:02:52.720 I had to mention it because my producer Tari used 0:02:52.760 --> 0:02:55.440 to drive one, though she drove a more recent model 0:02:55.520 --> 0:02:58.680 than in nineteen seventy nine Jetta. I imagine she's nodding 0:02:58.800 --> 0:03:02.360 yes in case he can't hear her nod. But let's 0:03:02.400 --> 0:03:06.200 talk about Volkswagen the company from the time Doctor Han 0:03:06.320 --> 0:03:10.080 took over up to present day now. One measure that 0:03:10.160 --> 0:03:14.079 Han took was to work with China to establish Volkswagen's 0:03:14.120 --> 0:03:19.200 presence in the vast Chinese market. In the early nineteen eighties, 0:03:19.520 --> 0:03:24.320 China was just starting to enter into a massive economic transformation, 0:03:24.680 --> 0:03:28.160 one that we're still seeing play out today. Volkswagen would 0:03:28.200 --> 0:03:30.839 be one of the first Western automotive companies to work 0:03:30.840 --> 0:03:35.000 with China. In fact, it was the first Western automotive 0:03:35.000 --> 0:03:38.080 company to work with China to create an early automobile 0:03:38.120 --> 0:03:41.240 industry in that nation. It would be incredibly important both 0:03:41.280 --> 0:03:44.800 to China and to Volkswagen itself. After all, China has 0:03:44.880 --> 0:03:48.240 the largest population of any country in the world, and 0:03:48.280 --> 0:03:52.080 for several years Volkswagen was the only non Chinese car 0:03:52.160 --> 0:03:55.400 company operating within that country, and as you might imagine, 0:03:55.400 --> 0:03:58.000 that meant Volkswagen was able to get a big jump 0:03:58.360 --> 0:04:01.960 on top of the other car company. Today, Volkswagen and 0:04:02.000 --> 0:04:05.320 its partners manufactured vehicles and parts in more than thirty 0:04:05.360 --> 0:04:11.080 manufacturing facilities throughout China. Dr Hahn also continued Volkswagen's practice 0:04:11.120 --> 0:04:15.240 of acquiring other companies, and acquisitions are going to play 0:04:15.280 --> 0:04:18.720 a really big part in today's episode as well. Here later, 0:04:19.400 --> 0:04:22.360 but he oversaw the completion of Volkswagen's acquisition of fift 0:04:23.440 --> 0:04:27.120 of the Spanish car company Seat in nineteen eight six, 0:04:27.440 --> 0:04:31.600 as well as gaining a substantial stake in a check 0:04:31.800 --> 0:04:36.400 company called Skota in nineteen These two companies would be 0:04:36.440 --> 0:04:40.880 the first non German subsidiaries for Volkswagen. The first subsidiary, 0:04:40.920 --> 0:04:43.440 if you remember from the last episode, was Audi that 0:04:43.560 --> 0:04:47.760 was another German car company, though Volkswagen would later acquire 0:04:47.880 --> 0:04:51.359 more ownership of both car companies, eventually owning both outright, 0:04:51.760 --> 0:04:55.080 and Volkswagen would become a leading car company in Europe, 0:04:55.279 --> 0:05:00.920 particularly in the southern and Eastern European markets. The subsidiaries 0:05:00.960 --> 0:05:04.120 make talking about Volkswagen a little tricky, as there's the 0:05:04.200 --> 0:05:08.880 Volkswagen Group that includes all the companies and brands like Audi, 0:05:08.960 --> 0:05:12.920 in addition to Volkswagen the car company, which is specifically 0:05:12.960 --> 0:05:16.520 the company that makes branded Volkswagen vehicles like the Beatle. 0:05:17.200 --> 0:05:21.000 While Volkswagen was growing through these acquisitions, it was also 0:05:21.040 --> 0:05:23.640 in some ways following a plan very similar to what 0:05:23.839 --> 0:05:26.159 had been the cornerstone for the company during much of 0:05:26.160 --> 0:05:29.880 its history. So for decades, the Beatle had been the 0:05:29.920 --> 0:05:34.840 primary product from Volkswagen. While Volkswagen was finally retiring the 0:05:34.839 --> 0:05:39.280 Beatle in this time, it was essentially doing the same thing. 0:05:39.360 --> 0:05:42.960 It was following the same play with a different sensible car, 0:05:43.040 --> 0:05:45.960 which would be the Golf. It's not incorrect to say 0:05:45.960 --> 0:05:49.320 the Golf was intended for the same type of consumer 0:05:49.360 --> 0:05:52.960 who previously would have purchased a Beatle, but Han recognized 0:05:53.000 --> 0:05:55.680 that the strategy alone would not be enough to sustain 0:05:55.720 --> 0:05:58.800 the company, and in fact, it was depending too heavily 0:05:58.839 --> 0:06:01.200 upon any one veha a model is a recipe for 0:06:01.240 --> 0:06:05.119 potential disaster if markets should change. With that in mind, 0:06:05.480 --> 0:06:08.760 Han gave more freedom to the Audi division. Now, this 0:06:08.839 --> 0:06:11.320 really isn't an episode about Aldi, so I don't want 0:06:11.320 --> 0:06:14.640 to get too far off track here, but it would 0:06:14.680 --> 0:06:17.039 mean that the Audi brand was given a bit more 0:06:17.120 --> 0:06:20.320 slack to develop cars for a higher end market than 0:06:20.440 --> 0:06:24.559 Volkswagen's Golf catered to. And it would give Audi the 0:06:24.560 --> 0:06:31.279 the the freedom to start experimenting more and uh really 0:06:31.720 --> 0:06:34.440 branching out from what it had been doing. Breaking free 0:06:35.040 --> 0:06:37.560 of a perception that Audi was a brand that made 0:06:37.560 --> 0:06:40.800 cars that old people liked. It was able to get 0:06:40.880 --> 0:06:43.640 past that an Audi for the most part, operated as 0:06:43.680 --> 0:06:48.920 an independent division within Volkswagen. Around this time forward, one 0:06:49.080 --> 0:06:52.120 enormous political event that would hit close to home for 0:06:52.320 --> 0:06:56.799 doctor Han quite literally was the reunification of Germany. Towards 0:06:56.839 --> 0:06:59.080 the end of the nineteen eighties, it became clear that 0:06:59.120 --> 0:07:03.000 the Soviet Union days were numbered, and that entire story 0:07:03.120 --> 0:07:06.680 is far too big to fit into an episode about Volkswagen. 0:07:07.080 --> 0:07:10.440 But one of the many consequences of the Soviet Union's 0:07:10.480 --> 0:07:15.200 collapse was that East and West Germany would reunite into 0:07:15.240 --> 0:07:18.520 a whole nation. Now, this was when the Berlin Wall, 0:07:18.600 --> 0:07:22.960 which once stood as a symbol of oppression and authoritarianism 0:07:23.040 --> 0:07:26.800 was pulled down to the ground. For Volkswagen, it would 0:07:26.800 --> 0:07:30.360 mean the opportunity to establish new manufacturing facilities and what 0:07:30.520 --> 0:07:35.480 had previously been Soviet controlled territory. As for dr Han, 0:07:35.920 --> 0:07:38.520 the meaning was much more personal. He had grown up 0:07:38.520 --> 0:07:43.240 in Chimnets, which is in eastern Germany. After World War Two, 0:07:43.520 --> 0:07:46.880 his family left the region as that region was falling 0:07:46.920 --> 0:07:50.320 to Soviet control. In fact, Dr hans father was one 0:07:50.360 --> 0:07:53.840 of the founders of Auto Union, which would later evolve 0:07:53.880 --> 0:07:57.080 into AUDI. So for Dr Han this was more than 0:07:57.200 --> 0:08:01.280 just Volkswagen growing its production facilities. It was coming back 0:08:01.360 --> 0:08:04.800 to a part of Germany that hadn't been you know, 0:08:05.400 --> 0:08:09.040 approachable for years. It had been behind Soviet control, behind 0:08:09.040 --> 0:08:13.400 the Iron Curtain. Part of hans reasoning, in fact, a 0:08:13.480 --> 0:08:15.760 large part of it when it came to opening up 0:08:15.800 --> 0:08:19.640 manufacturing facilities, was that relying upon a centralized production model 0:08:20.040 --> 0:08:23.520 wasn't necessarily efficient or cost effective. He wanted to build 0:08:23.520 --> 0:08:27.280 more plants in various regions so that the production facilities 0:08:27.440 --> 0:08:29.520 weren't that far away from the people who were actually 0:08:29.560 --> 0:08:32.360 buying the cars. That really cut down costs. If you're 0:08:32.360 --> 0:08:35.120 building the stuff near where the people who want the 0:08:35.160 --> 0:08:39.880 stuff can get the stuff, then you're cutting down costs significantly. 0:08:40.160 --> 0:08:43.120 So he was looking ahead to a more unified Europe 0:08:43.160 --> 0:08:45.280 and he wanted to build a car company capable of 0:08:45.320 --> 0:08:50.040 flourishing in that environment. At the same time, expanding operations 0:08:50.480 --> 0:08:54.160 costs a lot of money, and Volkswagen was spending a 0:08:54.240 --> 0:08:58.679 ton to build out these manufacturing facilities. Moreover, Han felt 0:08:58.720 --> 0:09:00.840 that the European market would serve as sort of the 0:09:00.880 --> 0:09:04.560 foundation for the rest of Volkswagen's businesses around the world, 0:09:04.920 --> 0:09:08.079 so most of his focus was on developing the European 0:09:08.120 --> 0:09:12.280 market and investing in that market, which meant Volkswagen's presence 0:09:12.320 --> 0:09:15.200 in other parts of the world, notably in North America 0:09:15.240 --> 0:09:18.520 and the United States, really began to fade quite a bit. 0:09:18.880 --> 0:09:21.559 Fans of Volkswagen in the US felt like they were 0:09:21.559 --> 0:09:24.960 being neglected, something that stung more than a little bit 0:09:25.080 --> 0:09:27.600 considering the fact that Dr Han had once been the 0:09:27.640 --> 0:09:31.959 head of the American division of Volkswagen. The popularity of 0:09:32.040 --> 0:09:35.360 Volkswagen in America had been on shaky ground since nine 0:09:36.559 --> 0:09:39.439 when sales figures dipped from year to year. It went 0:09:39.440 --> 0:09:43.400 down from nineteen one. Now the numbers fluctuated a bit 0:09:43.440 --> 0:09:46.000 over the next several years. Sometimes they would go down 0:09:46.040 --> 0:09:48.160 quite a bit, sometimes they would rebound a little bit. 0:09:48.480 --> 0:09:51.400 But the general trend from nineteen eighty one all the 0:09:51.400 --> 0:09:55.800 way to nineteen nine three was to see declines in sales. 0:09:56.280 --> 0:09:58.679 And I'm sure most of you know that's the opposite 0:09:58.679 --> 0:10:00.680 of what you want to see in a sales chart. 0:10:01.160 --> 0:10:03.360 And when I say a decline, I mean there was 0:10:03.400 --> 0:10:06.280 a really big drop off. So back in nineteen eighty 0:10:06.480 --> 0:10:10.600 Volkswagen sold around three hundred thirty eight thousand vehicles in 0:10:10.640 --> 0:10:15.120 the US market. In that number dropped down to fewer 0:10:15.160 --> 0:10:19.240 than fifty thousand vehicles. So three d thirty eight thousand 0:10:19.320 --> 0:10:24.560 down to less than fifty thousand. That's catastrophic. So what 0:10:24.760 --> 0:10:27.760 caused that number to drop down so low in the 0:10:27.840 --> 0:10:31.559 United States? Well, one reason was that the general consensus 0:10:32.280 --> 0:10:35.840 was that the cars coming out of the American manufacturing 0:10:35.920 --> 0:10:39.680 plant were substandard, and another was that the cars coming 0:10:39.679 --> 0:10:44.360 out of Mexico were similarly unreliable, and the Puebla manufacturing 0:10:44.360 --> 0:10:47.800 facility in Mexico was experiencing a ton of different problems. 0:10:48.280 --> 0:10:52.040 So it wasn't until nineteen when Volkswagen introduced the third 0:10:52.080 --> 0:10:54.679 generation of the Goulf and the third generation of the 0:10:54.760 --> 0:10:58.240 Jetta models in the US that sales began to recover. 0:10:58.800 --> 0:11:03.679 The American market was fiercely competitive at that time. Japanese 0:11:03.720 --> 0:11:06.960 automakers were really filling in the void that had been 0:11:07.040 --> 0:11:10.880 left by Volkswagen, and the Japanese companies were offering cars 0:11:10.920 --> 0:11:14.600 that aimed at customers who were looking for reliable, inexpensive vehicles. 0:11:15.000 --> 0:11:17.319 So in the nineteen seventies, if you were talking about 0:11:17.440 --> 0:11:21.360 an auto import in the United States, you were probably 0:11:21.400 --> 0:11:25.640 talking about Volkswagen. But by the mid eighties that had changed. 0:11:25.880 --> 0:11:27.840 If you were talking about an import, you were probably 0:11:27.880 --> 0:11:31.600 talking about Japanese car. And Dr Han didn't seem too 0:11:31.640 --> 0:11:34.880 concerned about reversing that trend, as he was focused more 0:11:34.960 --> 0:11:37.800 on the European market at the time. Now that's not 0:11:37.840 --> 0:11:41.320 to say Volkswagen wasn't introducing new vehicles during Dr hans 0:11:41.360 --> 0:11:44.880 time as CEO. The company produced new models like the 0:11:44.960 --> 0:11:50.120 Volkswagen Santana also known as the Quantum, which evolved from 0:11:50.200 --> 0:11:53.720 the Volkswagen Pasat. Volkswagen also made a few cars for 0:11:53.880 --> 0:11:57.160 various regional markets like Brazil or Eastern Europe, and these 0:11:57.200 --> 0:12:01.280 were very much peculiar to those agents. So if you 0:12:01.320 --> 0:12:03.880 weren't from there, you were not likely to see one 0:12:03.920 --> 0:12:08.959 of these types of Volkswagen's. In Volkswagen launched an ad 0:12:09.000 --> 0:12:12.000 campaign in the United States that I still remember quite well. 0:12:12.240 --> 0:12:16.040 The company introduced a new word to Planet Earth. That 0:12:16.160 --> 0:12:20.360 new word was far fig nugan. This was technically a 0:12:20.400 --> 0:12:24.120 brand new word made up of two existing German words. 0:12:24.600 --> 0:12:28.480 You had fatherin, meaning to drive, and very NuGen, which 0:12:28.559 --> 0:12:32.000 means enjoyment. So this was supposed to be about the 0:12:32.120 --> 0:12:37.240 enjoyment of driving driving enjoyment varvig NuGen. This was not 0:12:37.280 --> 0:12:40.920 an existing German word, rather one that was invented for 0:12:41.000 --> 0:12:43.440 the ad campaign. However, I will say that the German 0:12:43.520 --> 0:12:47.679 language frequently strings together multiple words to create a new word, 0:12:48.160 --> 0:12:51.959 rather than just inventing a sensible short word to handle things. 0:12:52.320 --> 0:12:54.720 That's why you will occasionally run into German words that 0:12:54.760 --> 0:12:58.360 are incredibly long, because they've just strung together a bunch 0:12:58.440 --> 0:13:02.640 of pre existing words to describe something new. Now, despite 0:13:02.679 --> 0:13:05.360 the ad campaign, the general feeling in the US was 0:13:05.440 --> 0:13:08.720 that Volkswagen was just focused on other markets and not 0:13:08.960 --> 0:13:15.000 in North America. In Dr Han retired as CEO, and remember, 0:13:15.400 --> 0:13:18.040 the worst year for North American sales would follow in 0:13:20.080 --> 0:13:23.319 partly because Dr Hans strategy hadn't really supported the North 0:13:23.360 --> 0:13:26.480 American market. The new head of the company would be 0:13:26.520 --> 0:13:30.560 a man named Ferdinand Psh. And by the way, I know, 0:13:30.720 --> 0:13:34.760 I butchered the pronunciation of Psh in a previous episode 0:13:34.800 --> 0:13:39.000 when I talked about this family. But Ferdinand Psh had 0:13:39.000 --> 0:13:43.640 previously helmed the Audi division under Volkswagen Group, and beyond that, 0:13:43.920 --> 0:13:47.920 he traced his lineage back to the very founding of Volkswagen. 0:13:48.440 --> 0:13:55.080 His grandfather was Ferdinand Porsche himself. His father was Anton Psh, 0:13:55.120 --> 0:14:02.800 who married Ferdinand Porsche's daughter Louise headvig Annie Villehelmina Portschah. 0:14:03.160 --> 0:14:05.320 What a name. And so if you listen to my 0:14:05.320 --> 0:14:08.360 first episode in this series, you know that Anton Psh 0:14:08.440 --> 0:14:11.920 had been the director of Volkswagen during World War Two. 0:14:12.400 --> 0:14:15.720 That meant he was overseeing operations back when Volkswagen was 0:14:15.800 --> 0:14:20.160 dependent upon forced labor, and reportedly he ran off with 0:14:20.200 --> 0:14:25.840 a significant amount of money from Volkswagen while fleeing Allied forces. 0:14:25.880 --> 0:14:30.280 In he would get arrested by French authorities along with 0:14:30.280 --> 0:14:32.720 Ferdinand Porsche and spent a couple of years in jail 0:14:32.760 --> 0:14:37.360 before finally being released. Well, Ferdinand pH had previously worked 0:14:37.480 --> 0:14:41.560 at Porsche mainly in efforts to build high performance racing cars, 0:14:41.920 --> 0:14:44.560 with the primary goal of building a vehicle that could 0:14:44.600 --> 0:14:48.440 win the Laman's endurance race. This type of race is 0:14:48.520 --> 0:14:51.720 different from those that are all about the first vehicle 0:14:51.760 --> 0:14:53.760 to cross the finish line after a given number of 0:14:53.840 --> 0:14:57.920 laps or distance. Instead, the winning vehicle at Lament's is 0:14:58.000 --> 0:15:01.480 the one that has covered the most distance in a 0:15:01.600 --> 0:15:05.200 twenty four hour period, So whichever car has gone the 0:15:05.280 --> 0:15:11.440 furthest within twenty four hours across a predetermined route. Porsche 0:15:11.600 --> 0:15:15.800 had been entering versions of its Porsche nine seventeen for 0:15:15.960 --> 0:15:19.480 twenty five years before a Porsche driver took home the 0:15:19.520 --> 0:15:23.280 top prize. Ferdinand had achieved his goal of engineering a 0:15:23.320 --> 0:15:27.520 winning race car at great expense. In fact, it was 0:15:27.560 --> 0:15:32.200 such an expensive endeavor that it nearly bankrupted Porsche. In 0:15:32.320 --> 0:15:37.600 nineteen two, Ferdinand Psh would transition from Porsche to go 0:15:37.760 --> 0:15:42.200 work at Audi. Now this wasn't necessarily by choice. Pasha's 0:15:42.520 --> 0:15:46.760 obsession with creating faster racing cars had almost brought down 0:15:46.760 --> 0:15:50.920 the company, and ownership of the company fell to two families, 0:15:50.960 --> 0:15:54.000 the Porsche family and the pH family, and both of 0:15:54.000 --> 0:15:58.240 those families trace their history back to the founder Ferdinand Porsche. 0:15:58.680 --> 0:16:03.440 Both of them owned about fifty of the company Porsche, 0:16:03.840 --> 0:16:06.520 and the two sides were beginning to fight with each other, 0:16:07.120 --> 0:16:09.880 and I swear going through the stories makes it seem 0:16:09.920 --> 0:16:12.240 like it's a season of Game of Thrones. We'll learn 0:16:12.240 --> 0:16:15.040 more about that later in this episode. So in order 0:16:15.080 --> 0:16:18.360 to prevent this rivalry from tearing the company to pieces, 0:16:18.840 --> 0:16:22.680 the two families agreed that no one from either side 0:16:22.760 --> 0:16:26.200 should be involved in the day to day operations of Porsche. 0:16:26.960 --> 0:16:31.440 So that's why PSH would leave Porsche the car company Porsche, 0:16:31.680 --> 0:16:37.000 not the holding company for Audi. Ferdinand. PSH would Transformality 0:16:37.040 --> 0:16:39.000 from that brand that was being viewed as a bit 0:16:39.040 --> 0:16:41.880 old fashioned in catering to the elderly into more of 0:16:41.920 --> 0:16:45.720 a luxury sedan brand, and so it brought Audi into 0:16:45.880 --> 0:16:51.120 competition against vehicle makers like BMW or Mercedes. But PSH 0:16:51.240 --> 0:16:55.640 had grander designs. 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We're 0:18:50.480 --> 0:18:54.800 getting into an era in Volkswagen's history that was particularly 0:18:54.960 --> 0:19:01.159 complicated by family politics. This stuff gets juice. There's betrayal, 0:19:01.480 --> 0:19:06.600 there's shifty maneuvering, there's backstabbing, their extramarital affairs. I mean, 0:19:06.640 --> 0:19:09.720 if you look at the Porstcha and PSH families from 0:19:09.720 --> 0:19:13.400 the nineteen seventies to the two thousands and a little 0:19:13.440 --> 0:19:15.960 bit beyond, it sounds like the stuff out of a 0:19:16.040 --> 0:19:20.200 soap opera, like Dynasty or Dallas. It's crazy. On top 0:19:20.240 --> 0:19:23.560 of that, we enter into a bizarre corporate structure in 0:19:23.600 --> 0:19:26.679 which different companies gain a stake in each other, and 0:19:26.680 --> 0:19:28.879 in some cases it looks to me like the whole 0:19:28.920 --> 0:19:32.040 thing is oura borus. You know, the snake eating its 0:19:32.080 --> 0:19:34.479 own tail. And I'll do my best a little bit 0:19:34.560 --> 0:19:37.040 later in this episode to try and work out how 0:19:37.160 --> 0:19:40.720 that actually ends up being structured. For no other reason 0:19:40.760 --> 0:19:43.680 that to illustrate how the ownership of these companies is 0:19:43.720 --> 0:19:48.280 incredibly complicated and at least to me somewhat ikey. In 0:19:48.320 --> 0:19:51.400 the meantime, we've got other stuff to touch on now. 0:19:51.440 --> 0:19:53.960 While I'll have lots of critical things to say about 0:19:54.000 --> 0:19:57.600 pH one thing that's clear is that his ambition pushed 0:19:57.680 --> 0:20:03.879 Volkswagen to new heights. He was reportedly a very hard 0:20:04.440 --> 0:20:09.960 boss to work for, Like he was incredibly demanding and ruthless. Uh. 0:20:10.000 --> 0:20:13.119 He was quick to throw you aside if he didn't 0:20:13.200 --> 0:20:16.560 think you were useful. And there are a lot of 0:20:16.560 --> 0:20:19.359 other negative things I could say. But in nine the 0:20:19.440 --> 0:20:23.160 company would introduce the new Beatle and that would become 0:20:23.160 --> 0:20:25.520 available for purchase in the United States the following year, 0:20:25.840 --> 0:20:28.359 and that showed that they were now paying attention to 0:20:28.440 --> 0:20:32.120 the North American market again and no longer keeping such 0:20:32.160 --> 0:20:35.560 a laser focus just on Europe. This was a combat 0:20:35.560 --> 0:20:38.359 car that was inspired by the original Beetle, but it 0:20:38.520 --> 0:20:43.600 featured sleeker lines, front mounted inline four cylinder engine. If 0:20:43.640 --> 0:20:45.480 you listen to the first part of the series you 0:20:45.560 --> 0:20:48.680 remember that the original Volkswagen Beetle was an air cooled 0:20:48.800 --> 0:20:52.120 rear mounted engine, so it was very different from that, 0:20:52.760 --> 0:20:56.000 and Motor Trends would actually name it the import car 0:20:56.080 --> 0:21:00.560 of the Year in nineteen Despite its small size, it 0:21:00.640 --> 0:21:03.399 really wasn't the most efficient vehicle on the road. It 0:21:03.520 --> 0:21:06.240 averaged twenty one miles per gallon. You would have thought 0:21:06.240 --> 0:21:09.199 that perhaps it would have been a little better about that, 0:21:09.240 --> 0:21:13.080 but no. Well, the new Beatle, along with an updated 0:21:13.160 --> 0:21:17.840 Passat and a new Jetta model all helped revitalized Volkswagen 0:21:17.920 --> 0:21:21.080 sales in North America after that market had been largely 0:21:21.119 --> 0:21:24.520 forgotten about for more than a decade. Meanwhile, on the 0:21:24.560 --> 0:21:27.840 corporate side of things, pH was leading some pretty serious 0:21:27.840 --> 0:21:32.280 efforts to really expand Volkswagen's assets. One of the big 0:21:32.320 --> 0:21:36.560 acquisitions at this time was Bentley Motors, the company that 0:21:36.560 --> 0:21:38.760 had gone through a couple of changes in ownership, having 0:21:38.800 --> 0:21:42.560 been part of Rolls Royce for nearly forty years before 0:21:42.680 --> 0:21:46.879 a company called Vickers Plc purchased the Rolls Royce Motor 0:21:46.920 --> 0:21:51.400 division in nineteen seventy. Twenty eight years after that, PSH 0:21:51.520 --> 0:21:54.480 and Volkswagen came calling with an offer to purchase the 0:21:54.560 --> 0:21:58.600 Bentley brand. Though Volkswagen would not acquire ownership of the 0:21:58.680 --> 0:22:01.399 Rolls Royce logo or name, they did get hold of 0:22:01.440 --> 0:22:04.000 the designs. They could use the car designs, but they 0:22:04.040 --> 0:22:08.719 could not use the logo or name of Rolls Royce Bentley's. 0:22:09.119 --> 0:22:13.640 In case you don't know, our luxury cars like as 0:22:13.760 --> 0:22:18.320 luxury as luxury gets really crafts. People hand make many 0:22:18.480 --> 0:22:21.199 of the details on the vehicles like you'll get like 0:22:21.320 --> 0:22:26.080 hand carved dashboards, for example. So the manufacturing process is 0:22:26.119 --> 0:22:29.280 guided by a human touch nearly every step of the way. 0:22:29.320 --> 0:22:34.199 It is slow and methodical, and these are extremely expensive 0:22:34.280 --> 0:22:38.000 luxury cars. They're also extremely British. The cost of the 0:22:38.040 --> 0:22:43.000 acquisition was four hundred thirty million pounds. But we're not 0:22:43.080 --> 0:22:48.200 done with Volkswagen's purchases in n yet. The company also 0:22:48.240 --> 0:22:52.040 acquired the rights to use the Bugatti brand name. Now, 0:22:52.040 --> 0:22:55.119 Bugatti has its own odd past. In fact, at this 0:22:55.119 --> 0:22:57.320 point I think it must come as a prerequisite for 0:22:57.359 --> 0:23:01.240 car companies. It was founded in the early twentieth century 0:23:01.280 --> 0:23:05.959 by a Torre Bugatti, who built many successful race cars 0:23:06.160 --> 0:23:09.240 in the early nineteen hundreds, but after his death in 0:23:09.280 --> 0:23:11.960 the nineteen forties, the company kind of lost focus, and 0:23:11.960 --> 0:23:15.520 by the nineteen fifties it had pretty much faded from memory. 0:23:15.560 --> 0:23:19.760 It wasn't really producing cars anymore. In nineteen seven, Romano 0:23:19.840 --> 0:23:23.760 are totally an entrepreneur, acquired the rights to the Bugatti 0:23:23.800 --> 0:23:28.040 brand and built new manufacturing facilities with the the intent 0:23:28.280 --> 0:23:32.480 of making Bugatti a prestige brand again. The new Bugatti 0:23:32.520 --> 0:23:35.520 company produced several cars, but a recession in the nineteen 0:23:35.600 --> 0:23:39.360 nineties took a big chunk of the company's assets and 0:23:39.440 --> 0:23:44.240 it was essentially a failed business by so three years 0:23:44.280 --> 0:23:48.600 later in nine Volkswagen acquires the brand name Bugatti and 0:23:48.720 --> 0:23:51.879 starts up production with new model designs. So today the 0:23:51.920 --> 0:23:55.439 Bugatti brand is associated with super cars that come with 0:23:56.040 --> 0:23:59.880 incredible high end price tags. And I think it's most 0:24:00.080 --> 0:24:03.159 a testament to Pasha's interest in fast cars, Like he 0:24:03.720 --> 0:24:09.080 clearly always had a fascination with building incredibly fast vehicles, 0:24:09.280 --> 0:24:11.840 and Bugatti are the type of cars that look like 0:24:11.880 --> 0:24:15.120 they're going fast even when they're sitting still. And I'm 0:24:15.119 --> 0:24:19.399 still not done with their acquisitions. One other big brand 0:24:19.520 --> 0:24:24.360 that Volkswagen acquired that year was Lamborghini. That was the 0:24:24.400 --> 0:24:27.960 Italian luxury sports car company. It's now part of Volkswagen 0:24:28.200 --> 0:24:31.200 It was founded in the nineteen sixties. Largely it was 0:24:31.280 --> 0:24:35.280 intended to be a competitor to Ferrari and developing high 0:24:35.359 --> 0:24:39.040 performance race cars. As I mentioned earlier, is really expensive. 0:24:39.080 --> 0:24:43.080 I mean it nearly bankrupted Porscha. Well for Lamborghini, that 0:24:43.240 --> 0:24:45.000 they were having the same sort of issues. They were 0:24:45.040 --> 0:24:47.800 spending way more money than they were making, and then that, 0:24:47.920 --> 0:24:51.200 paired with the oil crisis of the nineteen seventies, meant 0:24:51.240 --> 0:24:54.280 that very few orders for these high end sports cars 0:24:54.280 --> 0:24:56.840 were coming in. It led to a disastrous collapse of 0:24:56.840 --> 0:25:00.320 the Lamborghini company and the company went bankrupt and eighteen 0:25:00.440 --> 0:25:04.440 seventy eight. A few years later, brothers Patrick and Jean 0:25:04.480 --> 0:25:09.640