1 00:00:17,620 --> 00:00:20,939 Speaker 1: Pushkin. Too quick? No, it was perfect. Pushkin. Stop. 2 00:00:21,439 --> 00:00:21,919 Speaker 2: You got it. 3 00:00:24,009 --> 00:00:24,850 Speaker 1: Hey, it's Jacob. 4 00:00:25,270 --> 00:00:28,090 Speaker 2: We are off for the next couple weeks. Today, we're 5 00:00:28,110 --> 00:00:30,130 Speaker 2: going to run a rerun. It's an episode I like 6 00:00:30,170 --> 00:00:32,809 Speaker 2: a lot. It's the first of our two-part series about 7 00:00:32,850 --> 00:00:36,860 Speaker 2: the Volkswagen Beetle. Really an extraordinary story. The car started 8 00:00:36,920 --> 00:00:40,320 Speaker 2: out as Hitler's dream car, wound up the best-selling car 9 00:00:40,360 --> 00:00:43,720 Speaker 2: in the world, and a hippie icon. Fun side note, 10 00:00:44,120 --> 00:00:48,230 Speaker 2: this episode was recently nominated for a Signal Award for 11 00:00:48,810 --> 00:00:51,940 Speaker 2: best episode of a history podcast. So if you like 12 00:00:51,979 --> 00:00:54,060 Speaker 2: the episode and you want to support the show and 13 00:00:54,080 --> 00:00:57,040 Speaker 2: you have a minute, please vote for it. You don't 14 00:00:57,060 --> 00:00:59,480 Speaker 2: have to, but it'll be nice. We'll put a link 15 00:00:59,600 --> 00:01:01,760 Speaker 2: in the show notes that takes you to the page 16 00:01:01,800 --> 00:01:04,039 Speaker 2: where you can do that. In any case, thanks for listening. 17 00:01:04,220 --> 00:01:06,260 Speaker 2: Hope you like the show, and we'll be back in 18 00:01:06,300 --> 00:01:08,220 Speaker 2: a few weeks with more new episodes. 19 00:01:20,000 --> 00:01:21,700 Speaker 1: Where are we going to start this story, Jacob? The 20 00:01:21,740 --> 00:01:22,620 Speaker 1: place is Hollywood. 21 00:01:22,640 --> 00:01:26,750 Speaker 2: The time is the late 1960s. We are on the 22 00:01:26,870 --> 00:01:30,630 Speaker 2: lot of a big Hollywood studio. They're making a racing picture, 23 00:01:31,170 --> 00:01:34,650 Speaker 2: and they need to figure out what car the hero. 24 00:01:34,410 --> 00:01:35,150 Speaker 1: Is going to drive. 25 00:01:35,990 --> 00:01:40,210 Speaker 2: They know it's going to be something small, sporty, foreign. 26 00:01:40,670 --> 00:01:42,890 Speaker 2: And so what they do is they get a bunch 27 00:01:42,970 --> 00:01:45,170 Speaker 2: of candidates, a bunch of possible cars. 28 00:01:45,370 --> 00:01:48,330 Speaker 1: So maybe an Aston Martin, like a little Fiat. Yeah. 29 00:01:48,660 --> 00:01:49,690 Speaker 1: Volkswagen Beetle. 30 00:01:50,420 --> 00:01:53,680 Speaker 2: And they park them on the studio lot right outside 31 00:01:53,700 --> 00:01:57,270 Speaker 2: the commissary. And they just let like the ordinary people 32 00:01:57,290 --> 00:01:59,950 Speaker 2: who work at the studio check out the cars as 33 00:01:59,970 --> 00:02:00,850 Speaker 2: they're coming and going. 34 00:02:00,990 --> 00:02:04,090 Speaker 1: And they watch how the people react to the cars. 35 00:02:05,570 --> 00:02:08,950 Speaker 2: And with most of the cars, people do what you expect. 36 00:02:09,820 --> 00:02:11,900 Speaker 1: Maybe they kick the tires. Is that actually a thing? 37 00:02:11,959 --> 00:02:13,799 Speaker 1: Is it just a metaphor? No, I think it's like 38 00:02:13,840 --> 00:02:16,690 Speaker 1: back when rubber was bad. Really? Like your foot would 39 00:02:16,720 --> 00:02:18,610 Speaker 1: go through? Is that what it was for? I don't know. 40 00:02:18,810 --> 00:02:21,250 Speaker 1: You want a little bounce on the tire. Okay. They like, 41 00:02:21,270 --> 00:02:25,590 Speaker 1: you know, play with the steering wheel, whatever. But when 42 00:02:25,630 --> 00:02:29,730 Speaker 1: the people get to the Volkswagen Beetle, they act in 43 00:02:29,770 --> 00:02:33,609 Speaker 1: an entirely different way. They treat it not so much 44 00:02:33,650 --> 00:02:37,880 Speaker 1: like a car as like a cute little puppy. They're like, 45 00:02:38,470 --> 00:02:42,980 Speaker 1: Heading it, tapping the car. Yeah, yeah. And the producers 46 00:02:43,100 --> 00:02:47,760 Speaker 1: see this and they think, oh, this car is different. 47 00:02:48,020 --> 00:02:51,720 Speaker 1: This car has charisma. This car is a star. 48 00:02:52,540 --> 00:02:56,609 Speaker 2: And they were originally going to call the movie Carboy Girl. 49 00:02:58,470 --> 00:02:59,810 Speaker 1: Why not? 60s, yeah. Sure. 50 00:03:00,250 --> 00:03:03,010 Speaker 2: But they loved the Beatles so much that they ended 51 00:03:03,050 --> 00:03:05,290 Speaker 2: up calling the movie The Love Bug. 52 00:03:05,690 --> 00:03:07,960 Speaker 1: Herbie the Love Bug. I remember this from my childhood. 53 00:03:08,020 --> 00:03:11,239 Speaker 1: I remember Herbie Goes Bananas, the sequel. Of course. I 54 00:03:11,280 --> 00:03:13,740 Speaker 1: had the novelization, which I bought at the book fair 55 00:03:14,280 --> 00:03:18,360 Speaker 1: and liked. The movie was a hit. 56 00:03:18,380 --> 00:03:22,280 Speaker 2: I think the second biggest grossing movie of 1969, right 57 00:03:22,540 --> 00:03:24,480 Speaker 2: behind Butch Cassidy and the Sundance Kid. 58 00:03:24,500 --> 00:03:29,220 Speaker 1: Another classic. And of course, so was The Beetle. Late 60s, 59 00:03:29,530 --> 00:03:30,150 Speaker 1: peak Beetle. 60 00:03:30,250 --> 00:03:32,650 Speaker 2: The car is, in fact, about to become, in a 61 00:03:32,669 --> 00:03:36,810 Speaker 2: few years, the best-selling car of all time, a record 62 00:03:36,830 --> 00:03:40,790 Speaker 2: that it still holds. And maybe my favorite thing about 63 00:03:40,830 --> 00:03:44,730 Speaker 2: the Beetle, in a perverse way, this cute little puppy-dog 64 00:03:44,790 --> 00:03:50,070 Speaker 2: hippie car, was dreamed up by Adolf Hitler, in part, 65 00:03:50,450 --> 00:03:53,270 Speaker 2: to conquer and subjugate his European neighbors. 66 00:03:54,410 --> 00:03:56,550 Speaker 1: I'm Jacob Goldstein. And I'm Robert Smith, and this is 67 00:03:56,610 --> 00:04:00,870 Speaker 1: Business History, otherwise known as Boy Boy Podcast. Otherwise known 68 00:04:01,010 --> 00:04:02,890 Speaker 1: as a show about the history of business. These days, 69 00:04:02,930 --> 00:04:06,090 Speaker 1: we talk a lot about industrial policy, the role of 70 00:04:06,250 --> 00:04:10,220 Speaker 1: government in commerce. When should a government intervene in the 71 00:04:10,280 --> 00:04:13,900 Speaker 1: free market and decide what to manufacture? You know, pick 72 00:04:13,940 --> 00:04:18,060 Speaker 1: winners and losers, determine the prices of things even. Hitler 73 00:04:18,140 --> 00:04:21,159 Speaker 1: tried to do all three, and it was a disaster. 74 00:04:21,880 --> 00:04:23,880 Speaker 1: Except for the car itself. It turned out to be 75 00:04:24,190 --> 00:04:27,600 Speaker 1: pretty successful. the most successful car in the history of cars. 76 00:04:28,260 --> 00:04:31,900 Speaker 1: In the 1930s, Germany was a wreck. It had lost 77 00:04:31,960 --> 00:04:36,089 Speaker 1: World War I, had unsustainable reparations put on it, the 78 00:04:36,130 --> 00:04:39,060 Speaker 1: Treaty of Versailles. It had the inflation of the 1920s. 79 00:04:39,190 --> 00:04:44,049 Speaker 1: The inflation of all inflations. Wheelbarrows full of money. You've 80 00:04:44,089 --> 00:04:46,950 Speaker 1: seen the pictures. And then coming in the 1930s, there 81 00:04:47,010 --> 00:04:51,950 Speaker 1: is a global depression. And Germany is just hitting the skids. 82 00:04:52,250 --> 00:04:58,040 Speaker 1: It's got 30% unemployment. utter poverty, and Adolf Hitler comes 83 00:04:58,180 --> 00:05:00,280 Speaker 1: in with his promises. 84 00:05:00,620 --> 00:05:04,480 Speaker 2: Yeah, so 1933, Hitler comes to power, of course, promising 85 00:05:04,500 --> 00:05:07,500 Speaker 2: that he's going to, you know, make Germany the greatest 86 00:05:07,540 --> 00:05:11,840 Speaker 2: nation on Earth. And one important part of his promise 87 00:05:12,220 --> 00:05:17,060 Speaker 2: is material prosperity, right? Germany is, it's not just a 88 00:05:17,110 --> 00:05:19,110 Speaker 2: country in the Depression, not just a country that has 89 00:05:19,140 --> 00:05:23,480 Speaker 2: been burned with reparations. It is much poorer than France, 90 00:05:23,520 --> 00:05:26,500 Speaker 2: the United Kingdom, and much, much poorer than the United States. 91 00:05:27,220 --> 00:05:32,020 Speaker 2: And so part of Hitler's program, his promise, is to 92 00:05:32,100 --> 00:05:35,560 Speaker 2: figure out how Germans can get the kind of mass-produced 93 00:05:35,620 --> 00:05:38,739 Speaker 2: goods that ordinary people in the United States are now buying. 94 00:05:39,000 --> 00:05:40,920 Speaker 1: And that's exactly what the Germans wanted to hear at 95 00:05:40,960 --> 00:05:41,739 Speaker 1: this time. Sure. 96 00:05:42,000 --> 00:05:46,500 Speaker 2: And in particular, you know, mass production and mass consumption 97 00:05:46,920 --> 00:05:49,080 Speaker 2: is built on this idea of sort of the people, 98 00:05:49,279 --> 00:05:52,440 Speaker 2: the mass of people, right? And the mass of people... 99 00:05:53,040 --> 00:05:57,180 Speaker 2: is really important for Hitler and the Nazis, right? There 100 00:05:57,240 --> 00:06:01,390 Speaker 2: is this German word, Volk, like folk, and it can 101 00:06:01,430 --> 00:06:05,130 Speaker 2: mean people or it can mean nation. The Nazis have 102 00:06:05,150 --> 00:06:07,790 Speaker 2: this term, and I will say now, I don't speak German, 103 00:06:07,910 --> 00:06:09,770 Speaker 2: as you will hear in this show, but the Nazis 104 00:06:09,790 --> 00:06:15,630 Speaker 2: have this term Volksgemeinschaft, which means people's communities. And it 105 00:06:15,690 --> 00:06:17,710 Speaker 2: is their dream of the Volk as a nation. And 106 00:06:17,750 --> 00:06:21,010 Speaker 2: of course, crucially, right, for Hitler, the Volk doesn't mean all. 107 00:06:20,920 --> 00:06:22,039 Speaker 1: The people in Germany. 108 00:06:22,300 --> 00:06:24,880 Speaker 2: It means the Aryans and not the Jews and not 109 00:06:24,920 --> 00:06:29,120 Speaker 2: all the other undesirables. So Hitler comes to power with 110 00:06:29,180 --> 00:06:33,220 Speaker 2: this promise of prosperity. And he starts promising all this 111 00:06:33,400 --> 00:06:34,620 Speaker 2: Volk's stuff. 112 00:06:35,400 --> 00:06:38,089 Speaker 1: There's the... You can do it. You can do it. 113 00:06:38,100 --> 00:06:45,599 Speaker 1: Volk's Kempfanger radio. People's radio. Volk's Kuhlschrank radio. People's refrigerator, 114 00:06:45,640 --> 00:06:49,860 Speaker 1: the Kühl. The Kühl. The Volkswagen tractor. Tractor. Tractor, yeah. 115 00:06:50,080 --> 00:06:55,700 Speaker 1: And then maybe the Fuhrer's favorite, in fact, the Volkswagen. 116 00:06:56,550 --> 00:07:00,810 Speaker 1: And it's interesting because Hitler really prioritizes this. You know, 117 00:07:00,930 --> 00:07:03,690 Speaker 1: just a few weeks after he takes power in 1933, 118 00:07:03,690 --> 00:07:07,970 Speaker 1: he goes to the Berlin Motor Show, which is amazing, right? 119 00:07:07,990 --> 00:07:09,230 Speaker 1: But I mean, I guess at the time... You think 120 00:07:09,250 --> 00:07:10,770 Speaker 1: he's busy, right? He's got a lot to do. Yeah, 121 00:07:10,830 --> 00:07:12,400 Speaker 1: and he's like, what do we need to do first? 122 00:07:13,240 --> 00:07:16,500 Speaker 1: a car. Yeah. And maybe because of the symbol of 123 00:07:16,540 --> 00:07:19,620 Speaker 1: prosperity or maybe because he's already thinking about what a 124 00:07:19,700 --> 00:07:23,290 Speaker 1: car can do. And it's at that motor show, 1933, 125 00:07:23,290 --> 00:07:26,990 Speaker 1: that he announces this dream of the Volkswagen. Yeah, and 126 00:07:27,010 --> 00:07:29,950 Speaker 1: this dream for him, it means a lot of things, right? 127 00:07:30,010 --> 00:07:33,990 Speaker 2: There is also this idea that when the Volk have cars, 128 00:07:34,430 --> 00:07:36,520 Speaker 2: it will help unite them as a people, right? If 129 00:07:36,540 --> 00:07:39,780 Speaker 2: you think of traditional rural poverty, you don't have a car, 130 00:07:39,880 --> 00:07:42,040 Speaker 2: it's hard to go from town to town. But if 131 00:07:42,100 --> 00:07:45,150 Speaker 2: everybody has A Wagen. Then all the Volk, they can 132 00:07:45,190 --> 00:07:47,400 Speaker 2: go and see the beautiful countryside. They can go and 133 00:07:47,440 --> 00:07:48,380 Speaker 2: visit their neighbors. 134 00:07:48,440 --> 00:07:51,460 Speaker 1: They are distinct regions. And in fact, we're separate countries 135 00:07:51,520 --> 00:07:53,820 Speaker 1: at one point. Not that long before this. Yes. So 136 00:07:53,860 --> 00:07:56,180 Speaker 1: it brings them together as a country. And then there's 137 00:07:56,260 --> 00:07:59,890 Speaker 1: another part of the plan, which is at this point, 138 00:07:59,930 --> 00:08:02,250 Speaker 1: because there are not a lot of cars in Germany, 139 00:08:02,570 --> 00:08:05,750 Speaker 1: not a lot of Germans know how to drive. And Hitler... 140 00:08:06,300 --> 00:08:10,140 Speaker 1: has this desire to take new territory. And in order 141 00:08:10,180 --> 00:08:12,280 Speaker 1: to do that, he is going to need young men 142 00:08:12,810 --> 00:08:15,650 Speaker 1: with guns who can drive somewhere. And Germany really is 143 00:08:15,690 --> 00:08:17,370 Speaker 1: far behind here, right? Like in the U.S. 144 00:08:17,410 --> 00:08:19,350 Speaker 2: At this point, there's something like one car or truck 145 00:08:19,370 --> 00:08:23,000 Speaker 2: for every five people. And in Germany, it's more like 146 00:08:23,280 --> 00:08:26,640 Speaker 2: one car or truck for every 150 people. 147 00:08:26,720 --> 00:08:30,880 Speaker 1: Amazing. And it's interesting because Germany invented the car. They 148 00:08:30,920 --> 00:08:33,240 Speaker 1: invented the car, and there were other small cars for sale, 149 00:08:33,260 --> 00:08:35,790 Speaker 1: but they were really expensive. They were almost just bespoke 150 00:08:35,910 --> 00:08:37,270 Speaker 1: hobby vehicles, right? 151 00:08:37,370 --> 00:08:39,870 Speaker 2: Yeah, like even a cheap car in Germany at this 152 00:08:39,930 --> 00:08:44,670 Speaker 2: point costs something like 2,000 Reichsmarks, which is around two years' 153 00:08:44,710 --> 00:08:49,020 Speaker 2: salary for a typical worker. And much more expensive, I 154 00:08:49,040 --> 00:08:51,660 Speaker 2: should say, than basic cars in the U.S. 155 00:08:51,700 --> 00:08:54,800 Speaker 1: Were at this point, right? Germany had not mastered the 156 00:08:54,940 --> 00:08:58,160 Speaker 1: mass production of the good cheap car the way Ford 157 00:08:58,200 --> 00:09:00,800 Speaker 1: and GM had in the United States. So Hitler's dream, 158 00:09:01,700 --> 00:09:04,450 Speaker 1: car manufacturing, and that it be cheap enough that the 159 00:09:04,470 --> 00:09:07,770 Speaker 1: German people can afford it. So Hitler says, no, it 160 00:09:07,830 --> 00:09:10,770 Speaker 1: cannot be 2,000 Reichsmarks. It should be 990 Reichsmarks. I 161 00:09:10,809 --> 00:09:14,700 Speaker 1: love this. Like he's at a 99 cent star. 990 Reichsmarks, 162 00:09:14,720 --> 00:09:16,200 Speaker 1: which is less than half the price of the going car. 163 00:09:22,770 --> 00:09:25,780 Speaker 1: And according to Hitler, like, he has all these ideas 164 00:09:25,840 --> 00:09:27,760 Speaker 1: for it. It should seat four or five people so 165 00:09:27,800 --> 00:09:30,179 Speaker 1: a German family can travel around, right? It should go 166 00:09:30,200 --> 00:09:32,360 Speaker 1: at least 50 miles an hour, you know, that way 167 00:09:32,400 --> 00:09:35,380 Speaker 1: you can get to Moscow in a timely way. Got 168 00:09:35,400 --> 00:09:37,480 Speaker 1: to put the Blitz in the Blitzkrieg, right? Exactly right. 169 00:09:38,080 --> 00:09:40,830 Speaker 1: And he says you should be able to mount machine 170 00:09:40,890 --> 00:09:44,130 Speaker 1: guns on it. Sure. Not for the family vacation, but, 171 00:09:44,150 --> 00:09:46,870 Speaker 1: you know, for other things. You never know. Other plans, right? 172 00:09:47,330 --> 00:09:47,670 Speaker 1: And now. 173 00:09:48,200 --> 00:09:51,599 Speaker 2: There are German carmakers in Germany, right? There's still a 174 00:09:51,679 --> 00:09:54,620 Speaker 2: private industry at this point in the country. And they 175 00:09:54,760 --> 00:10:01,260 Speaker 2: look at Hitler's specs and price and they say, no way. 176 00:10:02,160 --> 00:10:05,210 Speaker 2: You know, they are, of course, aware that cheaper cars 177 00:10:05,250 --> 00:10:07,750 Speaker 2: are made in the U.S., but the German market is 178 00:10:07,950 --> 00:10:09,329 Speaker 2: way smaller than the U.S. 179 00:10:09,370 --> 00:10:11,929 Speaker 1: There are fewer Germans. Germans are much poorer. 180 00:10:12,300 --> 00:10:15,620 Speaker 2: So even if the automakers could get all of the knowledge, 181 00:10:15,660 --> 00:10:18,380 Speaker 2: could build a factory like the ones in the United States, 182 00:10:18,600 --> 00:10:21,719 Speaker 2: there just isn't a German market big enough to get 183 00:10:21,760 --> 00:10:25,210 Speaker 2: the economy of scale to sell a car this good 184 00:10:25,540 --> 00:10:26,550 Speaker 2: at a price this low. 185 00:10:27,010 --> 00:10:29,170 Speaker 1: And the carmakers, you know, they get together and they're like, 186 00:10:29,190 --> 00:10:33,500 Speaker 1: so what? Who's going to tell the Fuhrer, Adolf Hitler, 187 00:10:33,559 --> 00:10:38,020 Speaker 1: that we can't do it? Man, Fuhrer, we have some 188 00:10:38,160 --> 00:10:41,410 Speaker 1: notes on the Volkswagen. On your big plan. You've told 189 00:10:41,670 --> 00:10:44,730 Speaker 1: everybody at the auto show. What? No. Nobody's going to 190 00:10:44,770 --> 00:10:47,690 Speaker 1: do that. So what does a company do when it 191 00:10:47,770 --> 00:10:52,120 Speaker 1: doesn't want to deliver the bad news? They hire a consultant. Yes. 192 00:10:52,559 --> 00:10:54,770 Speaker 1: That's what they're for. Yes. They're going to have the 193 00:10:54,809 --> 00:10:57,450 Speaker 1: consultant write a report to the Fuhrer that says, as 194 00:10:57,510 --> 00:11:00,030 Speaker 1: an independent observer, it is not possible to make a 195 00:11:00,050 --> 00:11:02,980 Speaker 1: car and sell it for 990 rex marks. And pretty 196 00:11:03,000 --> 00:11:06,400 Speaker 1: soon they find their man, an automotive engineer by the 197 00:11:06,440 --> 00:11:10,020 Speaker 1: name of Dr. Ferdinand Porsche. We'll talk about him after 198 00:11:10,040 --> 00:11:37,069 Speaker 1: the break. We will. Okay, that's the end of the ad. 199 00:11:37,550 --> 00:11:40,929 Speaker 2: When we left, the German automakers had just decided to 200 00:11:40,970 --> 00:11:41,780 Speaker 2: hire as their. 201 00:11:41,650 --> 00:11:46,860 Speaker 1: Consultant one Dr. Ferdinand Portia. I'm guessing he is not 202 00:11:46,920 --> 00:11:47,700 Speaker 1: a medical doctor. 203 00:11:48,559 --> 00:11:53,870 Speaker 2: He's not even an engineering doctor. He's an honorary engineering doctor. 204 00:11:54,530 --> 00:11:56,540 Speaker 1: But the doctor's important. Maybe he gets the respect of 205 00:11:56,559 --> 00:11:58,900 Speaker 1: the Fuhrer. He can lay the truth to him and 206 00:11:58,940 --> 00:12:01,140 Speaker 1: just say that it is not economically possible to build 207 00:12:01,179 --> 00:12:01,980 Speaker 1: a cheap car. Well, yeah. 208 00:12:02,059 --> 00:12:04,900 Speaker 2: And certainly Porsche is like legit at this point. He's 209 00:12:04,920 --> 00:12:07,800 Speaker 2: been working in the auto industry for decades. He's in 210 00:12:07,840 --> 00:12:11,200 Speaker 2: his mid-50s. He designed cars for Daimler. He worked on 211 00:12:11,300 --> 00:12:13,760 Speaker 2: racing teams. And at this point, he is, in fact, 212 00:12:13,780 --> 00:12:14,220 Speaker 2: a consultant. 213 00:12:14,240 --> 00:12:16,780 Speaker 1: He's running a consultancy. And he gets this. 214 00:12:16,679 --> 00:12:19,730 Speaker 2: Call from the automakers to be the, you know, bad 215 00:12:19,760 --> 00:12:21,760 Speaker 2: news consultant and And he. 216 00:12:21,720 --> 00:12:24,340 Speaker 1: Takes the job. He says, yeah, sure, I'll study this. 217 00:12:24,360 --> 00:12:27,400 Speaker 1: I'll write a report. But he's like, no, I'm not 218 00:12:27,420 --> 00:12:29,939 Speaker 1: going to tell the Fuhrer no. I'm going to tell 219 00:12:29,980 --> 00:12:32,440 Speaker 1: him yes. Hell yes. Hell yes. And I'll be the 220 00:12:32,480 --> 00:12:36,220 Speaker 1: man to make his Volkswagen dream come true. German hero. 221 00:12:37,120 --> 00:12:40,809 Speaker 2: And so he gets to work designing the people's car 222 00:12:40,850 --> 00:12:43,790 Speaker 2: of Hitler's dreams and pretty quickly comes up with this 223 00:12:43,910 --> 00:12:48,810 Speaker 2: little scale model. And there are these amazing photos of 224 00:12:48,910 --> 00:12:51,670 Speaker 2: Porsche cars. And Hitler looking at a model that's like, 225 00:12:51,710 --> 00:12:55,110 Speaker 2: I don't know, a foot long of what will become 226 00:12:55,150 --> 00:12:55,490 Speaker 2: the Beetle. 227 00:12:56,390 --> 00:12:58,640 Speaker 1: I would describe this car, except you have seen it. 228 00:12:58,750 --> 00:13:02,170 Speaker 1: It looks exactly like every Volkswagen Beetle you have ever 229 00:13:02,250 --> 00:13:05,630 Speaker 1: seen from the very beginning. It's that round little hedgehog 230 00:13:05,710 --> 00:13:06,530 Speaker 1: looking car. 231 00:13:06,850 --> 00:13:09,330 Speaker 2: And in this photo, you can see Porsche is on 232 00:13:09,370 --> 00:13:15,090 Speaker 2: the left and Hitler, like full on Hitler, swastika, armband, mustache, 233 00:13:15,170 --> 00:13:15,809 Speaker 2: slick down hair. 234 00:13:16,670 --> 00:13:20,630 Speaker 1: He's like petting the bumper. Just like the people at 235 00:13:20,690 --> 00:13:23,130 Speaker 1: the movie studio 30 years later. Yeah. Yeah. 236 00:13:23,210 --> 00:13:25,670 Speaker 2: And so we can talk about the design itself for 237 00:13:25,720 --> 00:13:28,500 Speaker 2: a sec because it is so iconic is. 238 00:13:28,440 --> 00:13:30,300 Speaker 1: An overused word, but it really is. And they just 239 00:13:30,540 --> 00:13:33,800 Speaker 1: nail it from the jump. Remember at the time, American 240 00:13:33,840 --> 00:13:38,880 Speaker 1: cars in the 1930s are long and sort of flat. 241 00:13:38,980 --> 00:13:40,920 Speaker 1: I mean, if you picture it right, there is a 242 00:13:41,480 --> 00:13:45,059 Speaker 1: flat radiator grill on the front and then a long... 243 00:13:45,050 --> 00:13:47,480 Speaker 1: flat hood where the engine is. And then the top 244 00:13:47,620 --> 00:13:51,020 Speaker 1: tends to be flat and long. It looks, those cars 245 00:13:51,059 --> 00:13:52,920 Speaker 1: look like a coffin, if you can imagine the kind 246 00:13:52,960 --> 00:13:55,360 Speaker 1: of boxiness of them, right? Yeah. 247 00:13:55,440 --> 00:13:59,760 Speaker 2: Whereas the Beetle, it's incredibly round. And so there are 248 00:13:59,780 --> 00:14:01,990 Speaker 2: a few things going on here, right? One is at 249 00:14:02,040 --> 00:14:05,490 Speaker 2: the time, this roundness, I mean, it is in fact aerodynamic. 250 00:14:05,830 --> 00:14:10,829 Speaker 2: It conveyed modernity, right? And in design, the Germans loved modernity. 251 00:14:11,530 --> 00:14:13,949 Speaker 1: There's also a fact about a circle, which is a 252 00:14:14,010 --> 00:14:17,429 Speaker 1: circle has the most area inside it for the least 253 00:14:17,490 --> 00:14:20,410 Speaker 1: amount of circumference. So if you're building a car and 254 00:14:20,430 --> 00:14:22,630 Speaker 1: you're trying to make it cheap, you can use less 255 00:14:22,690 --> 00:14:26,330 Speaker 1: metal to make it circular and make it feel inside 256 00:14:26,350 --> 00:14:28,590 Speaker 1: like there's more space. There's one other photo here that's 257 00:14:28,630 --> 00:14:31,630 Speaker 1: amazing and it goes with what we're talking about. Same scene. 258 00:14:32,130 --> 00:14:36,250 Speaker 2: In this instance, Porsche is like lifting up the back, 259 00:14:36,330 --> 00:14:38,710 Speaker 2: what would be the trunk in a normal car. And 260 00:14:38,790 --> 00:14:42,790 Speaker 2: Hitler is like gazing over to look And he's delighted. 261 00:14:42,950 --> 00:14:46,780 Speaker 2: And I have to say, I find happy Hitler scarier 262 00:14:46,860 --> 00:14:47,700 Speaker 2: than angry Hitler. 263 00:14:47,980 --> 00:14:52,060 Speaker 1: He is kind of laughing his ass off because when 264 00:14:52,100 --> 00:14:54,520 Speaker 1: you open the trunk of the car, what you see, 265 00:14:54,600 --> 00:14:56,520 Speaker 1: in fact, is the engine. And I don't know if 266 00:14:56,540 --> 00:14:58,340 Speaker 1: you've ever seen this in a Volkswagen Beetle, but the 267 00:14:58,520 --> 00:15:01,680 Speaker 1: engine is in the back, which is an innovation at 268 00:15:01,700 --> 00:15:02,100 Speaker 1: the time. 269 00:15:02,220 --> 00:15:06,250 Speaker 2: And well, and also putting the engine in the back 270 00:15:06,430 --> 00:15:09,350 Speaker 2: is part of what allows the front to be so round, right? 271 00:15:09,370 --> 00:15:11,590 Speaker 2: And other cars at the time, The engine was in 272 00:15:11,620 --> 00:15:13,110 Speaker 2: the front. The radiator was in the front. So you 273 00:15:13,170 --> 00:15:18,390 Speaker 2: needed that big rectangle. And the air-cooled piece of this is. 274 00:15:18,430 --> 00:15:21,130 Speaker 1: Key because there's not like modern antifreeze yet. 275 00:15:21,490 --> 00:15:25,770 Speaker 2: The Germans don't have garages. And so it would basically 276 00:15:25,850 --> 00:15:29,200 Speaker 2: freeze in the winter. Particularly if you were like driving. 277 00:15:29,280 --> 00:15:32,860 Speaker 1: Say, to Moscow. Or just outside of Moscow. 15 miles 278 00:15:32,920 --> 00:15:35,480 Speaker 1: outside of Moscow. Yes, exactly. Let's do one more picture. 279 00:15:35,880 --> 00:15:38,010 Speaker 1: This one is from a few years later. Porsche has 280 00:15:38,050 --> 00:15:42,170 Speaker 1: now built a full size prototype of the Volkswagen Beetle. 281 00:15:42,330 --> 00:15:45,110 Speaker 1: It is a convertible. And you can see in this photo, 282 00:15:45,190 --> 00:15:47,470 Speaker 1: Hitler is sitting in the back. And this is a 283 00:15:47,530 --> 00:15:51,460 Speaker 1: detail I just love about this photo. There are bars 284 00:15:52,580 --> 00:15:54,780 Speaker 1: behind the front seat, the sort of bars that you 285 00:15:54,820 --> 00:15:57,860 Speaker 1: might see on a roller coaster, right? And these were 286 00:15:57,900 --> 00:15:59,940 Speaker 1: made so that Hitler could ride in the back of 287 00:16:00,000 --> 00:16:03,229 Speaker 1: a Volkswagen and stand up and hold on to the 288 00:16:03,270 --> 00:16:07,650 Speaker 1: bar with one hand and with the other hand. You 289 00:16:07,690 --> 00:16:10,910 Speaker 1: know what's going to happen with the other hand. Heil me. 290 00:16:11,190 --> 00:16:13,740 Speaker 1: Sieg Heil. I don't know what Hitler says when he 291 00:16:13,780 --> 00:16:17,720 Speaker 1: does the Heil Hitler. Yes. So it's the Heil Hitler mobile. 292 00:16:18,140 --> 00:16:21,000 Speaker 1: And of course he loves it. Of course he loves it. 293 00:16:21,250 --> 00:16:25,100 Speaker 1: But a prototype does not mean that you can actually 294 00:16:25,140 --> 00:16:27,680 Speaker 1: build this car or build it cheaply. That's what Porsche 295 00:16:27,720 --> 00:16:28,940 Speaker 1: is not telling him. Well, right. 296 00:16:29,020 --> 00:16:33,920 Speaker 2: And this is like one of the great lessons of manufacturing, right? 297 00:16:34,020 --> 00:16:37,650 Speaker 2: Like it's actually not that hard to build a prototype, right? 298 00:16:37,690 --> 00:16:38,470 Speaker 1: To design a car. 299 00:16:39,390 --> 00:16:42,890 Speaker 2: What they have to do now is build a factory, 300 00:16:43,210 --> 00:16:45,470 Speaker 2: which really means kind of invent a factory, right? Like 301 00:16:45,730 --> 00:16:50,410 Speaker 2: optimizing a factory to build quality products at scale cheaply 302 00:16:50,890 --> 00:16:53,450 Speaker 2: is a profoundly hard problem. 303 00:16:53,990 --> 00:16:56,510 Speaker 1: And this is the problem that the German auto industry 304 00:16:56,570 --> 00:16:58,270 Speaker 1: knew all along was going to be there. They knew 305 00:16:58,310 --> 00:17:00,970 Speaker 1: all along that, sure, you could design a prototype, but 306 00:17:01,010 --> 00:17:03,010 Speaker 1: you can't build it profitably and sell it at the 307 00:17:03,090 --> 00:17:05,230 Speaker 1: price Hitler insists on selling it at. 308 00:17:05,750 --> 00:17:11,950 Speaker 2: Mein Führer, we have some thoughts about the Volkswagen. Yeah, 309 00:17:11,970 --> 00:17:14,330 Speaker 2: they basically dragged their feet, right? Because they know, like, 310 00:17:14,650 --> 00:17:16,950 Speaker 2: to try and build this factory and make this car 311 00:17:17,090 --> 00:17:18,689 Speaker 2: and sell it at the right price would drive them 312 00:17:18,730 --> 00:17:19,290 Speaker 2: out of business. 313 00:17:19,869 --> 00:17:23,910 Speaker 1: So Hitler sees this happening, and he's like, no, we're 314 00:17:23,950 --> 00:17:26,520 Speaker 1: going to make this car. And so he goes back 315 00:17:26,560 --> 00:17:30,780 Speaker 1: to his favorite place, the auto show in 1936, and 316 00:17:30,820 --> 00:17:33,140 Speaker 1: gives another speech. I have to say, I just never 317 00:17:33,180 --> 00:17:35,920 Speaker 1: knew this part of Hitler's obsession. I mean, he did 318 00:17:35,940 --> 00:17:38,240 Speaker 1: give a lot of speeches. Yeah. We knew that part. 319 00:17:38,260 --> 00:17:40,380 Speaker 1: I just didn't know the auto show part of it, right? 320 00:17:40,440 --> 00:17:44,479 Speaker 1: And so here is what he says to the assembled people. 321 00:17:45,060 --> 00:17:49,500 Speaker 1: auto manufacturers. I have given orders to pursue the preparations 322 00:17:49,560 --> 00:17:54,419 Speaker 1: for the creation of the German people's car with relentless determination. 323 00:17:55,200 --> 00:17:59,240 Speaker 1: And I will bring them to a conclusion. And that, gentlemen, 324 00:17:59,600 --> 00:18:07,610 Speaker 1: will be a successful conclusion. Mein Führer? No, successful conclusion. 325 00:18:08,680 --> 00:18:11,430 Speaker 1: That quote, by the way, comes from Bernhard Reiger's great book, 326 00:18:11,750 --> 00:18:14,670 Speaker 1: The People's Car, A Global History of the Volkswagen Beetle. 327 00:18:15,500 --> 00:18:18,820 Speaker 1: So we're at this stalemate, right? Hitler wants the car. 328 00:18:19,460 --> 00:18:23,100 Speaker 2: None of the companies that build cars in Germany want 329 00:18:23,119 --> 00:18:29,580 Speaker 2: to build it. And into this stalemate steps the Deutsche Arbeitsfront, 330 00:18:30,720 --> 00:18:35,649 Speaker 2: which is the Nazis' national labor organization. And by this point, mid-30s, 331 00:18:35,810 --> 00:18:39,730 Speaker 2: they are rich and powerful because when Hitler took power, 332 00:18:39,810 --> 00:18:43,130 Speaker 2: what they did was they threw the heads of Germany's 333 00:18:43,250 --> 00:18:46,420 Speaker 2: unions into concentration camps and And took all the money 334 00:18:46,780 --> 00:18:47,460 Speaker 2: from the unions. 335 00:18:48,359 --> 00:18:50,090 Speaker 1: And instead of using that money for the benefit of 336 00:18:50,119 --> 00:18:53,490 Speaker 1: their union workers, they decide they're going to use this 337 00:18:53,630 --> 00:18:57,369 Speaker 1: money to get the Fuhrer's favor, right? To do what 338 00:18:57,410 --> 00:18:59,710 Speaker 1: he wants and to put money into a factory. 339 00:19:00,030 --> 00:19:02,310 Speaker 2: Yeah, they're going to build the factory to build the 340 00:19:02,350 --> 00:19:05,990 Speaker 2: people's car and to run the project they pick. 341 00:19:06,650 --> 00:19:10,450 Speaker 1: Some kiss ass they found off the street? Dr. Ferdinand Porsche. Yes. Yes. 342 00:19:10,800 --> 00:19:13,660 Speaker 1: So where are we now? Porsche has his design. Yes. 343 00:19:14,220 --> 00:19:16,700 Speaker 1: He has his source of capital. He has money. But 344 00:19:16,760 --> 00:19:22,520 Speaker 1: he lacks human capital, right? This very important piece of industrialization, 345 00:19:22,619 --> 00:19:26,300 Speaker 1: of progress, right? Nobody in Germany knows how to build 346 00:19:26,380 --> 00:19:29,030 Speaker 1: a factory that's efficient enough to make cars at the 347 00:19:29,090 --> 00:19:31,889 Speaker 1: scale that Hitler is dreaming of and as efficiently as 348 00:19:31,950 --> 00:19:34,470 Speaker 1: Hitler is dreaming of. Like, nobody knows how to do it. 349 00:19:35,090 --> 00:19:38,480 Speaker 1: This is one of those unappreciated facts about industrialization and 350 00:19:38,500 --> 00:19:41,159 Speaker 1: the Industrial Revolution. You think it's just the machines. It 351 00:19:41,220 --> 00:19:43,960 Speaker 1: is not the machines. It is people who can run 352 00:19:43,980 --> 00:19:46,919 Speaker 1: the machines in a really productive, effective way. And the 353 00:19:46,980 --> 00:19:48,520 Speaker 1: way you set up the machines and the way they 354 00:19:48,540 --> 00:19:53,090 Speaker 1: all communicate with each other is something that is proprietary knowledge. 355 00:19:53,119 --> 00:19:55,550 Speaker 1: It takes years to do. Yeah, I mean, the classic 356 00:19:55,950 --> 00:19:59,310 Speaker 1: framework for economic growth was land, labor, and capital. 357 00:19:59,730 --> 00:20:04,180 Speaker 2: And then, like, 100 years later, in, somebody, Paul Rumer, actually, 358 00:20:04,200 --> 00:20:07,240 Speaker 2: I think, was like, no, no, it's land, labor, capital, 359 00:20:07,530 --> 00:20:08,170 Speaker 2: and knowledge. 360 00:20:08,710 --> 00:20:12,250 Speaker 1: So who knows how to build a big factory with 361 00:20:12,350 --> 00:20:16,490 Speaker 1: an assembly line to make cars? Buy the hundreds of 362 00:20:16,550 --> 00:20:22,510 Speaker 1: thousands for the masses? Henry Ford, who literally invented mass 363 00:20:22,530 --> 00:20:25,150 Speaker 1: production of cars, kind of invented modern mass production. He 364 00:20:25,530 --> 00:20:28,540 Speaker 1: has perfected this in an amazing way. Yeah, of course, 365 00:20:28,600 --> 00:20:31,820 Speaker 1: Henry Ford is really famous for two things, that assembly 366 00:20:31,859 --> 00:20:36,870 Speaker 1: line you mentioned, and hating the Jews. Famous anti-Semite. 367 00:20:37,160 --> 00:20:39,630 Speaker 2: Yeah, and not just like, oh, everybody used to hate 368 00:20:39,670 --> 00:20:42,389 Speaker 2: the Jews. He really put his heart into it. 369 00:20:42,690 --> 00:20:45,869 Speaker 1: He really did. He industrialized the Jew-hating. 370 00:20:46,380 --> 00:20:50,660 Speaker 2: He paid for this newspaper, the Dearborn Independent, that published 371 00:20:50,720 --> 00:20:53,280 Speaker 2: this series called The International Jew. 372 00:20:53,720 --> 00:20:56,920 Speaker 1: Was that pro or con, International Jew? Well, let me clarify. 373 00:20:57,000 --> 00:21:00,320 Speaker 2: They consolidated the series into a book, and the book 374 00:21:00,340 --> 00:21:05,659 Speaker 2: was called The International Jew, The World's Foremost Problem. Hitler 375 00:21:05,700 --> 00:21:07,460 Speaker 2: was a fan of the book. He actually had copies 376 00:21:07,520 --> 00:21:10,740 Speaker 2: of it in his office in the 20s, translated into German. 377 00:21:10,810 --> 00:21:14,530 Speaker 2: And he also had on his wall, a portrait of 378 00:21:14,930 --> 00:21:18,510 Speaker 2: Mein Heinrich, of Henry Ford. You know, it's bad if 379 00:21:18,550 --> 00:21:21,630 Speaker 2: you have a picture of Adolf Hitler on your wall, but. 380 00:21:21,670 --> 00:21:24,820 Speaker 1: Even worse is if Adolf Hitler has a picture of 381 00:21:24,859 --> 00:21:28,080 Speaker 1: you on the wall. Like, that's as bad as it gets. 382 00:21:28,180 --> 00:21:30,080 Speaker 1: That's peak. So, yeah. So, Dr. 383 00:21:30,119 --> 00:21:32,139 Speaker 2: Portia and a few of his colleagues are able to 384 00:21:32,220 --> 00:21:38,000 Speaker 2: travel to Michigan to see Henry Ford's incredible plant, incredible 385 00:21:38,040 --> 00:21:41,669 Speaker 2: sort of temple of mass production and efficiency there. learn 386 00:21:41,730 --> 00:21:45,979 Speaker 2: from it, and go back to Germany to build the factory. 387 00:21:46,859 --> 00:21:50,210 Speaker 1: And what they saw really was a miracle at the time, 388 00:21:50,570 --> 00:21:54,850 Speaker 1: the River Rouge plant, where raw materials, like raw steel 389 00:21:54,869 --> 00:21:58,230 Speaker 1: would go in one end. They had power plants, transformational, 390 00:21:58,350 --> 00:22:02,300 Speaker 1: all of the industrial machinery. They had a foundry. And 391 00:22:02,560 --> 00:22:05,199 Speaker 1: cars roll out the other end. Yeah. Like, it is 392 00:22:05,220 --> 00:22:08,460 Speaker 1: a miracle at the time. And they think, oh, we 393 00:22:08,480 --> 00:22:10,600 Speaker 1: got to build this for the Führer. Yeah. And so 394 00:22:10,619 --> 00:22:13,520 Speaker 1: they go out to basically the countryside where nothing exists. 395 00:22:13,780 --> 00:22:14,960 Speaker 1: And they start building. 396 00:22:15,000 --> 00:22:18,010 Speaker 2: They build, you know, the factory, but they also build 397 00:22:18,730 --> 00:22:21,639 Speaker 2: a power plant and a foundry and houses where the 398 00:22:21,720 --> 00:22:22,760 Speaker 2: workers are going to work. 399 00:22:23,280 --> 00:22:26,520 Speaker 1: And the workers, by the way, are not just anybody. 400 00:22:26,900 --> 00:22:29,919 Speaker 2: The workers themselves are going to be the Volk. It's 401 00:22:29,940 --> 00:22:32,240 Speaker 2: going to be the car by the Volk for the Volk. 402 00:22:32,260 --> 00:22:35,240 Speaker 2: So everybody they're recruiting are like Hitler youth. 403 00:22:35,660 --> 00:22:39,010 Speaker 1: It is a fascinating experiment in a way, right? Because 404 00:22:39,550 --> 00:22:42,510 Speaker 1: the Henry Ford plant was the product of the free 405 00:22:42,550 --> 00:22:45,960 Speaker 1: market competition and Workers came and learned at the plant 406 00:22:45,980 --> 00:22:48,380 Speaker 1: but could work at other car manufacturers or bring back 407 00:22:48,420 --> 00:22:51,040 Speaker 1: skills from other car manufacturers to the Henry Ford plant. 408 00:22:51,520 --> 00:22:54,060 Speaker 1: Here's Hitler saying, well, I know what it should look like. 409 00:22:54,480 --> 00:22:58,370 Speaker 1: So let's just do it without competition. Let's not bring 410 00:22:58,410 --> 00:23:01,570 Speaker 1: the best workers, but the most loyal workers, the Aryan youth. Like, 411 00:23:01,590 --> 00:23:05,630 Speaker 1: let's bring them. Let's set the price. Let's make this happen. 412 00:23:05,790 --> 00:23:07,710 Speaker 2: The dream was to build 150,000 cars in the first year. 413 00:23:10,270 --> 00:23:13,310 Speaker 2: going up to 1.5 million cars a year, which is 414 00:23:13,330 --> 00:23:15,449 Speaker 2: like more cars than there are in all of. 415 00:23:15,490 --> 00:23:16,630 Speaker 1: Germany at this point. 416 00:23:17,109 --> 00:23:21,350 Speaker 2: And so in 1938, Hitler goes to this ceremony to 417 00:23:21,450 --> 00:23:24,890 Speaker 2: lay the cornerstone at the factory, and he gives, wait 418 00:23:24,930 --> 00:23:29,880 Speaker 2: for it, a speech defending the idea and talking about 419 00:23:29,940 --> 00:23:33,419 Speaker 2: the haters, actually. He says something like, you know, people 420 00:23:33,520 --> 00:23:36,900 Speaker 2: told me this was a terrible idea, impossible, but here 421 00:23:36,920 --> 00:23:39,990 Speaker 2: they are breaking ground on the factory. Hitler says, in fact... 422 00:23:40,530 --> 00:23:43,650 Speaker 2: I hate the word impossible. And around this point, they 423 00:23:43,670 --> 00:23:46,090 Speaker 2: decide to rename the car. They've just been calling it 424 00:23:46,130 --> 00:23:49,520 Speaker 2: the Volkswagen, like the Volkswagen, everything else. But around this time, 425 00:23:49,540 --> 00:23:50,750 Speaker 2: they decide they're going to call. 426 00:23:50,630 --> 00:23:57,379 Speaker 1: It the Kraft-Durch-Freude, the Strength Through Joy Wagon, KDF for short. 427 00:23:57,720 --> 00:23:59,500 Speaker 1: It's amazing. I just want to say it again, Strength 428 00:23:59,660 --> 00:24:02,560 Speaker 1: Through Joy. And this is 1938, so there's not a 429 00:24:02,560 --> 00:24:06,020 Speaker 1: lot of joy left these days in Germany. That's how 430 00:24:06,060 --> 00:24:09,060 Speaker 1: you know when they start to name the car Strength 431 00:24:09,180 --> 00:24:09,740 Speaker 1: Through Joy. 432 00:24:10,210 --> 00:24:15,010 Speaker 2: I mean, it is so, like, amazingly Orwellian. And you're like, oh, right, 433 00:24:15,070 --> 00:24:16,409 Speaker 2: this is what Orwell was writing about. 434 00:24:16,430 --> 00:24:18,550 Speaker 1: This is what he was talking about, strength through joy. 435 00:24:19,030 --> 00:24:21,649 Speaker 2: And in fact, KDF, strength through joy, was like a 436 00:24:21,750 --> 00:24:24,840 Speaker 2: brand for the Nazis at this point. There was, like, 437 00:24:25,150 --> 00:24:28,480 Speaker 2: KDF cruise ships and the Arbeitsfront, this labor group that 438 00:24:28,540 --> 00:24:32,480 Speaker 2: remembers bankrolling the factory. They're, like, into KDF. And part 439 00:24:32,500 --> 00:24:36,359 Speaker 2: of the idea, I think, is they are basically underpaying 440 00:24:36,400 --> 00:24:40,030 Speaker 2: the workers, but trying to, like, kind of make it 441 00:24:40,070 --> 00:24:42,449 Speaker 2: up or keep them happy enough by giving them these 442 00:24:42,490 --> 00:24:46,710 Speaker 2: little baubles like little KDF vacations and hopefully a car. 443 00:24:47,170 --> 00:24:49,869 Speaker 1: So at the end of this ceremony where they're going 444 00:24:49,890 --> 00:24:52,190 Speaker 1: to start building the factory, Hitler drives off in one 445 00:24:52,210 --> 00:24:55,820 Speaker 1: of these KDF cars. Ferdinand Porsche sat beside him. Porsche's 446 00:24:55,859 --> 00:25:00,100 Speaker 1: son is driving it. The crowd of 55,000 people goes wild. 447 00:25:00,119 --> 00:25:03,100 Speaker 1: The New York Times says this is a public relations coup. 448 00:25:03,520 --> 00:25:06,020 Speaker 1: And they call the car when they're describing it in 449 00:25:06,060 --> 00:25:11,350 Speaker 1: New York Times-ian language, A shiny little beetle. Aha. Which 450 00:25:11,410 --> 00:25:13,949 Speaker 1: is the first time we hear this referred to as 451 00:25:13,990 --> 00:25:14,730 Speaker 1: an adorable bug. 452 00:25:15,590 --> 00:25:18,770 Speaker 2: So they've just laid the cornerstone. The factory is not 453 00:25:18,910 --> 00:25:22,250 Speaker 2: built yet. But Dr. Porsche, not a real doctor, and 454 00:25:22,270 --> 00:25:26,629 Speaker 2: the Arbeitsfront, they have this clever sales model. Actually, a 455 00:25:26,830 --> 00:25:29,730 Speaker 2: model that Mein Heinrich Henry Ford. 456 00:25:29,470 --> 00:25:32,270 Speaker 1: Had used earlier. And that is this. 457 00:25:33,790 --> 00:25:37,040 Speaker 2: Ordinary Germans could sign up for like a savings plan. 458 00:25:37,520 --> 00:25:41,859 Speaker 2: where they pay in five Reichsmarks a week, which is like, 459 00:25:41,900 --> 00:25:44,960 Speaker 2: you know, a typical German makes maybe 25 Reichsmarks a week, 460 00:25:44,980 --> 00:25:48,780 Speaker 2: so like a significant chunk. And once they'd saved 750 461 00:25:48,780 --> 00:25:51,520 Speaker 2: Reichsmarks or so, so this is like a few years 462 00:25:51,560 --> 00:25:54,460 Speaker 2: of savings, they would get an order number for their 463 00:25:54,510 --> 00:25:57,690 Speaker 2: brand new Strength Through Joy Wagen. 464 00:25:58,310 --> 00:26:01,090 Speaker 1: I can see the advertising campaign. I'm assuming at this 465 00:26:01,130 --> 00:26:06,139 Speaker 1: point in 1938, it's a little... encouraged by authorities to 466 00:26:06,260 --> 00:26:08,580 Speaker 1: give up your wages for this car that may or 467 00:26:08,600 --> 00:26:12,380 Speaker 1: may not come? I mean, it is certainly good business. 468 00:26:12,760 --> 00:26:14,619 Speaker 2: Let's set aside at the point of the gun for 469 00:26:14,660 --> 00:26:17,300 Speaker 2: a moment just to say, if you can get people 470 00:26:17,359 --> 00:26:19,920 Speaker 2: to pay for a thing where you haven't even built 471 00:26:19,940 --> 00:26:22,000 Speaker 2: the factory, that is good for you, right? Because now 472 00:26:22,080 --> 00:26:24,580 Speaker 2: they are providing the capital that you need to build 473 00:26:24,600 --> 00:26:27,510 Speaker 2: the factory to deliver the car. And in fact, through 474 00:26:27,570 --> 00:26:33,460 Speaker 2: compulsion or otherwise, people do sign up. They have something 475 00:26:33,560 --> 00:26:37,480 Speaker 2: like 250,000 orders come in, which is a lot, although 476 00:26:37,510 --> 00:26:39,310 Speaker 2: to be clear, not nearly enough. 477 00:26:39,530 --> 00:26:43,290 Speaker 1: To make the car economically feasible, right? 478 00:26:43,310 --> 00:26:45,950 Speaker 2: They're going to need to build so many more if 479 00:26:45,990 --> 00:26:49,920 Speaker 2: they ever want to sell it at the 990 Reichsmarks 480 00:26:49,940 --> 00:26:52,420 Speaker 2: that Hitler said and not go bankrupt. 481 00:26:53,100 --> 00:26:55,960 Speaker 1: If you're taking notes at this point saying, well, I mean— 482 00:26:56,460 --> 00:26:58,220 Speaker 1: Kind of seems like a good idea. You're taking all 483 00:26:58,260 --> 00:27:00,600 Speaker 1: this money from people, building the factory, promising the cars. 484 00:27:00,980 --> 00:27:04,859 Speaker 1: They're actually creating construction jobs, you know? You had this 485 00:27:05,020 --> 00:27:09,230 Speaker 1: economically devastated Germany, which now is seeing action, right? People 486 00:27:09,250 --> 00:27:11,350 Speaker 1: have jobs, money is flowing, all this sort of stuff. 487 00:27:12,450 --> 00:27:14,909 Speaker 1: I should say that if you have a command and 488 00:27:14,950 --> 00:27:18,990 Speaker 1: control economy like this, you can make the economy have 489 00:27:19,010 --> 00:27:21,459 Speaker 1: a sort of sugar high very quickly, right? You can 490 00:27:21,500 --> 00:27:24,420 Speaker 1: get people to work in all of this. But long-term... 491 00:27:25,750 --> 00:27:28,909 Speaker 1: you are producing a car that costs more than you're 492 00:27:28,930 --> 00:27:31,330 Speaker 1: going to sell it for. Like eventually, like I think 493 00:27:31,369 --> 00:27:33,420 Speaker 1: Germany could have come up with a great cheap car, 494 00:27:33,460 --> 00:27:36,480 Speaker 1: but it would have required a lot of different companies 495 00:27:36,560 --> 00:27:40,620 Speaker 1: competing and finding, you know, incremental progress rather than this. 496 00:27:41,440 --> 00:27:42,810 Speaker 1: We're going to lay out the whole plan and do 497 00:27:42,850 --> 00:27:46,800 Speaker 1: it immediately. But you know, As it happens, long-term economic 498 00:27:46,859 --> 00:27:49,530 Speaker 1: growth is not going to be the main question in 499 00:27:49,590 --> 00:27:55,030 Speaker 1: Germany in the years following in 1938. Yes, because in 1939... 500 00:27:55,030 --> 00:27:57,980 Speaker 1: I know what happens. Germany invades Poland. It's World War II. 501 00:27:59,160 --> 00:28:01,119 Speaker 1: Let's take a quick break and then we'll continue with 502 00:28:01,140 --> 00:28:01,460 Speaker 1: the story. 503 00:28:25,420 --> 00:28:31,260 Speaker 2: And so initially, this KDF factory starts making just very 504 00:28:31,300 --> 00:28:36,250 Speaker 2: sort of classic war things like aircraft wings and fuel tanks. 505 00:28:36,770 --> 00:28:38,910 Speaker 2: But it's not going well. You know, it wasn't built 506 00:28:38,950 --> 00:28:41,430 Speaker 2: to build whatever aircraft wings. 507 00:28:41,750 --> 00:28:45,880 Speaker 1: And so Dr. Portia, not a real doctor, says, remember, Fuhrer, 508 00:28:45,920 --> 00:28:47,660 Speaker 1: you had the idea of like the machine guns and 509 00:28:47,700 --> 00:28:51,540 Speaker 1: like building it to, say, invade Poland. Why don't we 510 00:28:51,620 --> 00:28:54,200 Speaker 1: do that? Why don't we take this cute little round 511 00:28:54,460 --> 00:28:57,890 Speaker 1: Volkswagen and turn it into like an attack wagon? And 512 00:28:57,910 --> 00:28:59,590 Speaker 1: I've seen a picture of it, and it's amazing. You 513 00:28:59,610 --> 00:29:02,850 Speaker 1: can still see the beetle shape under it, but it 514 00:29:02,950 --> 00:29:06,970 Speaker 1: looks as if a hedgehog is sort of wearing medieval armor. 515 00:29:07,350 --> 00:29:10,750 Speaker 1: It's much more boxy. The car is jacked up a 516 00:29:10,790 --> 00:29:13,450 Speaker 1: little bit higher, you know, so that it could drive over... 517 00:29:13,810 --> 00:29:16,230 Speaker 1: I don't know, the fields of Poland and attack people? 518 00:29:16,530 --> 00:29:19,530 Speaker 1: They call it the kubelwagen, the bucket car. And there's 519 00:29:19,790 --> 00:29:22,690 Speaker 1: one modification that's just interesting to me that they make, 520 00:29:22,750 --> 00:29:24,790 Speaker 1: which is they actually have to make it so that 521 00:29:24,810 --> 00:29:27,850 Speaker 1: it can drive slower, I guess without stalling out, right? 522 00:29:28,300 --> 00:29:30,230 Speaker 1: Because it has to drive at the speed that the 523 00:29:30,300 --> 00:29:34,540 Speaker 1: army marches. So now they have the model of the 524 00:29:34,600 --> 00:29:36,960 Speaker 1: car they're going to build to further the war effort. 525 00:29:37,820 --> 00:29:41,220 Speaker 1: But all those Hitler youth who were working in that 526 00:29:41,320 --> 00:29:44,760 Speaker 1: KDF factory... are now off fighting the war. They are gone. 527 00:29:45,740 --> 00:29:49,970 Speaker 2: And so, here is where it starts to get much worse, frankly. 528 00:29:50,050 --> 00:29:53,100 Speaker 2: This is a story about the Nazis, perhaps unsurprisingly. it's 529 00:29:53,120 --> 00:29:54,020 Speaker 2: going to get bad right now. 530 00:29:54,100 --> 00:29:55,980 Speaker 1: So, so, so the Nazis. 531 00:29:55,680 --> 00:30:00,460 Speaker 2: Arranged for, uh, basically enslaved Polish women. Poland has been 532 00:30:00,620 --> 00:30:04,180 Speaker 2: conquered by this point, enslaved Polish women to be sent in, uh, 533 00:30:04,960 --> 00:30:12,180 Speaker 2: to be forced laborers at this factory. Uh, But it's 534 00:30:12,220 --> 00:30:15,220 Speaker 2: not going that well. Of course, you know, these women 535 00:30:15,330 --> 00:30:17,670 Speaker 2: are being forced to make a car that is being 536 00:30:17,730 --> 00:30:19,530 Speaker 2: used to subjugate their own country. 537 00:30:19,630 --> 00:30:23,010 Speaker 1: And they're untrained, and it's just not working out. 538 00:30:23,410 --> 00:30:25,350 Speaker 2: So they fire the guy who's running the factory, and 539 00:30:25,390 --> 00:30:28,850 Speaker 2: they bring in Portia's son-in-law, a guy named Anton Piech. 540 00:30:29,390 --> 00:30:32,470 Speaker 2: And he just brings in all of the enslaved workers 541 00:30:32,510 --> 00:30:37,220 Speaker 2: that he can. He goes from hundreds to thousands. There 542 00:30:37,320 --> 00:30:41,280 Speaker 2: are Soviet soldiers who had been taken prisoner. But they 543 00:30:41,320 --> 00:30:43,640 Speaker 2: are like so badly treated and starved by the time 544 00:30:43,680 --> 00:30:45,719 Speaker 2: they get there that they can't do much and they 545 00:30:45,770 --> 00:30:47,410 Speaker 2: start to literally die off. 546 00:30:48,170 --> 00:30:49,210 Speaker 1: There are Dutch. 547 00:30:49,050 --> 00:30:53,810 Speaker 2: Students who refuse to sign a loyalty pledge. They are 548 00:30:53,850 --> 00:30:56,910 Speaker 2: delivered to the factory. And more and more, they're bringing 549 00:30:57,010 --> 00:31:01,270 Speaker 2: in Jews from concentration camps along with their SS guards 550 00:31:01,470 --> 00:31:03,970 Speaker 2: who are making them work. At this point, the workers 551 00:31:03,990 --> 00:31:08,630 Speaker 2: are making the kuburwagens, right? They're also making military stoves, weapons, 552 00:31:08,730 --> 00:31:12,970 Speaker 2: parts for missiles. This is a pure military-industrial complex at 553 00:31:13,010 --> 00:31:16,790 Speaker 2: this point, and it is a profitable one. You know, 554 00:31:16,850 --> 00:31:20,430 Speaker 2: the Porsche family, they are charging the Nazis to do 555 00:31:20,530 --> 00:31:23,910 Speaker 2: all of this and making a huge profit because they're 556 00:31:23,930 --> 00:31:28,710 Speaker 2: not paying their workers, right? And there's one detail from 557 00:31:28,750 --> 00:31:31,490 Speaker 2: the official history of Volkswagen that I want to mention 558 00:31:31,540 --> 00:31:34,540 Speaker 2: about what happens at the factory around this time, and 559 00:31:34,580 --> 00:31:37,880 Speaker 2: that is this. Some of the enslaved women brought to 560 00:31:37,920 --> 00:31:41,580 Speaker 2: the factory were pregnant when they arrived or became pregnant later. 561 00:31:42,180 --> 00:31:45,570 Speaker 2: And what they started doing was taking the babies from 562 00:31:45,610 --> 00:31:48,130 Speaker 2: their mothers, you know, right after they were born. And 563 00:31:48,170 --> 00:31:52,250 Speaker 2: they said they were putting them in a nursery. But really, 564 00:31:52,790 --> 00:31:56,430 Speaker 2: the nursery was just abandoning them to die. Like here, 565 00:31:56,470 --> 00:31:58,190 Speaker 2: I'll quote from the official history. 566 00:31:58,270 --> 00:32:02,750 Speaker 1: It says, by the end of the war, 365 children 567 00:32:02,830 --> 00:32:07,850 Speaker 1: died as a result of neglect and inadequate nutrition. Basically, 568 00:32:08,090 --> 00:32:14,610 Speaker 1: every baby sent to this facility died. It's late 1944 569 00:32:14,610 --> 00:32:19,050 Speaker 1: at this point, 1945, early 1945, and the Allies are 570 00:32:19,130 --> 00:32:22,710 Speaker 1: closing in on Germany. They are starting to bomb the plant, 571 00:32:22,930 --> 00:32:26,970 Speaker 1: the Volkswagen plant. They're moving closer and closer to Germany itself. 572 00:32:27,270 --> 00:32:31,640 Speaker 2: So, Portia and his son-in-law, Piech, They've actually been like 573 00:32:31,820 --> 00:32:34,620 Speaker 2: squirreling away millions of Reichsmarks this whole time, and. 574 00:32:34,580 --> 00:32:37,880 Speaker 1: They flee to Austria. And this is the chance, as 575 00:32:37,920 --> 00:32:40,240 Speaker 1: the plant is falling apart, that the prisoners there have 576 00:32:40,260 --> 00:32:43,180 Speaker 1: been waiting for. They take over what's left of the factory, 577 00:32:43,240 --> 00:32:46,580 Speaker 1: and they start to hunt down the worst of their oppressors, 578 00:32:47,140 --> 00:32:50,850 Speaker 1: the guards and the management that were like enslaving them. 579 00:32:50,970 --> 00:32:55,130 Speaker 1: And then finally, sometime around April 15th of 1945, the Americans... 580 00:32:57,120 --> 00:32:58,720 Speaker 1: Occupy the Volkswagen factory. 581 00:32:58,940 --> 00:33:02,540 Speaker 2: They find the starving enslaved workforce and the nursery where 582 00:33:02,580 --> 00:33:03,520 Speaker 2: the babies had died. 583 00:33:04,060 --> 00:33:07,480 Speaker 1: You know, they see everything. The Nazis have lost. The 584 00:33:07,570 --> 00:33:11,030 Speaker 1: Allies have won. And one of the reasons the Allies 585 00:33:11,050 --> 00:33:16,030 Speaker 1: won was what Hitler wanted. The Allies outproduced the Germans, 586 00:33:16,310 --> 00:33:20,810 Speaker 1: largely using factories owned by GM, Chrysler, and even Henry Ford. 587 00:33:21,190 --> 00:33:24,370 Speaker 1: Mein Heinrich, right? They built the bombers and the tanks themselves. 588 00:33:24,710 --> 00:33:27,970 Speaker 1: and the Jeeps that allowed the US, the allies, to 589 00:33:27,990 --> 00:33:28,390 Speaker 1: win the war. 590 00:33:28,730 --> 00:33:31,230 Speaker 2: Yeah, I mean, there is this, there's this phrase people use, 591 00:33:31,570 --> 00:33:34,710 Speaker 2: the arsenal of democracy, right? And it's really interesting, like 592 00:33:35,120 --> 00:33:38,480 Speaker 2: the American industrial economy, and in particular, the car makers 593 00:33:38,520 --> 00:33:42,460 Speaker 2: that had developed in this competitive private market for decades, 594 00:33:42,840 --> 00:33:46,850 Speaker 2: when the war came, were turned to basically government production 595 00:33:46,900 --> 00:33:50,190 Speaker 2: to make military vehicles. But because of what they'd honed 596 00:33:50,230 --> 00:33:53,070 Speaker 2: in the private market, they were amazing at it. And they, 597 00:33:53,900 --> 00:33:57,680 Speaker 2: outproduced the Nazis, and that was key to winning the war. 598 00:33:57,840 --> 00:34:00,660 Speaker 1: So how does this utter failure of a plan by 599 00:34:00,740 --> 00:34:05,380 Speaker 1: Adolf Hitler, no people's car, destroyed factory, a legacy of evil, 600 00:34:05,640 --> 00:34:08,290 Speaker 1: how does that company go on to make a cute 601 00:34:08,330 --> 00:34:13,509 Speaker 1: car beloved by Americans? That is the story for next time, 602 00:34:13,750 --> 00:34:16,510 Speaker 1: part two of The Beetle, when we bring this story 603 00:34:16,569 --> 00:34:21,350 Speaker 1: to a conclusion, and that, gentlemen, will be a successful conclusion. 604 00:34:23,270 --> 00:34:26,290 Speaker 1: Appreciate the commitment to the bet. Yeah, try it. Our 605 00:34:26,330 --> 00:34:30,100 Speaker 1: producer is Gabriel Hunter-Chang. Our engineer is Sarah Bruguier. And 606 00:34:30,239 --> 00:34:33,140 Speaker 1: our showrunner is Ryan Dilley. I'm Jacob Goldstein. And I'm 607 00:34:33,160 --> 00:34:35,500 Speaker 1: Robert Smith. We'll be back next week with another episode 608 00:34:35,660 --> 00:34:40,170 Speaker 1: of Business History. A show about the history. Wait for it. 609 00:34:41,950 --> 00:34:42,370 Speaker 1: Of business.