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Dr. Porsche’s 1,001 Horsepower “Beetle”

In the early days of the automobile, Ferdinand Porsche, himself an Austrian, served as a designer at the Daimler motorcar manufacturing branch there. He was a top-notch engineer, as well. In those days, car makers’ reputations relied significantly upon the success of their products on the race tracks; and Porsche’s own creations for Daimler were remarkably adept at winning. His record had a direct and positive bearing on the sales of Daimler’s compact cars for everyday use. He had a love affair with little cars that stayed with him for life.

In 1923, Porsche moved himself and his family to Daimler’s headquarters in Stuttgart, where he was appointed technical director of the entire company. His son (also Ferdinand, nicknamed “Ferry”), then only 16 years old, was recognized as having a special talent for design and was given special permission to work at the factory with his father. Ferdinand Sr. continued to pursue his main interest in designing small cars, but ran afoul of management’s changing imperatives after the merger of Daimler with Benz, and the ensuing focus on large, luxurious automobiles. The relationship could no longer be sustained, so Porsche departed and opened his own design office in Stuttgart in 1931. Meanwhile, his son Ferry had been working for Bosch while studying physics and engineering; and when Ferdinand Senior left Daimler-Benz to strike out for himself, Ferry joined him there. From that time forward, the two remained a father-and-son team of uncommon talent.

Of course, the twenties and the early thirties were years of great difficulty in Germany. The Weimar Republic had failed. Hyperinflation ruled the day. My grandmother, who was born near Munich, told me of returning to Germany in 1922 and seeing, with her own eyes, people hauling paper money – loaded into wheelbarrows!

Hitler’s National Socialist party did not enjoy a majority in the Reichstag in the early Thirties, but it was the largest minority. President Hindenburg thought, mistakenly, that he might be able to co-opt this charismatic troublemaker by appointing him Chancellor of Germany. It proved to be the opening wedge in a power-grab which overrode democratic impulses by means of fear, intimidation, and sheer physical force. The deed was done; there was no turning back. The designs of the tyrant were enabled in some measure by the felt need of an exhausted populace for stability and the promise of better times to come.

One of Hitler’s early domestic priorities was the design and production of a small car for the masses, a “people’s car.” A design competition ensued. Porsche was there. He was able to draw upon his experience in designing and engineering small cars for the former Daimler company. Even so, he was not alone; his son Ferry was with him, together with a group of talented engineers whom he recruited from past years. One entrant proposed a small car with a radial engine, which proved impractical, possibly from a cooling standpoint. Porsche’s design called for a very small two-door, four-passenger car with an air-cooled “flat four” cylinder engine mounted in the rear. Hitler liked it; enough said. The “people’s car” was born as a State enterprise, featuring a one-liter engine churning out 23.5 horsepower.

Porsche became one of Hitler’s favorites. He was showered with recognition and munificences. Ferry continued to rise in importance and prominence in the company, which designed and produced successful race cars in addition to the “Volkswagen” and vehicles for the German military.

Hitler had taken a fancy to Grand Prix race cars as a propaganda tool. Daimler entered the competition to design and build a new generation of the breed. The existing Audi automobile company and three others combined to form the new “Auto Union” Grand Prix race car manufacturing and racing company. Porsche became Auto Union’s chief designer, on contract, while still managing Volkswagen. The resulting Daimler and Auto Union race cars blew away the competition in the 1930’s, overseas and here in the United States. I even remember the name of one of the premier German drivers of that time: Maury Rose. I remember those cars, too. They were huge. And they were loud. They didn’t sound like the high-pitched buzzing bumblebees of today’s race cars; the engines were much slower-turning. The locus must have been Roosevelt Raceway on Long Island. The Auto Union cars sported the four intertwined circles on the grille, just as Audi cars do today. (I had also been present at the adjacent Roosevelt Field when Lindbergh took off for France some years earlier. I was present, but I hadn’t been born quite yet. My parents told me and my siblings later, many times, that Lindy j-u-u-u-u-s-t cleared the telephone wires at the end of the runway).

An entire new Volkswagen factory was built and opened at Wolfsburg. Although the car enjoyed considerable sales success in Germany, Hitler’s greater ambitions got in the way; which, of course, led to massive destruction, the end of the “thousand-year Reich” fantasy, the suicide of Hitler in a Berlin bunker, and – unfortunately – the imprisonment of Ferdinand Porsche as a war criminal for 20 months in a dank old jail in Dijon, which adversely affected his health. No doubt, Hitler never knew that Porsche had helped a Jewish employee escape from Germany. A fellow prisoner was his son-in-law Anton Piëch, a Viennese lawyer who was married to Louise Porsche, Ferry’s sister.

Ferry Porsche was able to raise the 500,000 francs bail which was required for his own release from custody. (The State-owned Volkswagen enterprise was booty of war. The British Government delivered ownership of the company to the German State in 1948, which offered shares in the company on the public stock market in 1960). Ferry moved back to Austria and set up a machining and repair shop in Gmund with his sister Louise. Eventually, he won a contract to design a race car for the Cisitalia racing team, and then for another, to be called the Porsche 360 Cisitalia. This car was to have a mid-mounted engine and four-wheel drive. It marked the first time that the family name had ever been attached to a vehicle.

Ferry could not forever divorce himself from his father’s love affair with small cars. Accordingly, while working on the Cisitalia race cars he also found time to design the Porsche 356, and arranged with the Volkswagen company to allow him to build it on the “Beetle’s” chassis and mechanical underpinnings. Meantime, the engine had been enhanced so as to produce 35 horsepower. The first 50 cars were built by hand at Gmund, with aluminum bodies. 6 more were sent to Switzerland, where cabriolet bodies were installed on the chassis. Ferry also eventually assembled sufficient bail in order to effectuate release of his father Ferdinand and of Anton Piëch from prison, which was accomplished on August 1, 1947. Upon arrival in Austria, Ferdinand inspected Ferry’s designs for the Porsche 360 Cisitalia and for the Porsche 356, and announced that he would have created the same designs. Although he was back again in the midst of the car manufacturing business, his months in prison had damaged his health. He died in January 1951.

(The Porsche 356 was a success! Almost 78,000 were made and sold by 1965).

Meanwhile, the Beetle design was aging. It needed serious upgrading. The general manager of Volkswagen came to Ferry with a proposal that was too good to turn down:

Ferry would improve the Beetle.

In exchange, Volkswagen would provide to him:

A percentage of the profits derived from the sale of every improved Beetle;

All of the raw materials for building Ferry’s sports cars;

Use of Volkswagen’s worldwide network of dealers for sale of Porsche cars;

Use of Volkswagen’s worldwide network of technical support;

Ferry would be the only Volkswagen dealer in Austria.

Done! That sealed a co-dependency which persists to this day. Ferry brought his company back to Stuttgart. He resumed production of the Porsche 356 and started work on a new engine which was to be called the Carrera. He raced a special version of the 356 at LeMans in 1951. The car won in its category. He won again at Targa Florio in 1959 and at LeMans in 1970 with a model called the 917.

By now, the 356 was aging too; and there was demand for a new model. The result was the acclaimed 911, which has been the longest-running sports car in production, ever. The 911 was basically the 356 fitted with the new liquid-cooled six-cylinder Carrera engine, which featured an astounding 300 horsepower.

Ferry continued to run the company, which he changed from a limited partnership to the German equivalent of a “corporation” in 1972. Even so, the two related families – Porsche and Piëch – continued to retain and maintain effective control of the company. When Ferry died in 1998, his son Ferdinand Alexander took his place at the helm.

Meanwhile, Anton and Louise (Porsche) Piëch’s son Ferdinand Karl Piëch, also an automotive engineer, had served at the Porsche company, where he was instrumental in the development of the Porsche 917. He developed a Diesel engine for Mercedes while in private engineering practice, moved to the Audi subsidiary of Volkswagen, and then, in 1993, to the Volkswagen Group itself, where he became Chairman and CEO. He retired from the Board of Management in 2002, but he still serves in an advisory capacity as Chairman of the Supervisory Board. In other words, he is very much On The Scene at Volkswagen. All of this, it may be noted, proceeds apace while he himself still owns about 13% of the Porsche company. He has thirteen children by four women, so the family tradition may continue for a while. There is a strict unwritten rule in the family that nobody talks to the press.

While Mr. Piëch was in Management at Volkswagen, he was at least partly responsible for several successes: the New Beetle in 1998 (really a Volkswagen Golf in disguise), increased market penetration by Audi, creation of a perception in the public mind of justification for premium pricing, and the acquisition of the Bentley, Bugatti, and Lamborghini brands. His biggest gaffe was the acquisition of Rolls-Royce. The devil was in the details. He thought he was buying both the car manufacturing facility and the name; but as it turned out, the right to the name belonged to BMW. Another probable mistake is the Volkswagen Phaeton, a super-luxury car intended to compete with the Mercedes-Benz Maybach. (Ah, there’s another memory-jogger. I remember the low growl of the Hindenburg’s Maybach Diesel engines as it passed low over my house).

At Volkswagen, Piëch laid the groundwork for repeated doses of quite sensational news. The Bugatti marque claimed a fine record in racing, but had lain dormant for decades. He set in motion a reinvention of the name. Independently (?), the Porsche company, for reasons of its own, possibly at least as defensive in nature as it may have been geared to the hope of profit, acquired 18.5% of Volkswagen in October 2005. Thus, for the first time, the Porsche family had (indirectly) become part owners of the ongoing business which had produced Dr. Porsche’s first Beetle. For the first time, “their name was on the building,” though in small letters. Then, in March 2007, Porsche raised that ownership interest almost to 31%. It announced that it had done so in order to preclude any competitor from buying a large ownership interest in Volkswagen and to preclude any attempt to sell off the Volkswagen Group in pieces, which might have been a threat to Porsche’s dependency on Volkswagen. In March of this year, 2008, Porsche announced that it intends to increase its ownership of Volkswagen to 51%, at the same time that it announced its intention to acquire more than a half-interest in Scania, the Swedish truck manufacturer controlled by the Wallenberg family. Last month (September 2008), Porsche announced that it already owns 35% of the Volkswagen Group, which is probably a controlling interest by anyone’s reckoning; and that it would acquire Audi from Volkswagen outright! (All by itself, that maneuver might have given any raider pause). Probably some of those additional Volkswagen shares were acquired via the open Frankfurt market; but my guess is that substantial blocks were acquired in private transactions. (In Germany, cross-ownership interests are much more common than they are in the United States, quite possibly to an extent which would be illegal here. Deutsche Bank’s fingers are everywhere; Lufthansa’s are not far behind). There are legal issues outstanding; but Porsche has made its moves aggressively and it is up to others, whether governments or companies or common folk, to say them nay. “Fait accompli.” The Porsche family name now sits (figuratively) in bright lights atop Volkswagen’s headquarters building. The sign is invisible, but it’s there, just like the little people who scurry around in the Black Forest not all that far away.

All the while, that Bugatti adventure has been strumming along in the background. Mr. Piëch’s vision was to build an over-the-top superfast luxury car bearing the revered Bugatti nameplate. Volkswagen has done that. The result is the Bugatti Veyron, featuring an 8 liter, 16-cylinder, quad-turbocharged engine delivering 1,001 horsepower while delivering a top speed of 253 miles per hour, all of this bargain-priced at 1.1 million Euros, more in North America. The car, which is named after a driver for the original Bugatti company who won the 24 Hours of LeMans in 1939, is handmade in Alsace. Only 500 will be built. Two have been wrecked. At top speed, the car achieves a fuel economy of 2.05 miles per gallon, which would drain the tank in less than 13 minutes. But take comfort: there’s a safety factor built-in there, since the Michelin tires would last for a full 15 minutes.

(It may be self-satisfying to make fun of the sheer excess of the thing; but honestly now, mate, wouldn’t you love to have that car in your hands even for ten minutes?)

So there you are, Dr. Porsche. Your family still has a controlling interest in the Porsche sports car business, and now it also controls the thriving company which made your original Beetle. On the way by, they raised the horsepower of your car a bit, from 23.5 to 1,001. But that’s really a side issue. The big story is that Porsche plus Volkswagen must be considered, effectively, as a single enterprise. If you and Ferry could just come back for ten minutes and look around……

William Kurtz October 17, 2008 http://www.candlewave.com

BMW – a reputation built on quality without compromise

 As an experienced driver, you know the importance of keeping your BMW in tip-top condition. Regular servicing will extend your car’s life and identify defects before they become catastrophic.

When you consider the history of BMW and how the Company has built its global reputation for prestige and performance excellence, booking a BMW service that is conducted with care and precision is vitally important in retaining the characteristics of this prestige car.

BMW facts you may not know

BMW has its roots in pre-First World War German aviation.

Gustav Otto, son of the inventor of the four-stroke internal combustion engine, set up an aircraft factory and training school in 1910. However, after persistent quality problems with production, his business was bought by a consortium in 1916. The company became known as Bayerische Flugzeugwerke AG (BFW) and began manufacturing aircraft under licence from Albatros Werke. It soon became the largest aircraft manufacturer in Bavaria, but at the end of the First World War demand collapsed.

Meanwhile, in 1913 an engine designer Karl Rapp had set up an aircraft engine manufacturing company, but vibration problems with their own engines meant that they switched production to Austro-Daimler V12 engines, under licence. A man called Franz Josef Popp was put in to supervise the manufacturing. He managed to persuade Karl Rapp to employ a talented design engineer from Daimler, Max Friz. Friz quickly designed a new engine and made such an impact with the investors, that Karl Rapp was ousted from the business in 1917. At this point the company name was changed from Rapp Motorenwerke GmbH to Bayerische Motorenwerke BmbH (BMW).

However, in December 1918, BMW was forced to close down by the government at the end of the First World War. However, in less than three months BMW was allowed to reopen and began designing a new array of engines, although the company was forced to cease aircraft engine production. At this point, an Austrian financier, Camillo Castiglioni, had become the majority shareholder in BMW.

In the summer of 1919, BMW began building brake assemblies under licence from Knorr-Bremse AG, and around a year later Castiglioni sold his shares in BMW to Knorr-Bremse.

Following the sale of his stake in BMW, Castiglioni became interested in purchasing BFW which he completed in 1922. On the back of this, he moved to purchase back the BMW name and engine building division from Knorr-Bremse. He was successful, and with the merger of BFW and BMW, under the BMW name, he also secured the design and management skills of Max Friz and Franz Josef Popp, plus valuable engine drawings and patents.

BMW began production of replacement engines, whilst Castiglioni did a lucrative deal with the Czechs to licence the production of BMW aircraft engines for use by their military.

During the 1920s, BMW supplied Russia with aircraft engines and Castiglioni, as well as being the majority shareholder, siphoned off a brokerage fee on every transaction to his ‘private’ companies.

Along with military engines, BMW began to successfully manufacture small agricultural engines and motorcycles, starting with the R 32 in 1923. These formed the basis of the project to design a BMW production car in 1925. Then in 1928 the company expanded into full car production with the purchase of the Eisenach Car Factory that made the Dixi (or Austin Seven manufactured under license). The car became known as the BMW 3/15 and it was not long before BMW was producing its own designs.

However, Castiglioni’s business dealings got himself and BMW into trouble. After selling a majority shareholding to Deutsche Bank in 1926, to raise personal funds, his irregular commission payments were duly revealed. He settled out of court with a large payment back to BMW and stepped down from the board. In 1929, he sold the remainder of his shared to Deutsche Bank to prop up his finances.

The Castiglioni affair had also cost BMW. The Russian government became aware of the ‘commission’ payments and demanded compensation. BMW handed over a licence to produce the BMW VI engine for free and relations with the Russians came to an end in the early 1930s.

After successful expansion of the motorcycle and car businesses in the 1930s, BMW was forced to abandon civilian production by the National Socialist Party during the Second World War and focus on the production of aircraft engines. This included the use of forced labour.

Towards the end of the war, BMW was hit hard by allied bombing and when the war ended, the sites in eastern Germany were seized by the Russians. Meanwhile, whilst BMW survived in the West, they were banned from manufacturing engines for three years and BMW car plans and their chief designer Fritz Fiedler were taken to England to begin Bristol Cars. And so it was not until 1948 that production of BMW motorcycles recommenced and not until 1952 that car production was started again.

The initial post-war car models, such as the 507 and 503, were not highly profitable and in 1959, BMW discussed selling the business to Daimler-Benz. This was an unpopular move with the workforce, and fortunately Chairman Kurt Golda increased his stake in the company to secure BMW’s independence.

During the 1960s the release of more sporty models spelt success for BMW. The BMW 1500 (that followed the BMW 700) led to the BMW 1600 and BMW 1800 models and in 1967 two door and convertible models that became known as the BMW 02 series. These developments eventually led to the creation of the famous BMW 3 series.

The company expanded, with new production facilities and a new headquarters in Munich.

Going into the 1970s, the BMW 5 series replaced the sedans, the coupes were replaced with the BMW 3 series and a new BMW 7 series was launched, thereby giving BMW three distinct sports sedan ranges that continued into the 1990s.

BMW became a global brand in prestige car manufacturing and sales increased 18 times. Production expanded from Germany and has spread to across continents, including facilities in the UK, America, South Africa and India. The company has also formed partnerships over time with Russian and Chinese producers.

In the mid 1990s, BMW bought Rover from British Aerospace. However, the company struggled to find a role for the English brands and make a profit. In 2000 it disposed of Rover to Phoenix Venture Holdings and sold the Land Rover brand to Ford. However, BMW retained the Mini, Triumph and other brands. BMW has since successfully rekindled the Mini brand and also gone on to secure full use of the Rolls Royce brand (in 2003).

From its humble origins as pre-First World War makers of aircraft and aircraft engines, BMW has survived as a result of post-war entrepreneurial spirit and grown rapidly to become a major global player in the prestige car market.

Book your BMW service with confidence

So when you book your next BMW service, you can be confident that Service A Car understands the heritage of BMW and conducts BMW servicing with the passion and precision your prestige car deserves.

Happy motoring,

Howard.

Chairman Service A Car