Troubling History: Volkswagen


Volkswagen (VW) was founded by the Nazis on May 28, 1937, as part of Adolf Hitler’s vision to enable every German family to own their own car. Originally operated by the German Labor Front, Volkswagen exploited more than 15,000 slave laborers from nearby concentration camps. In 1944, one VW plant engineer traveled to Auschwitz to select 300 skilled Jewish metalworkers to make military vehicles for the reich.

As World War ii was ending, Volkswagen sent two representatives—Drs. Ellenmayer and Kardos—to meet S.S. Obergruppenfuhrer Dr. Scheid and other Nazi industrialists to plan for Germany’s economic recovery after Hitler’s ultimate defeat. Allied spies found out about this plan to rebuild the Nazi empire, yet American policymakers still decided to make Volkswagen the focus of their effort to resuscitate the German auto industry.

VW remains a mammoth company to this day, and it retains considerable clout with the German government.

In 2017, the U.S. accused German carmakers Volkswagen, Daimler AG, bmw, Audi and Porsche of pursuing a coordinated strategy of misrepresenting emission results to make diesel cars more competitive at home and abroad. They violated the U.S. antitrust law. Within the European Union, several of these companies were accused of working together as a cartel.

Der Spiegel reported that starting in 2006, Daimler, bmw, Audi and VW held secret meetings to agree on a common strategy to deceive U.S. government environmental agencies. A lot of evidence indicated that these companies, the chief of which was Volkswagen, cheated (at the cost of emitting more carbon dioxide) to gain a competitive advantage.

The German government talks endlessly about the need to protect the environment. Nevertheless, these companies escaped with light punishment. Germany’s automotive industry, by far the biggest in Europe, supports 800,000 German jobs and accounts for 5 percent of the nation’s overall economic output.

Initially, 5 million diesel cars would have been banned from the streets for failing to meet the carbon dioxide target. Instead the carmakers and the government agreed that a software update would suffice. Spiegel Online pointed out that this solution is “the most inexpensive for the carmakers and the worst for human lungs.”

The German government let VW off with light punishments. In the U.S., Volkswagen sold 580,000 affected vehicles and was forced to pay $25 billion in fines, penalties and other damages. In Europe, it sold 8 million vehicles, yet Germany fined it only $1.1 billion.