HN 2: The British and their Works

For all its criticism of the bureaucratic export regulations,
Volkswagen escaped the effects of the "dollar clause". The JEIA
provisions scheduled payment at the old rate for those export
obligations which had been entered into prior to the currency
reform. As Nordhoff remarked with satisfaction, the Volkswagenwerk
was "the only German automobile factory to have
had the courage" in the spring of 1948 to conclude long-term
export agreements, even though "in those months actually all
the omens were against it". If these contracts were terminated,
the general manager dramatically declared, this would be "the
final death" of exports. 218 Indeed the company continued to
export on the old terms and conditions until the spring of
1950. Six months later Volkswagen was able to reduce both the
domestic price and the rate-adjusted export price. The export
business was now helping to reduce costs through a better
utilisation of capacities, and to establish a foothold in the
foreign markets. 219
At the distributors’ conference in January 1949 Heinrich
Nordhoff was able to present a positive balance sheet. Up to that
point 2,000 cars had been exported to Holland, 1,500 to
Switzerland, 1,050 to Belgium and 100 to Luxembourg.
According to the official registrations which had been received
the day before, Volkswagen was the top importer in Switzerland
with 155 cars, followed by the British Standard with 120
"Vanguards". Opel managed a grand total of 12 cars. The general
manager therefore requested the dealers to appreciate that 700
to 1,000 Volkswagens would still have to be earmarked for the
export market. It would be irresponsible, he said, "if we were to
fail to exploit this once-in-a-lifetime opportunity". 220 Attacks
from the British automotive industry, which publicly raised the
spectre of dangers for its own export business emanating from
Volkswagen, were countered by Nordhoff with simple figures.
The British had exported 180,000 vehicles in the previous year,
whereas the Volkswagenwerk had a share of just 2.5 per cent of
total exports. Nordhoff commented on the fears stirred up in the
British press by quoting the words of a Swiss newspaper: "The
British Lion must have become a strange animal, to tremble at
the yapping of such a little dog". 221
By liberating the market forces, the currency reform provided
the trigger that the automotive industry needed for its growth
spurt, sensitive as it was to economic trends. A free product
market with fixed prices for raw materials put an end to West
Germany’s bottleneck economy, and the international economy
was gradually moving towards a global free trade system. This
development was especially beneficial to the Volkswagenwerk,
which was utilising only one tenth of its annual capacity
of 250,000 vehicles. Increased capacity exploitation meant increased
profitability, and the enormous European demand for
vehicles resulting from extensive wartime losses now opened
up expansion potential beyond anyone’s wildest dreams.
With other countries begging for cars, the Volkswagenwerk was
ready to deliver.
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