Thinking Small: The Long, Strange Trip of the Volkswagen Beetle

by Andrea Hiott

  There was no Technical Development Department before Nordhoff decided that a much greater emphasis needed to be placed on improving and developing the inner workings of the car. This was the kind of necessary initiative that Ivan Hirst had found lacking in Hermann Münch, the man who led the plant before Heinrich arrived. Nordhoff was also constantly on the lookout for new kinds of machinery and made steps toward bringing in new equipment as soon as possible, so that the teams working to improve and innovate the car had all they might need. The war had actually destroyed many old procedures and obsolescent equipment, thus moving production forward was not always a matter of rebuilding so much as it was of finding new, fresh methods. The situation required creativity, and Nordhoff noticed this early on and took advantage of it, giving workers the feeling that they were starting something new together, and being clear about his desire to rearrange the plant in a way that would raise the quality of the product while simultaneously reducing costs.

  But that wasn’t the only reshuffling that was done. Nordhoff also reconfigured the budget; 1949 was the first year the factory was given a firm fiscal plan based on selling 40,000 vehicles. Each individual department within the larger company was aware of this plan and of the part it must play. This kind of clarity had a very big effect on the change in efficiency at the plant. Expenditures were now accounted for, as was every piece of machinery and every tool within the plant. The attention to such details paid off considerably: Manufacturing costs of the Volkswagen car had been 3,312 DM at the start of 1949 and by the end of that same year they were 3,072 DM—more than 200 DM under budget, an amount that quickly added up. And that was for cars sold within the country. Exported cars also came in below their budgeted cost, the new fiscal plans resulting in a decrease of 138 DM per car. The budget was also set up so that a quarter of all profits went back into the factory to be used for updates and repairs. Looking all day at destroyed walls and crumbling roofs was not good for the psyche: To work as a whole, the optics needed to be whole too.

  All these changes carried over to the management staff as well. Heinrich wasted no time in reconfiguring the power structure and delegating new people to new tasks, a rather unpopular move, but one he felt had to be done. In the postwar chaos, positions had been filled in a feverish dash. Now it was time to reevaluate. If things were going to work on a long-term basis, Nordhoff thought, there needed to be a structure based on skill. While he would always need the previous managers and the Works Council more than he liked to admit, as the months passed Nordhoff weaned himself from them as much as possible, putting aside the temptation (or some might say, the responsibility) of trying to please former executives and office staff. According to historians Mommsen and Grieger, a kind of “industrial feudalism”1 ensued as Nordhoff created a management that revolved around himself.

  In this new structure, much of the decision-making power was located with him, the general manager. Beneath him, much like the organization of General Motors that had been developed by Sloan, there were the heads of the departments such as production, personnel, and technical development. While such structure is common today, it revolutionized the Volkswagen factory and introduced a very modern and new kind of organization into German industry, one pioneered in the country by Opel under GM. But at the time of all this new structure, the factory was still an occupied organization, and though they now stepped far into the background, the British board remained at the helm: Heinrich was ultimately accountable to them.

  Nordhoff was a complicated mix of Germany and America; he’d learned a great deal from both countries. From Germany, there came a desire for quality work and austere order, but so too there came a belief in authority that was not always neutral. From America, there came the innovative ideals of taking care of the customer and the worker, of service and attention to the conditions of labor within a plant—ideas that Heinrich often implemented more sincerely than their American originators once had. Nordhoff believed, for example, that Henry Ford’s initial practice of respecting the workers and giving them a good quality of life—allowing them the opportunity to be customers of the products of their own labor—had been the secret behind Ford’s success. But he could also see how such practices fall apart, the workers themselves becoming power-hungry and losing track of their own best interests and goals. Ford had revolutionized working conditions in large part to solve the problem of attrition, of the large turnover rate. This decision had been praised as an act of good will—and it was an act of good will—but because it was also an act with an eye to maximize profits, it wasn’t long before the profits became the sole focus and the workers again had to fight to keep and improve their rights.

  Nordhoff didn’t want unions and strikes and violence. To avoid them he’d have to try to give his workers what they wanted and needed before they even knew they wanted or needed it, and he’d have to do it with more awareness: Reciprocal altruism worked, as Ford’s early years had proven, but it would last only if it truly took care of both sides (management and workers) proportionately. Thus, Nordhoff not only made radical moves in terms of payment and benefits for the workers, he also saw to more personal reformations, like ensuring that his workers’ homes were equipped with real beds (up until May 1949, many individual workers slept on wood-shaving-filled sacks).

  Nordhoff also noticed the conflicted feelings his men had about being occupied, and thus about the British staff, and he was able to capitalize on those feelings: He was “one of them,” a statement that could generate great feelings of loyalty in those days. Nordhoff understood the need many had for an authoritative figure—much as Ivan Hirst himself had noticed when he arrived—and Heinrich was in a position to use that feeling to inspire a new sense of cohesion between the staff and the management of the plant; in essence, between the workers and himself. It was exactly what the factory needed: a figure of authority who believed in American-style business ideas but nevertheless was grounded in a German idea of work. An American could not have done it. But nor could a German who was still looking to the models of his country’s past for solutions for the future.

  Still, some asked: If Nordhoff became the figurehead of the plant, what would be his checks and balances? Some felt his policy of “workers first” was coupled with an authoritarianism that kept most decisions solely in his hands. But Nordhoff saw it more as “tough love,” and he rather controversially made efforts to reduce the sway of the unions and Works Council, as he felt that he knew what the workers needed and could more quickly give them what they wanted. He was, in effect, centralizing management. In a later article written in praise of the plant, The Times of London would refer to Nordhoff’s style as “cradle to grave paternalism.”2

  It was hard to argue with Heinrich at the time because he was exceeding all expectations, proving magnanimous with the workers and earning their trust. A wages commission was set up, and with the important contribution of the Works Council, the factory saw a 50 percent increase for the lower wage groups by the end of Nordhoff’s first eighteen months. Heinrich also set up a system that gave workers a 4 percent share in the company’s yearly profit. In the early days, he installed a new kitchen and bartered cars with local farmers in order to get enough food for the VW workers to at least have one good meal a day. He also began regular “family-style” meetings in the colossal warehouse-like halls of the factory, where all the workers would put down their tools for a period and meet to hear Nordhoff speak. In these speeches, he used “we” instead of “I” and phrases that had been used by past Communist organizations in Germany—“work comrades”3 or “workmates” or “workers community”—seemed to take on another meaning in his leading of the postwar democratically inclined plant. He wanted to use words people knew, but redefine them: In doing so, he was redefining one’s concept of work. “I am firmly convinced that there is no more natural an alliance,”4 he told the men, “than that between a factory management and its employees.” It would sound like propaganda, except for the fact that he
actually meant what he said.

  Nordhoff (right) and a Volkswagen factory worker inspect one of the cars. (photo credit 35.1)

  At one of the first of these meetings, he spoke to the same group of men who were building one car every 300 hours and said his goal for them was one hundred cars in one hour. One hundred cars in an hour! In another session, he talked of the factory’s potential to prosper—an idea that felt fantastical at the time—and promised that Volkswagen could become one of the best car companies in Europe. Upon hearing this, the workers groaned. And yet, they also couldn’t help but smile. They liked what he was saying, even if it did sound far-fetched. By setting such a high bar, Nordhoff brought a new energy into the plant. And after half a year on the job, there was a noticeable difference there, even Ivan Hirst had to admit as much. The factory had a full working German management and board; it looked and moved like an industry again. More men were coming to work regularly. And they were discussing Nordhoff on the lines. Nordhoff would often walk through the plant, not something German managers did at the time, and interact with the workers. He spoke in an even tone, never raising his voice, but his authority was clear, and his words and manner were unpretentious. Nordhoff knew, and openly said, that he would rise or fall with this factory, and with his men. And those words were true. Nordhoff had stepped into a very unusual moment in history, and he was meeting it with unusual means. No one was sure yet just what they were moving toward. The British were slowly relinquishing authority it seemed, but what would happen from there? After all of Hitler’s motivating speeches, inspiring unity and pride through a paternal stance was a method that could not help but remind people of the very recent past. Many wondered if Nordhoff was seeing the situation clearly, or if he was overstepping his bounds. His intentions seemed honest, but were they? Only time would tell.

  The doors of DDB officially opened on June 1, 1949. It was a hot summer day in New York City. The air in the stairwell was thick, but the mood was light. “Nothing will come between us,”1 Bill Bernbach said to his new partners, “Not even punctuation.” And he meant it literally: The name they’d chosen was a name without a comma or a dash—Doyle Dane Bernbach, just like that. It was the first time the masthead of an advertising agency had been written in such a way; a small difference perhaps, but one already hinting at changes to come. Seeing that name appear in the directory of advertising agencies, Madison Avenue had to stop for a moment and scratch its head. Who were these guys? No commas between their names? Was that a gross mistake, or had they done it on purpose?

  “There was a spirit of high adventure,”2 Phyllis Robinson said of those early days at the agency. When Bernbach, Doyle, Dane, Gage, and Robinson moved into their first office together at 350 Madison Avenue, an 1,800-square-foot space a flight above the building’s last elevator stop, Bill had just turned thirty-eight years old. He was the youngest of the partners, but he was clearly the agency’s creative head. The unusual young men and women that DDB would soon hire would be coming there because of him, lining up outside his office, wanting his opinion on their ideas and projects. When Bill got excited about an ad, the whole room would seem to glow from his enthusiasm. It made his small, loyal team work hard for him, stay late, come in early; they probably would have slept there if they’d had the chance. “We did it to see Bill’s eyes light up,”3 Robert Gage once said.

  Bill was perhaps the only one who did not stay late at work—he always caught the train back to Brooklyn in time to have dinner with Evelyn and the boys—but he was totally and completely present every moment he was in the office. His door was always open. He would listen to any idea, take anyone’s call. His eyes were everywhere. He was aware of every campaign DDB did. His presence set the temperature and mood of any room. Some people hid from him when they weren’t ready to take what he would surely dish out: the truth.

  In fact, telling the truth was just about the only rule at DDB, and that one rule was challenging enough to keep them all occupied, every moment of the day. The partners had agreed that they would start their agency with a clean slate. They’d do work that inspired them. When creating their accounts, they would still use research, but they would weigh that research with their own intuition, remaining aware that just because something had worked once didn’t mean it was the only option, or even the best option, for a new situation that might have since emerged. In other words: Just because something was right yesterday, that doesn’t necessarily make it right for today (but it could!). They weren’t in it just to get rich, to schmooze and booze high-profile accounts—they’d done all that. They were looking for a deeper nourishment now, a way to creatively have an effect on the world. They were still a business—tuned in to their customers and accounts—but a business like none Madison Avenue had seen before. Even they did not know exactly where they were heading, only that it felt like they were heading in the right direction.

  Whatever direction it was, it wasn’t fancy. The office space was clean and neat, but little time was delegated to decorating (they would later use their ads to decorate their walls). When clients visited, Bill didn’t want them to choose DDB because of the fancy art or pricey whiskey or quality leather couches, but rather because of the agency’s approach. Decoration would only distract people from the thing that mattered: the work. Some clients might take such minimalism as an affront, but no matter, those weren’t the kind of clients DDB wanted. DDB was going to be about the people, the relationships, the ads; perhaps an obvious, but nevertheless unique, idea. According to Bill, the client is not always right. In his eyes, it was important for his team at DDB to trust their own ideas and work, and he wanted the clients to give them room to do that. Bill knew that the clients would always have a big say—clearly they knew their products best—but he wanted the attitude of the clients they took on to be one of respect, not of power plays and veiled threats.

  For that reason, every person creating an ad within the walls of DDB knew they could count on Bill to get behind them if what they were doing was honest and coming from the heart. If Bernbach thought their work was good, he’d back them, even if it meant losing a client, and he wasn’t afraid of taking risks. Feeling that vibe from the boss reduced the debilitating fear of upsetting the client that so many on Madison Avenue must have suffered from at that time; Bill’s trust opened up a space for real creativity, gave people the freedom to try and fail. It wasn’t about cultivating giant egos—though giant egos would remain a peril of the trade—it was about finding a way to connect. In short, with DDB, Bernbach wanted to flip the focus. Instead of asking what the client or the customer wanted, DDB asked: What do we have to give? Ads were meant for an audience, and it was the audience that needed to be at the center of the ads, not the client. By focusing on the audience, Bill thought, his firm would inevitably do well by the client too: if those looking at the ads were taken care of, that could only bode well for the subject of that ad.

  Bill would walk through Manhattan, or sit on the train, or watch people reading their magazines, and he soon realized that most of them were hardly even glancing at the ads surrounding them. In fact, they were often trying to avoid them, as if ads were an intrusion into their day, a giant sign of how polished and lovely their lives should be. In the heat of a stressful workday, those ads always seemed too far from the reality—giant homes and smiling faces and beautiful ladies draped across the newest models of cars; such images created a status anxiety that only added to the frustration of everyday life. They also seemed to be using the same faces and colors, the same landscapes, the same words, as if there was a perfect, protected world; if people just kept spending, maybe they would get to that happy place too. The ads were meant to inspire, but they turned into a burden instead. People felt guilty for not being as happy as they were told they should be in such a modern and technologically advanced age. People jealously looked at their neighbors and colleagues and imagined they were the only ones who hadn’t managed to reach that ideal happy place. But that place didn’t exis
t, Bill knew; it had never existed, and it never would. With DDB, Bill wanted to make ads that would pleasantly surprise, something that would catch the eye, relate to the customer and remind them that they were alive. Just look at all this opportunity, all these walls and billboards and train station walls, Bill thought. And what are we doing with it? What are we really giving people here? To him, it felt like a terrible waste.

  Theirs was an easy enterprise to mock: too idealistic, too dreamy, too hard to bring to life. And for DDB, there would be days when they would wonder if their goals were naïve. After all, the system that had been in place in advertising agencies before them seemed to be pervasive for a reason: It worked. Why go against the norm? Because creativity required it: “Rules are what the artist breaks,” Bernbach said. “The memorable never emerged from a formula.” And breaking the rules at DDB meant being disciplined and confident enough to find something worth standing behind, even though it might be an angle or idea that had never been tried. It would be a lot of work, especially considering they had no precedent, but because Bill had thought it through so fully, the emotion and inspiration he felt weren’t running away with him, and he was ready for whatever might come. Now that he had his own agency, he could change things from the ground up. To do new work, they’d have to create a whole new structure as well. They’d have to think strange.