Essay : Could BMC have saved Borgward?
Here’s an interesting hypothesis in counter-factual history.
Robert Leitch poses the question you may not have already asked yourself – could BMC have saved Borgward?
Illustrations: Robert Leitch and Sam Skelton
Could BMC have saved Borgward?
BORGWARD and I shared but sixteen months of the last century. Some years would pass between the demise of the Hanseatic motor industry’s standard bearer in July 1961 and my becoming sufficiently mature, or possibly immature, to set out on my lifelong mission to identify and find out whatever I could about every car on the road.
In central Scotland in the mid-1960s, imported cars were an unusual sight, apart from the big sellers such as the VW Beetle, Fiat 500, and Renault Dauphine. Nevertheless the Isabella, a relative rarity, had already made its impression – smart, but by then rather dated looking mid-sized saloons and estates not dissimilar to American-influenced Hillmans, Vauxhalls, and Rovers which were its British-made contemporaries. I was told that Borgward was German, and that the cars were no longer made.
The finality of that must have made an impression – I already knew enough to understand that Wolseley, Riley, Singer and Humber, to name a few examples were no longer real car manufacturers, but nameplates retained to appeal to customers who thought themselves somewhat above ordinary Austins, Morrises and Hillmans. A slow death by badge-engineering was not to be Borgward’s destiny. Even forty years ago, I realised that some fate far grimmer must have befallen the maker of these cars with their friendly faces and distinctive diamond-shaped badges.
Move on to the early years of this century. With the passage of time, British Isabella sightings have inevitably become far rarer, although occasional trips to Germany brought first-hand encounters with those Borgward group products which crossed the North Sea in far smaller numbers, such as this Lloyd Arabella spotted in Berlin. We are firmly in the internet age, and the number and content of Borgward websites worldwide is living witness to the enduring enthusiasm for the cars, nearly one and a half human generations after that momentous day when the last Isabella left the factory in Sebaldsbrück, near Bremen. That car bore a mourning wreath with the words “Du warst zu gut für diese Welt” – You were too good for this world – a recognition of the car’s extraordinary place in the affections of those who produced it.
The circumstances surrounding the group’s July 1961 collapse are naturally discussed and speculated on in much detail. Marius Venz’s authoritative book on the marque prefaces the shameful tale as follows: “One can describe the end of the Borgward Group in a few paragraphs. Countless books, articles and treatises have all been written on all the details. Nobody, however, has ever been able to reveal who orchestrated the whole nasty business. There are plenty of theories. No one seriously suggests that there was no dirty work behind the scenes.”
The fall of Borgward
Taking up Mr. Venz’s challenge in matter of brevity, what happened was this. Throughout 1960, it had become widely known that the Borgward Group’s liquidity had been compromised by a number of circumstances, including the high cost of development and tooling for the flat-four Lloyd Arabella and the Big Six (P100) saloon, subsequent warranty claims resulting from the over-hasty introduction of both cars. The group was also still bearing the residual costs of a highly ambitious, but abortive helicopter project led by renowned aeronautical engineer Professor Heinrich Focke. A worldwide economic downturn aggravated the company’s difficulties. The new Big Six failed to meet sales expectations, and United States demand in 1960 for the ageing Isabella, the company’s most consistent export performer, dropped to less than one-third of the previous year’s numbers. A bank overdraft facility of DM30 million was negotiated, with the Bremen State Government acting as guarantors.
At the end of 1960, an article in the German news magazine Der Spiegel claimed that Borgward was insolvent. The factual basis of the article and its sources of information, are questioned to this day. The fall-out from this led to the Bremen State Government withdrawing their financial guarantee, and on 30th January 1961, Senator Karl Eggers, Minister of Finance, announced their intention to intervene. Carl Borgward was faced with the choice of bankruptcy or handing the company to the state without financial recompense. He acceded to the second choice, no doubt expecting that this would be the best hope for the continuation of his life’s work.
On 10th February 1961, Borgward was re-constituted as a state-owned company, under an administrator, Dr. Johannes Semler. Scarcely a year before, Dr. Semler had ‘rescued’ BMW. In other circumstances this may have inspired optimism about Borgward’s future. BMW’s position as a car manufacturer had seemed utterly hopeless, with a product line comprising the expensive and dated V8-engined “Baroque Angel” cars, and, at the other extreme, a range of Isetta bubble cars built under licence. The Isetta-based “one-box” 600 of 1957 did little to close the gap, and the pretty Michelotti-styled 700, introduced in 1959, looked like poor value against competing small Opels, Fords and the VW Beetle. Yet by 1961 BMW were re-financed and had a new product plan with high hopes of recovery.
Any optimism that Dr. Semler could repeat his magic in Bremen would quickly dissolve as the tight-knit and ruthless network which drove the German Wirtschaftswunder (Economic Miracle) seemingly moved to thwart Borgward’s recovery at every turn. No commitment was given to guarantee the company’s future as a going concern, and various expressions of interest from competitors, and suggestions for a public flotation were disregarded. It soon became clear that Borgward were on an inexorable course to liquidation – dissolution of the company was the sole commitment made by Semler and the Bremen Government when the group passed into state ownership. The process of selling off the company’s assets began on 28 July 1961. As a matter of record, when the assets were sold, all creditors were able to be paid in full, demonstrating the falsehood of the magazine article which was seen by many as pushing the company over the edge.
Anyone who has followed the fortunes of Europe’s major volume car manufacturers over the last forty years will recall that almost every one has, at some time over the period, fallen back on state aid or guarantees, and in some cases full-scale nationalisation, or has been assimilated into another company within the automotive sector. Only the collapse of MG Rover in 2005 compares with the sudden and shocking demise of the Borgward Group, and, unlike Borgward, it had long before been recognised that the British company had no hope of an independent future.
The ‘dirty work’ allegations make reference to a number of factors. Bremen shipbuilding interests resented the growth of the motor industry, which robbed them of skilled workers. There was known personal enmity between the socialist Senator Eggers, and Carl Borgward, a supporter of the centre-right CDU. There was also little love lost between the ambitious Borgward and other German automobile companies as a result of the Bremen firm’s undercutting of rivals’ prices in pursuit of conquest sales. No German manufacturer would have benefited from Borgward’s demise more than BMW, whose Semler-brokered rescue plan centred on the high-quality mid-range Neue Klasse sports saloons, aimed directly into the Isabella’s market sector. Given this product plan, the appointment of Dr. Semler as administrator of Borgward seems, at the very least, to have represented a conflict of interest.
Apart from finding themselves with a clear field for the Neue Klasse 1500 when it became available in 1962, BMW were to benefit in other ways, enticing large numbers of Borgward engineers south to Munich to play a major part in their recovery. It is a standing joke amongst Borgward enthusiasts that BMW stands for Borgward macht weiter – Borgward continues.
Borgward and BMC – kindred spirits?
All of this is background to one of the many ‘what might have beens’ of European automotive history, found almost as an aside on the highly informative www.borgward.org.uk website. “On 4th February 1961 the Bremen Senate took over the company and Dr. Borgward resigned. Companies such as BMC were interested in buying the company but they stalled to get the best deal. Finally a co-operative set up by the Borgward dealership, suppliers and customers failed.”
It’s the only mention I’ve seen of BMC’s interest in Borgward, and gives no hint of their seriousness. The wording suggests that the British possibly proposed to “Shanghai” the designs, or “Nanjing” the production machinery, rather than having any plan to use the Bremen concern as a bridgehead into mainland Europe.
The similarities between the two groups are intriguing. Borgward was by far the smaller company, producing 105,000 vehicles in 1959. In the same year, BMC built a slightly larger number of their best-selling Morris Minor alone. However, both companies had multi-brand portfolios, and as well as covering the car spectrum from the cheapest cars on the market to large luxury saloons, produced vans, trucks and buses.
Carl F W Borgward appears as a kindred spirit of Herbert Austin and William Morris, ruthless and autocratic to the point that Borgward has been described as “the world’s largest one-man car company”, but also practical and inventive, with an instinct for what the customer wanted. The fabric-bodied two-stroke Lloyds built from 1950 were exactly the type of sub-prime vehicle Austin, Morris, and later Leonard Lord wanted to drive off the roads – a popular German comment was “Wer den Tod nicht scheut, fährt Lloyd” (“He who is not afraid of death, drives a Lloyd”). The Lloyd LP series has to be seen in the context of a desperate post-war economic situation, restrictions on materials supply, and an unstoppable surge in demand for private transport. Another point of commonality between BMC and Borgward was a cavalier approach to pricing and profit, consistently putting volume before net earnings. Regardless, the two-stroke contraptions of the early 1950s helped to fund the development of the Borgward Isabella, the BMW 3-series or Mercedes-Benz C-Class of the mid 1950s.
The Isabella was thorough but relatively orthodox in its engineering, only independent rear suspension setting it apart from its contemporaries, yet long before the late-fifties Issigonis revolution at BMC, Borgward were pioneers of automotive innovation. Some highlights include:
1950 – Hansa-matic automatic transmission (Borgward Hansa 1500)
1950 – Tranverse engine and front wheel drive (Goliath GP700)
1951 – Bosch Fuel injection (Goliath GP700)
1952 – Diesel engine option (Hansa 1800)
1955 – Overhead camshaft engine (Lloyd LP600)
1955 – Six seater mini-MPV (Lloyd Theodor – a year before the Fiat Multipla)
1957 – Water cooled horizontally opposed four cylinder engine and front wheel drive (Goliath 1100)
1958 – Twin cam 16-valve four cylinder racing engine – early protoypes used desmodromic valve operation.
1960 – Self-levelling air suspension (Borgward P100)
In the hard world of the automotive industry, those who endeavour to advance the art are often made to suffer for their presumption. Citroën, Lancia and NSU are the classic examples, but the rapid and terminal downfall of the Borgward company still stands as a shameful chapter in post WWII German industrial history. In marked contrast to William Morris, Herbert Austin, and Leonard Lord, all ennobled by their grateful nation, Carl Borgward died the archetypal ‘broken man’ on 28 July 1963, two years to the day after the company to which he had devoted his life was put into liquidation.
Just supposing – Borgward’s BMC future
Given the forces apparently in operation within Germany to prevent Borgward’s recovery, the chances of a foreign manufacturer taking over were slender indeed. Nevertheless, the very fact that BMC were expressing an interest raises some fascinating “what ifs”. Here Sam Skelton and I present our 1960s BMC / Borgward portfolio.
Borgward Mirabella 1100 / 1300
The first quick fix for BMC’s German Patient would be a Bremen-built version of the widely admired ADO16, with styling differentiation following the pattern of the 1963 Innocenti Morris IM3. Given that the ADO16 front end had been designed to accommodate Duncan Stuart’s narrow angle V4, there was potential to accommodate a longitudinal flat four in place of the A-Series. Borgward were developing a 1300cc version of their engine, if more ‘stretch’ was available the E-series may never have been required, and BMC’s engineering philosophy could have moved forward in a rather different direction.
Borgward Hansa 1800 and 2200
This ADO 17 could have filled the gap between the Isabella and the P100 neatly. Again differentiation is the key, mixing a variant of the Austin / Morris front end and Australian X6 rear to create a rather formal car in the character of the 1950s Hansa 1500, 1800, and 2400.
Vanden Plas Princess 2300
The Grosser Borgward, the P100, with its “Airswing” suspension was set to challenge Mercedes-Benz, but was hampered by early quality problems and by over-ornate styling which rapidly became unfashionable. Almost identical in dimensions to the ADO61 Austin 3-Litre, the P100 could have given BMC a ready-made large saloon with real chassis sophistication in the early 1960s. The illustration shows how replacement of late fifties German Transatlantic Baroque with English restraint, could have created a serious Rover P5 and Mercedes Benz S-Class rival.
MG Magnette and Riley 4/92
A leap of imagination is required here. Pietro Frua’s studio had been involved with the Borgward group since 1958 and were working on the Isabella replacement in 1961, as well as a smaller Hansa 1300 saloon which was close to production. Visually at least, the new Isabella was the Borgward that got away, with Frua’s styling re-emerging for the 1963 Glas 1500/1700 saloon. With their elegant and uncluttered Italian lines, and advanced overhead camshaft engines, the Glas cars soon earned the reputation of being the German Alfa, but were to be short lived – an over-ambitious investment programme resulted in the company being taken over by fellow Bavarians BMW in 1966, and European sales ending in 1967 after which the tooling was removed to South Africa, and the car sold as a BMW 1800SA until 1974.
In our alternative reality, the new Isabella proceeded into production, and the design, which looked for all the world like the Maserati Quattroporte’s baby brother, found a further role in the BMC range as a true replacement for Gerald Palmer’s MG Magnette ZB and Wolseley 15/50, something the Farina Magnette was patently not. It is worth noting that the Palmer cars were direct rivals of the Isabella, others being the 1954 Alfa Romeo Giulietta and 1956 Volvo Amazon. Twenty years on, Germany was all but dominant this premium mid-range sector, a position consolidated with the arrival in 1982 of the Mercedes-Benz W201 190E, produced in the same Sebaldsbrück factory which, 21 years before, had built the Borgward Isabella.