Opinion : Rootes and the Volkswagen Beetle

Was the Beetle really that great? And was Sir William Rootes really that foolish?

This opinion piece was originally published in the Canadian paper Old Autos. It is reproduced here – with some subsequent updates – with the kind permission of that publication.

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Volkswagen Beetle: did Rootes really miss a trick?

The title got your attention. So let me say, right off, yes, the Beetle ended up great. With more than 21 million built – five million more than the Ford Model T, fifteen million more than the BMC Mini – how could it not be seen as great?

But what about the second part of the title? It relates to the fact that Sir William Rootes, later Lord Rootes, turned down the opportunity to take ownership of Volkswagen – free – soon after the end of World War II. Was that foolish? Before you answer I’d suggest you consider the circumstances of 1945.

In the weeks leading up to the end of the war in Europe, Hitler refused to hear, and his SS henchmen were quick to execute, anyone who talked of defeat or surrender. Even after devastating Allied bombing of German cities, and the country being overrun by Allied ground forces, by which time defeat was clearly inevitable, Hitler insisted that the fight must go on to the very last man. However, after he committed suicide, the surrender was signed, on 8 May 1945. Germany’s economy was shattered, people were without housing, starving was widespread because food production and distribution were in chaos, and workplaces, businesses and industrial plants were in ruins, so unemployment was rampant.

A few weeks after the surrender, the Allies divided Germany into four military-occupied sectors – Russian, American, French and British (the last-named including involvement by Australia, Canada, New Zealand and South Africa). Stalin was already implementing his own plans for the Russian sector, but in the other three sectors it was recognised that there was urgent need to restore and maintain order, coping with the task of corralling and feeding surrendered German troops and likewise dealing with displaced persons and people fleeing the Russian sector.

Rebuilding Germany, rebuilding Wolfsburg

Not long before Germany had been the enemy, but there was now realisation of a need to help them take on the rebuilding of their country: restoring housing, hospitals and schools, resuscitating agriculture, transportation, business and industry. On the other hand no firm overall strategy had yet been formulated by the USA, France and Britain; one proposal being given thought was the punitive US Morgenthau plan which would severely inhibit any chance of Germany rebuilding its powerful industries.

In the British sector lay Wolfsburg, a city created in the late 1930s from a greenfield site to be the home of Hitler’s ‘people’s car’ – the Volkswagen. Wolfsburg consisted of a Nazi Government-funded plant plus nearby housing for workers. The Beetle (as the car would subsequently be nick-named) had been designed and developed over several years by Dr. Ferdinand Porsche.

By 1938 it was close to ready for production and a couple of hundred had been built off-site in Stuttgart. However, before the Wolfsburg plant was at the stage where production could start, Hitler precipitated WWII. When Wolfsburg finally came ready in 1940 it was put to use building the Kubelwagen, a small, open, military personnel-carrier on the Beetle platform, and an amphibious version called the Schwimmkubel. As the war progressed Wolfsburg also produced mines, aircraft parts and V1 flying bombs, so inevitably it did not escape Allied bombing.

How to restart Beetle production

Now fast forward to a few weeks after the surrender: a unit of the British Army’s Royal Electrical and Mechanical Engineers, commanded by a Major Ivan Hirst, was dispatched to Wolfsburg to set up a station for servicing army trucks. What Hirst found was a plant in virtual ruin, roofless and flooded, and a city with widespread starvation, chronic unemployment and destroyed morale.

The exception to that were some key Volkswagenwerk employees who, hoping that the Beetle might survive, had more-or-less hand-built two cars. Hirst, impressed and keen to see employment created, at least temporarily, sent a Stuttgart-built Beetle to his CO’s HQ, with the suggestion that if materials could be made available, Wolfsburg could be refurbished to build some Beetles for the occupying forces; at the time there was an acute shortage of staff cars since manufacturers in Britain were still switching back from war production. The CO agreed and Hirst, with other British officers and Wolfsburg managers, engineers and line-workers, tackled the task of making the plant workable.

However, in the meantime, Morgenthau plan thinking was dominant, an eventual effect of which would be the closing of Wolfsburg. And there was the understandable thought that the British Army should not be in the business of building cars. So it was decided to see if a British car manufacturer would be interested in taking over Volkswagen – free – to build the Beetle for itself. And this is where Sir William Rootes of the Rootes Group (Humber, Hillman, Sunbeam-Talbot, and Commer/Karrier trucks) came into the picture.

When Rootes met Volkswagen

Disclosure: A lot of information I give here can be found in the book ‘Small Wonder – The Amazing Story of the Volkswagen’ by Walter Henry Nelson, first published in 1964 by Little, Brown and Company. That book was a best-seller and is a must-read for any Beetle fan. In my opinion, Nelson’s unbridled enthusiasm for the Beetle sometimes has to be taken with a large pinch of salt, but nevertheless I can recommend the book as a fascinating read. However, my assessment of the reason for the success of the Beetle differs quite a bit from Nelson’s.

A further disclosure: I‘m biased. From 1956-1959 I was a pupil-apprentice at Rootes in Coventry, I then worked there for another three years, after which I transferred to Toronto and worked for Rootes Canada until it was merged into Chrysler. I never met Sir William, but anyone who knows about the decades-long success of the company that he and his brother, Reginald, had built will know that Sir William was no fool.

To explore the possibility of sale – actually giveaway – of Volkswagen to a British manufacturer, a Beetle was shipped to Britain for examination, and a commission, led by Sir William, travelled to Germany to assess Wolfsburg. The conclusion arrived at was that there was just too much unsuitable to make the proposition feasible. Now it so happens that, in Nelson’s account, Sir William is the only person identified by name and, probably as a result of that, he has for evermore been singled out as a fool by those whose hindsight – and possible penchant for Brit-bashing – far exceeds their understanding of the circumstances. Sir William was, in fact, by no means the only individual involved, nor was the Rootes Group the only manufacturer which chose to shy away from acquiring Volkswagen.

It wasn’t just Rootes

In the book ‘Morris – The Cars and the Company’, Haynes Publishing, 2013, author Jon Pressnell records that Nuffield staff at Cowley road-tested the Beetle shipped from Germany and emphatically rejected it. And it seems likely that Austin and Standard, maybe even Rover and Singer, also had the opportunity to examine the car and volunteer to take it over, although I haven’t found documentation of such. Note furthermore that it wasn’t only British-owned manufacturers who turned down the offer: in June 1948 Ernest Breech, Ford USA Board Chairman, and Henry Ford II, met with the British authorities in Germany to consider a proposal that Ford take over Volkswagen. Breech’s advice to Henry II: ‘I don’t think what we’re being offered is worth a dime.’

So were all these people fools? Let’s look at it from the perspective of the time. First, the business case. In Britain, following the end of the war, there was severe pent-up demand for new cars, with waiting lists over a year long. The emphasis was on getting back into production as quickly as possible. What would be the justification for embarking on the build of a totally new and unknown car, with a radically different engine and gearbox, requiring new production methods, new tooling and new suppliers, when it was relatively easy to speedily resume production of what were essentially existing models?

And marketability of the very unorthodox Volkswagen was totally untested, especially since there was the very real stigma of its Hitler/Nazi origin. Demand for warmed-over pre-war British models would, of course, eventually lessen, but promising new designs were already sketches or on drawing boards: Alec Issigonis’ Mosquito (which would become the Morris Minor), Austin A40, Standard Vanguard, the Raymond Lowey-influenced Hillman Minx. So why take this huge and costly risk?

For Ford the business case was equally a no-brainer. The situation for Ford of England was much the same as for the British-owned manufacturers. And with regard to Ford building the Beetle for North America, at that time there was little evidence that Americans and Canadians wanted anything other than the big cars they knew and liked. North American awareness of small cars was in its infancy in 1948.

So what were the disadvantages of the Beetle?

That then was the business/market situation in 1945 when the British were invited to acquire Volkswagen. But what about the car itself? Forget the Beetle that we know now and look at how it appeared then. What the British saw was a unconventional car with styling somewhat resembling what had been popular in the 1930s but was now becoming dated. Two-door only. With an air-cooled, flat-four, rear-mounted engine, that was new territory. The transaxle, also new territory, had no synchromesh, whereas by the late 1930s most British and American cars had synchromesh on most forward gears.

Yes, the Beetle’s rear engine configuration offered a traction advantage in mud and snow, but would that really be a significant overall marketing plus? And yes, independent rear suspension promised a smoother ride, but Engineers even then knew that swing-axles at the rear could give rise to handling problems. And the car was slow, even by the standards of the day although, in fairness, this was partly due to Porsche having designed the car to be high-geared, (i.e., with low numerical Overall Top Gear Ratio) so that engine rpm would be lower at highway speeds, with longevity and fuel economy advantages.

What about air-cooling? Volkswagen would later make a big deal of it in their very clever advertising – they had to – but the reality was that air-cooled engines were noisier than their water-cooled equivalents. Moreover, by 1945 development of water-cooled systems had advanced, water pumps overcoming the weakness of prior thermo-syphon systems, and supplies of glycol/antifreeze had loosened up, since its use in aircraft in WWII had resulted in more production capacity.

Beetle: a long way from perfect in 1948

Rootes and the others were being shown a car which was in a relatively early stage of development. And, although they probably weren’t told it, the car was then far from problem-free. In ‘Small Wonder’ Heinz Nordhoff, a former Opel Engineer, who was appointed by the British to manage Volkswagen, is recorded as saying that when he arrived at Wolfsburg in January 1948 the car — presumably comparable to the one the British had been given to assess – ‘had more things wrong with it than a dog has fleas’: slow and noisy, with short engine life, and suspension, upholstery and paint problems.

So if the car wasn’t that great, how did they go on to sell over 21 million of them? Strict price control helped, but the incredible success of the Beetle can really be summed up with one word: dependability. That’s what people expected, especially in the crucially lucrative market of North America. And the Beetle delivered. Unlike its British competitors.

So how did Nordhoff and his people in Wolfsburg go about achieving superb dependability?

Essentially by listening to owners and taking prompt corrective action when faults and shortcomings were identified. In other pieces I have written I have been a harsh critic of the British for failing to do just that; experience in the USA and Canada was that, far too often, when problems were reported to Britain they were dismissed as insignificant if they were not being reported on the home market, and foot-dragging was frequent when denial no longer worked. That was not Wolfsburg’s approach.

Making the Beetle reliably

At the end of the 1967 edition of ‘Small Wonder‘ is a list: ‘How to tell the age of a Volkswagen – Basic Changes’, covering 1949 to 1967. Essentially, it is a list of 109 changes, mostly visible therefore not listing hidden but critical technical advances – material/metallurgical upgrades, detail engineering design changes, production improvements – driven by an uncompromising Heinz Nordhoff for whom quality, reliability and durability were essential if the Beetle was to sell. The list gives us a feel for the meticulous attention paid to criticisms, large and small, reported to Wolfsburg by owners, dealers and field staff. One change that I particularly looked for was listed by Nelson as a ‘non-repeat starter switch’.

That doesn’t sound like much, but it was, I knew, a poorly-worded description of a major advance made when Volkswagen ditched the starter-motor Bendix drive for a solenoid-engaged pinion, a feature crucial for cold-start dependability with a four-cylinder engine. At the risk of boring you with what I’ve written before, let me explain that if the engine did not start immediately at low ambients, but just coughed on one or two cylinders, the Bendix pinion would be thrown out of mesh and the hapless driver would have to wait until the starter armature stopped spinning before he or she could try again – and again – and again. On the other hand, with the solenoid-engaged pinion – which is what we still have today – one just keeps cranking until the engine stays running.

By 1960, the solenoid-engaged pinion had been made standard on cars of North American manufacture; Volkswagen reacted fast and made it standard on the 1961 Beetle. But it wasn’t until the middle of the 1960s that the solenoid-engaged pinion appeared on most higher-volume cars produced by British-owned manufacturers. So, for another four or five years, British cars were stuck with a reputation of being hard to start in cold weather. That’s a classic example of how Wolfsburg was assiduously attentive to what the market required, whereas a head-in-the-sand response persisted with most of the British-owned manufacturers.

The Nordhoff difference

The relentless pursuit of Beetle dependability had started as soon as Heinz Nordhoff (above) took over Volkswagen in January 1948. Before he came to Wolfsburg he had not been impressed by the Beetle. When the prototype Beetle was revealed in 1937 Nordhoff’s interest lay in Opel’s own small car, the P-4, a front-engine/rear-drive car comparable to the contemporary Ford 8 and Morris 8, and he had contemptuously dismissed the Beetle as ‘that car of Hitler’s’.

So when he came to Wolfsburg he was not enthusiastic about the Beetle itself and, as we have seen, he fast concluded that dependability and unbeatable quality would have to be absolute prime factors if this very different car was to make its way in the marketplace. An Engineer by profession, Nordhoff was never satisfied with the way things were, and from his start at Wolfsburg he continuously and aggressively pushed the Volkswagenwerk staff and labour force to look for, and implement, new ways of improving detail design, materials and processes so that every Beetle shipped would be meet the top standards of the day in mechanical component life, workmanship, fit-and-finish, corrosion resistance, paint appearance, reliability and overall durability. But Nordhoff was a marketer too, so his demands did not end when a car left Wolfsburg.

His strategy, ‘service first, sales second’, required that before a single car was sold by a dealer, technicians at that dealership would have already been trained by Volkswagen, and the dealership would have an extensive stock of parts to Volkswagen’s requirements, so that everyday service and repairs could be handled immediately. Preference was given to dealers who would sell Volkswagens exclusively. That strategy was enforced in Europe as soon as Beetle sales became significant but the objectives were not met in the USA as quickly because acceptance of the Beetle, and therefore setting up a solid dealer organisation, took longer. But once the Volkswagen franchise became desirable in the USA and Canada, Wolfsburg’s demands were strictly imposed.

Single-model advantages

Of course, having only a single model helped greatly. Although Nordhoff could not take credit – it was historical circumstance – he made sure it stayed that way until worldwide parts and service organisations were well established. The ‘Type 2’ Transporter/Microbus was not introduced until 1950, the Karmann-Ghia until 1955, and the ‘Type 3’, the 1500, until 1961.

A chance factor which also helped build the Beetle’s success was a sociological one. The 1960s, especially in North America and the era of the war in Vietnam, launched a generation of young people, typified in the beatniks then the hippies, which rose up against everything they saw as ‘The Establishment’. And when it came to cars, what better expressed rebellion against parents’ Chevs, Dodges and Fords than the quirky Beetle? Plus there was its increasingly-recognised dependability: pile three others into a Beetle and you could drive from Halifax, Nova Scotia to Vancouver (or Haight-Ashbury in San Francisco) with your foot flat on the boards all the way; the travel wasn’t fast but you got there and back without complaint from the car. Flower power, freedom and the Beetle became intertwined.

What Sir William Rootes and others had been asked to do was gamble on a car that had not yet been tested in production, nor was it tested in the marketplace. There was no crystal ball to reveal that over 21 million would be built. And, as I have shown, it was not the car itself that made it all happen, it was the foresight and single-mindedness of Heinz Nordhoff. So, based on what Sir William and his commission members saw in 1945, and what Ford saw in 1948, the decision to reject the Beetle was a rational one.

And clever though Dr. Porsche had been in designing a car that would meet Hitler’s 1930s objective of a people’s car built to a price, we now know that the Beetle was not going to be the small car template for the future. How many cars are there today with air-cooled engines? How many cars are there today in the family-car class that are rear-engined? (Although it’s my opinion that rear engine could still be a viable option provided the rear suspension is not swing axle.) The Beetle was incredibly successful because it was superbly developed with build quality and dependability the objectives above all others. And then it was superbly marketed worldwide with total dedication to the principle that outstanding parts and service support was the only way to achieve complete and lasting owner satisfaction. That’s what sold more than 21 million cars.

The rise of the small car in the US

After WWII, and for long beyond, exporting to the huge and lucrative North American market was crucial to the survival of small car manufacturers, British, European and Asian. The British got there first: in the early 1950s in the USA and Canada the terms ‘small car’ and ‘English car’ were synonymous. And there was nothing inherently wrong with the front-engine/rear-drive configuration that they stayed with until the advent of the Mini – note that Toyota and Datsun/Nissan would rely on front-engine/rear drive during their exponential growths through the 1960s and into the 1970s. Rootes (and the other Brits) failed not because they rejected the Beetle, but because they failed to adopt policies that placed absolute priority on owner satisfaction.

Far too often top executives in large corporations are shielded from bad news – nobody wants to be the messenger, so pictures painted for the top people are rosy ones. I suspect that is what happened at Rootes: the increasing negative reputation of Rootes products (and British cars in general) as frustratingly unreliable in the crucial North American market was never really revealed to Sir William and his Board until it was much too late. What follows here is a ‘could-have-been’ scenario, based on the reality of what Heinz Nordhoff achieved with the Beetle.

Suppose at Rootes the lack of dependability under North American road and climate conditions had been made clear to Sir William and Sir Reginald early in the 1950s. Suppose that the Rootes brothers had then made it an absolute priority that their engineering, service and field staffs be obsessive in identifying and fixing causes of customer dissatisfaction. The Rootes brothers could have insisted on receiving, personally, regular reports detailing owner problems and complaints. They could have insisted on regular reports detailing frequently-occurring warranty conditions and reports of unusually high sales/movement of specific parts. Unglamorous stuff, and not what top executives would normally ask for, but key to identifying the endemic problems which were plaguing British cars in North America.

Reliability to the fore

Things going wrong that shouldn’t go wrong. Such as electrical connectors that corroded and failed in salt-laden operating conditions, brake wheel-cylinders and handbrake cables that seized under those same conditions, exhaust valves that burned in frequent interstate/expressway (i.e. motorway) driving, clutch carbon release-bearings that wore out prematurely (yes, drivers will pedal-ride so deal with it: give them a durable ball-race), distributor contact breakers that required too frequent adjustment, ignition systems that tracked in wet weather, sub-standard weatherstripping causing water leaks, interior textiles that split in temperature extremes and, after 1960, that antiquated Bendix starter-drive.

Having learned how their otherwise attractive cars were frustrating far too many North American owners with lack of dependability, the Rootes brothers could then have read the riot act with their finance, engineering, production and purchasing managers, and with suppliers such as Lucas, Smiths, Girling and Lockheed, so that problems got fixed fast, and quality and reliability became givens. Probably at extra cost— for example Lucas could have supplied a starter motor with a solenoid-engaged pinion much earlier had the bean-counters at Rootes (and BMC) stepped up to paying for it. Short-term pain for long-term gain.

How the Brits didn’t learn from Volkswagen

And along with that, to simplify the goal of establishing first-class after-sales service, the Rootes brothers could have implemented a radical marketing policy for the USA and Canada, concentrating on the top-selling Minx (Husky, Rapier and Alpine variants could follow later) and eliminating the costs and complications of low-selling Humbers, Sunbeam-Talbots and Commer trucks. Plus refusal to allow shipment of a single car to a new dealer until that dealer’s parts department had an ample stock of parts and mechanics had undergone full training.

Had Rootes adopted such a rigorous culture of ongoing engineering improvements, uncompromising quality standards, obsession with dependability, and superb after-sales support, there is no reason why the post-War redesigned Minx, with its four doors, contemporary Lowey-influenced styling, competitive interior roominess, reasonable performance for the era, and predictable stable handling, could have been just as well-built and dependable as the Beetle – and eclipsed it. Sir William Rootes was not foolish in turning down an opportunity to acquire the Beetle.

He didn’t need it. What went wrong was that Rootes (along with other British-owned car manufacturers) failed, post-War, to remodel the organisation with top down insistence on a corporate culture of obsessive dedication to dependability and owner satisfaction. Had Rootes and other British-owned manufacturers embraced such an enlightened policy Britain could well have remained the dominant exporter of small cars to North America — and the Beetle just a footnote. But, of course, that didn’t happen. The Beetle ate the Brits’ lunch. And the Japanese took note.