deception slavery and unimaginable cruelty there are many companies with dark origin stories but the story of Volkswagen may be the most horrifying today the Volkswagen group is one of the largest Auto conglomerates in the world holding ownership over Brands like Audi Bentley Lamborghini and Porsche you might associate Volkswagen with some of the most beloved car designs like the harmless looking Volkswagen Beetle or the playful VW burst however behind the innocent facade of these iconic cars lies one of the darkest histories in the world of business dating all the way back to Nazi Germany and a personal request from Adolf Hitler be warned this story is not for the faint of heart this is a story of Dark Secrets this is the disturbing true story of [Music] Volkswagen [Music] after Germany Lost World War I the German economy was on the brink of collapse to make up for the damage caused by the war Germany was forced to pay an astounding amount of money in reparations to other European countries the amount was a total of 132 billion gold marks more than $500 billion in today's money as a consequence the German economy was extremely volatile during the 1920s unemployment was Skyhigh and because the government printed endless amounts of money to pay for reparations Germany's currency became essentially worthless during the winter it was actually cheaper to burn your cash to stay warm than it was to buy firewood the German people were desperate for something to change and this was exploited by the Nazi party who by 1933 managed to gain nearly absolute power leading to Adolf Hitler becoming Germany's chancellor Hitler promised to restore the German economy to its former glory and to do that he needed to make it completely self-sufficient one of the ways Hitler planned to do this was to connect German cities with a large Highway Network known as the autoban so he ordered the Nazi government to start building thousands of miles of road across Germany but once the autoban was ready there was one problem there weren't any cars on it you see even though the economy showed signs of improvement cars were still a luxury in the 1930s so buying a brand new one was totally Out Of Reach for most workingclass Germans however since the turn of the 20th century and the introduction of automobiles German Engineers had dreamed of a vehicle that was small easy to mass-produce and inexpensive to buy the idea had a popular name the people's car or as it was said in German Volkswagen some promising designs had been introduced over the years although none of them had ever reached a mass Market but Hitler wanted to change that to fill up the autoban so he recruited a man who was already a Titan of the car industry Ferdinand porcher one of Porsche's Founders Porsche had designed some of Germany's most iconic cars to date so Hitler considered him the perfect man to bring his personal idea for the Volkswagen to life Hitler wanted a small family car that could fit two adults in the front and three children in the back it had to be light fuel efficient and able to clear 100 km an hour on the autoban Hitler also told Porsche it should look like a beetle and Hitler even made his own sketches now if there was anyone in Germany you didn't want to displease it was Adolf Hitler so ferdinan got straight to work using inspiration from his most successful past designs like the Porsche Type 12 and type 32 however potential designs for the people's car had been in the works for decades already and some of them look suspiciously close to ferdinand's final design years later one engineer was able to successfully sue Volkswagen and get partial credit for the design so it's fair to say the design for the first Volkswagen wasn't completely original but either way by 1938 the Volkswagen's design was ready Hitler loved it and the new Volkswagen factory in Wolfsburg was about a year away from starting production now even though fgam became Volkswagen's president it was a state-owned company at the time so it was founded under the Nazi governments and they were in charge of advertising the new people's car to the German population Hitler priced it at 990 German R marks a little over $6,000 in today's money and he initially named the car the kdf bargon as in Germany kdf was an abbreviation of strength through Joy but since the Volkswagen factory wasn't quite ready yet and since many Germans were still struggling financially the Nazis came up with the idea of a savings book clad if citizens paid five R marks every week until they reached the full price of 990 then they could get their Volkswagen in a little under 4 years when the full amount was paid off five r marks a week was a reasonable rate for most working class Germans and so over 300,000 Germans signed up but none of them ever got their V swagon and all of their hard- eared savings would be lost because in 1939 the Third Reich invaded Poland marking the beginning of World War II and throughout the course of the war Volkswagen would reveal just how evil it could truly be [Music] because of the war the Volkswagen factory had to be entirely repurposed to Aid in Germany's war effort it was really a weapons Factory disguised as a car factory because the Nazis didn't tell the German public that they would have to wait and instead all of the money they paid for their cars was used by the Nazis to fund the war Hitler had initially planned the Volkswagen factory to build the people's car which fit two adults and three children but now the fact was making military vehicles that needed to fit in Hitler's words three men and a machine gun as the war intensified most German men were employed by the Nazis either as soldiers Military Officers or policemen so there was a massive shortage of industrial workers at the Volkswagen factory to make up for this Ferdinand suggested to Hitler that they use Soviet and polish prisoners of War to operate the factory whil World War II raged on and Hitler personally signed off on building wolfsburg's first concentration camp which was directly attached to the factory at one point there were four concentration camps and eight Force labor camps in Wolfsburg all there to operate the Volkswagen factory tens of thousands of men and women worked in the factory during the war basically as slaves and since Porsha so strongly believed in the Nazi racial hierarchy the workers were treated extremely unfairly the Scandinavians were given more rations than the poles the poles were given more rations than the Russians and the Russians were given more rations than the Jews but even though some got better treatment than others all of Volkswagen Workforce was hungry cold and overworked and yet a lack of food was nothing compared to the tragedies that occurred in the children's home of the Volkswagen factory or as it was called the kinderheim you see before 1943 the Nazis policy at their Force labor camps was to send women who got pregnant back to their hometowns but every time this happened Volkswagen lost one of its workers so they asked the Nazis to modify this policy and as a result the Nazis instituted Nursery series for newborn babies and sent the mother straight back to the camps to continue working and thus Volkswagen's kinderheim was built in a town just outside the factory now it's important to note that Volkswagen was directly responsible for running the kinderheim not the Nazis so the mothers had every reason to believe that their babies would be well cared for but sadly they were wrong to even visit their children the mothers had to get a police permit every time and if they were expecting the kinderheim to be a well equipped Nursery it was instead just two old rundown wooden Barracks the kinderheim was completely infested with cockroaches flies maggots bed bugs and lice which would all crawl over the babies at night and bite their faces their diapers were hardly ever changed and 15 babies would be showered in contaminated water at the same time and cleaned off with the same dingy towel but even worse the staff didn't make a single effort to care for the babies the Kinder home's doctor never examined their condition and only showed up there once every week for a few minutes the nurses were no good either even though the other mothers begged them to close the kinderheim windows at night so the babies wouldn't sleep in the cold the nurses just flatly refused one of them told the staff that they shouldn't even bother feeding the babies so they were only given a half liter of spoiled milk and one and a half sugar cubes each day when asked about theind theind later on one of the mothers said I couldn't do anything to relieve the suffering of my child but watch over him stealthily and weep seeing the unlimited misery of those human beings you see Volks was faced with a choice about what to do with these babies they could either wait for them to grow into adults and force them to work in the factory or they could just kill them and not only did Volkswagen choose the second option but they chose to kill them with more cruelty than even some of the Nazis in fact one Nazi official came to assess the situation at the kinderheim and reported that the present handling of the problem is appalling in my opinion there are ways to handle this without pain and suffering but one of the Kinder home staff members just brushed off his suggestion sarcastically saying that the baby was merely tortured as you would expect the constant malnutrition infection and neglect meant that death was a weekly event at the kinderheim and Volkswagen made the mothers pay for their funerals although perhaps funeral is not the right word for it the baby's bodies were wrapped in toilet paper stored in the kinderheim bathroom for a few days and then tossed into an unmarked Mass grave inside of a cardboard box in the end somewhere between 365 to 400 babies were victims to this tragic f the death rate for infants inside Volkswagen's kinderheim was nearly 100% And this would have continued for longer but then in 1945 the Allies had successfully Advanced into Germany's territory and they bombed the Volkswagen factory as a strategic move the factory was left in Ruins but the bombing was a sign of Hope over at the kinderheim Volkswagen ordered one of the bureaucrats to burn all of their documents but in an act of sudden bravery he took a stack of blank papers and burned those instead that's how we know about all the atrocities that occurred at the Volkswagen factory in the kinderheim the 9,700 workers and concentration camp inmates working on the Volkswagen factory at the time were liberated by the allies and a few weeks later in May 1945 the Nazis surrendered World War II was finally over but now that the Nazis were out of the picture what was going to happen to Volkswagen after the war Germany was a broken Nation the Allied powers and the Soviet Union occupied the entire territory and now their task was to figure out how to rebuild Germany so it could participate in the global economy again now the Volkswagen factory used to be the biggest employer in the town of Wolfsburg but after the Allies bombed it it was left in Ruins if the factory didn't resume production the people of Wolfsburg would be left without food and housing so the British army tested major Ivan Hurst with the administration of the Volkswagen factory Ivan was a British army officer and engineer but he was just 29 years old at the time and when he got a tour of what remained after the bombing Ian knew saving Volkswagen was going to be very complicated about 2third of the facto roof had been torn down there were massive bomb craters all over the floor and much of the Machinery had been damaged but still Ivan knew the factory could employ at least some of the people of Wolfsburg for now and he also realized that there wasn't extra benefit to the Volkswagen factory all of the British Army's Vehicles were in terrible conditions after 6 years of war so because Volkswagen's cars were designed to be easy to mass-produce it could become the main transportation vehicle for the British army while they occupied Germany and by sheer coincidence it just so happened that there was one prototype Volkswagen in the factory that had miraculously been unharmed during the bombings so Ivan painted it like an army vehicle and sent it to the British Army's headquarters and to his surprise they sent him back an order for 20,000 other cars just like it and 14 days later they doubled the order to 40,000 but in Ivan's words an order for the cars was one thing to produce them was another you see the factory was in shambles and its equipment was damaged so at first Ivan was only able to get the Volkswagen built manually which was a very slow process also the vast majority of the laborers who worked at the Volkswagen factory returned to their home countries after they were liberated and finally since Germany's industrial economy had collapsed after the war getting materials like glass steel and car batteries was extremely difficult so Ivan put his head down and started tackling all these problems one by one once they cleaned up all the rubble and repaired the equipment Ian managed to organize assembly lines that produce Volkswagens much faster to make up for the lack of workers Ivan called the British Army and asked them to release Nazi prisoners of war and give them a job in the factory and finally to get a good supply of materials Ian cut a deal with the Allied powers to give him a steady ration of steel glass and other materials with all of this combined by the end of 1946 The Factory was up and running running it had produced its first 10,000 cars and the number was only increasing from there throughout all of this time Ivan continually made improvements including the introduction of motorized flat wagons to move parts around the factory and this led to a surprising development they soon realized that if they made some modifications to the flat wagon it could be sold to the general public as well So eventually that project turned into the hugely popular Volkswagen Type 2 which is more commonly known by its nicknames including the VW bus the camper or the bully once Ivan fulfilled his quota of 40,000 type ones for the British army he established a network of successful car dealerships around Germany and other places in Europe and the British treasury even ordered that the factory begin to export cars to the UK of course the original Volkswagen logo was changed to get away from its Nazi Origins but it was clear to Ivan that the company had a bright future they were selling cars all over Europe now and the Volkswagon type 1 actually became a symbol of Germany's Resurrection Ivan had inherited what appeared to be a lost C Wars and yet just a few years later Volkswagen had a working Factory two Star Products an entire team and a network of dealerships and so by 1949 once the Allies had managed to get Germany to a good enough situation that they were ready to let it be a Sovereign Nation again Ivan's job was finally complete it was time to hand off Volkswagen to the people of Germany and this is where Volkswagen's path to domination truly begins Okay so we've just seen Volkswagen going get totally rebuilt and turned into a successful business but what if you wanted to start or grow your own business that's where today's sponsor kajabi can help you kajabi is the ultimate all-in-one platform that helps creators and entrepreneurs build successful online businesses kajabi lets you turn your skills into online courses membership sites coaching and more you don't need any Tech experience there's customizable templates and kajabi makes it really simple to build something great and start accepting payments I've actually been building my own YouTube course entirely using kajabi from the sales page to the membership area to the mailing list normally I'd need a 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com magnates to earn more doing what you [Music] love coming into the 1950s and 60s the Volkswagen beol and the VW bus became something of a global icon in 1955 Volkswagen celebrated the sell of their 1 millionth beor and it became the world's bestselling car in 1972 following this success Volkswagen went on to release even more models like the Volkswagen Type 3 and type 4 which were also huge hits as for the VW bus it became tightly associated with the counterculture movement against the Vietnam War so needless to say Volkswagen's image came a long way from the days of Nazi Germany it's quite an amazing Rebrand to go from a company that began because of Adolf Hitler to being part of the AP movement representing peace and love however in 1960 Volkswagen was denationalized so rather than the government owning the whole company they kept just 20% and ever since then Volkswagen has been on a Relentless quest to absorb their competition for example in 1964 the Volkswagen group bought a struggling German Auto conglomerate known as the auto Union and one of the brands included in the deal was Audi in 1986 Volkswagen bought a majority stake in the Spanish car manufacturer SE hat a year later they bought out scoda and by the turn of the century Volkswagen had acquired Bentley Lamborghini and Bugatti so by swallowing up as many of the car brands as they could the Volkswagen group was now a massive and Powerful conglomerate but then in the early 2000s came another twist as it seemed like it was Volkswagen who was going to get bought out and by none other than the company that had designed their first car back before World War II Porsche by this point Porsche was the world's most profitable car manufacturer clearing over 2 billion in profit in 2004 and throughout the years the two companies had had an important relationship Porsche owned 5% of Volkswagen and Volkswagen's CEO owned 10% of Porsche as he was actually the grandson of Ferdinand Porsche but in 2005 Porsche B more Volkswagen shares and increased their stake to 20% and then slowly but surely they increased this to over 30% now Porche CEO publicly stated they had no intention to take over the company he said Volkswagen was simply an important part partner of theirs but behind closed doors Porsche most definitely did want to take over the company and when the 2008 financial crisis struck and Volkswagen's sales heavily declined Porsche saw their chance to buy billions of Euros of their stock and under German laws they didn't have to reveal how much these consistent investments from Porsche actually kept Volkswagen's stock pretty stable even though the company was really struggling so to many outside investors it seemed obvious Volkswagen's stock was highly overvalued and as a result hundred of hedge funds shorted the stock believing its value would soon come crashing down now Short Selling is basically when an investor borrows a company shares and sells them with the plan to buy them back later at a lower price if the value decreases like they expect then investors make a profit on the difference but in 2008 Porsche dropped a statement that shocked the investing World they revealed that they now owned 42. 6% of Volkswagen's voting stock and held a further 31. 5% in options they also said they were going to going to keep buying Volkswagen stock until they own 75% of the company this meant Volkswagen stock price was not going down anytime soon plus since the German government still owned around 20% of the stock there were way less shares available on the open market than investors had realized and so all those investors who' shorted the stock were sent into a panic and began frantically buying back their Volkswagen shares before it was too late as a result within just a couple of days Volkswagen's share price went from around €210 to over 1,5 5 it was described as the biggest short squeeze in history and for just a couple of days during the Panic Volkswagen became the most valuable company in the world by market capitalization now this quickly went back to normal very soon after but still Porsche was nearing 75% ownership of Volkswagen and so their takeover plans seemed on track but for their last push to own everything they needed more money and so they sought the help of a group of qari investors however the German government blocked this deal from going through and after this things started to fall apart for Porsche you see by buying up so much stock Porsche had taken on around 10 billion EUR in debt their plan was that once they had over 75% ownership of Volkswagen they'd be able to pass a profit transfer agreement and pay off their debt using Volkswagen's cash reserves in other words using the money from the company V just bought to help pay for the company V just bought but once the deal fell through and Porsche were unable to afford the remaining stock they needed to have full control they now had no way to pay back their debt s and this caused a wave of investors to take their money out of Porsche meanwhile over on Volkswagen's side they feared Porsche would now start selling off huge amounts of Volkswagen stock to cover their debts so before they could do that Volkswagen decided to turn the tables on Porsche in 2009 Volkswagen asked Porsche's Qatari investors to divert their investment into Volkswagen instead and with that money they bought 49.
99% of porsa stock just a single share away from 50% 3 years later Volkswagen bought the remainder of Porsche for 4.
