In the late fall of 1959, BMW was on the ropes. The demand for motorcycles was soft, they had cars at two market extremes, luxury and economy, and there was no middle ground. In addition revenue streams from post-war servicing of American military vehicles had ended by mid-decade. Dire times indeed and the wolf was at the door.
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The shareholders meeting scheduled for 9 December 1959 promised to be the last of an independent BMW. The process that would turn BMW over to Daimler Benz, ostensibly a ‘merger’, and then for BMW to become a captive Tier 1 supplier of the Swabian firm, was well underway. Arranged before the meeting, the proposal would have meant the end to an independent BMW.
But a fly in the ointment appeared in the eleventh hour. Two stakeholders, Herr Nold and Dr. Mathern, a lawyer, improvised a dance to save the firm. While Nold, a pesky activist shareholder, kept the meeting from adjourning, Mathern worked behind the scenes to peddle the Power Plant Production (aero enignes) to MAN. The sale of the Power Plant Production would bring in enough cash to allow BMW to develop the new 700 and the proposed ‘neue klasse’ cars that would cement their mid-market offerings.
The general meeting devolved into a raucous affair, with much wailing and gnashing of teeth, shouting and seething stakeholders and a board of management square in their sights. The mood in the hall was contentious, there was a sense that the proposal was not right and that BMW could be salvaged as a brand. But that was not what management had rigged and it would take a herculean effort to turn the tables and save BMW.
In the end, the company may have been saved on a technicality, an error in the financial statement allowed the meeting to be adjourned, with 10% of the voting shares consenting. A vote was taken and the necessary shares to force an adjournment, without the proposal to ‘merge’ with Daimler Benz approved, occurred. But before it could be adjourned a savior, in the form of Herbert Quandt, slowly began to view BMW as a viable concern.
Time, an incredibly precious commodity, was purchased at that meeting. Time to consolidate an approach to financial independence for BMW. Time to introduce the mid-range product needed to secure the future. And time to grow and prosper as the Bavarian Motor Works.
The single most riveting account of that meeting is found in Horst Moennich’s book, “The BMW Story: A Company In Its Time”. It is hard to think that the vibrant company we know and respect had come within a hair’s breadth of ruin exactly fifty years ago.