For BMW, the post-war era meant tormented times and a constant race to reinvent and rediscover its own way in the automotive industry. Even though Germany emerged as a defeated country after World War II, the 1950s decade can be pictured as a flourishing and exuberant period for the German industry and society.But while the country’s economy was growing, BMW was in the middle of a crisis, struggling to find its identity in a very competitive automotive landscape.
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In the late ’50s, BMW was faced with bankruptcy. The peak moment of the crisis was in 1959. The iconic constructor from Munich was underperforming financially and its model lineup could not cope with other market competitors in terms of profitability and customer appeal.
Although some of its upper-end models were highly visionary and ahead of their times, like the 501 luxury limousine, the 503 premium 2+2 Gran Turismo and the 507 Roadster, BMW was in the midst of financial crisis . The latter models, although catering to the upper echelon, were not bringing in enough profitability margins to make up for the ever-increasing production costs and creditors’ pressure.
The market was simply not enough and well prepared for such type of vehicles. In addition to the 501 – 503 – 507 triplet, BMW was also producing mass-market, rather low-cost models. The BMW 500 2-seater, or better known as the Isetta, was a micro-car produced under license, with a pretty interesting architecture with two visible wheels at the front and two smaller wheels for the rear axle. Access in the vehicle was made through the frontally placed door.
The Isetta was also offered in a 4-door version known as the BMW 600. Besides the 500 and 600 models, starting with August 1959, BMW also started producing the BMW 700, available as 2-door sedan, coupe and convertible. This model could be described as an economy car and it became very popular in a time when BMW was close to financial ruin. It also paved the way to the BMW Neue Klasse, which was premiered in 1962.
Coming back back to the late ’50s turmoil, BMW was faced with sluggish premium seller and mass market cars which could not bring the desired profit. On December 9th, 1959, the Annual General Meeting of BMW was to become the pivotal point of the revival for the Munich constructor.
News was spreading rapidly in the German press that BMW was very close to going bankrupt and the financial market was both cautious and willing to witness the outcome of the crisis. The brand has been fairly close to completely losing its identity if there were not for some brave men to withstand the current. The grim prospect of being sold to Daimler-Benz AG was simply too much for the shareholders to accept.
An offer for complete takeover and cash infusion was on the table and would have eventually expired on the same day of the Annual General Meeting at BMW. Several substantial shareholder representatives expressed their negative opinion on the current management potential to led the company out of the crisis, but also shared their true and full confidence in the brand. One of them was Mr. Erich Nold, a representative for the small shareholders’ group.
During his speech, he is recorded to have said nothing less than “Step down!” while addressing to the then-current management and supervisory board who have led BMW close to failure. What’s more, during the 10-hour intense debate it was discovered that the management intentionally made an accounting artifice to mask the BMW 700 model series development costs on the 1958 balance sheet, to the detriment of the shareholders.
Another key figure which was instrumental in the rejection of the Daimler-Benz takeover was Herbert Quandt, a German industrialist, who managed to increase its share in BMW up to 50% and paved the way for the development and launch of the BMW New Class in 1962. After the AGM 1959, at the pressure of workforce syndicates and union traders, he rejected the takeover proposal and starting pushing BMW into a new era.
The BMW 700 was a highly popular model for the economy segment of the market, being well known for its racing success. Until its demise in November 1965, more than 188,000 examples have been sold. The 700 also helped the transition to the upper class BMW 1500, which signaled the official entrance of BMW in the premium car market.
It took the ambition and daring vision of one man to completely revamp an ailing brand. Herbert Quandt is credited to have saved BMW from imminent disaster. Quandt is the one leader that helped the brand revive and become successful and powerful. He had the most faith in the new project of the BMW Neue Klasse models, which were developed from scratch and brought BMW the so desperately needed profit and recognition.
A little of today’s BMW success will be forever attributed to Mr. Herbert Quandt. BMW wouldn’t have been what it is today without his help.
I think that we should all as BMW fans recognize the tremendous contribution of the one and only Ebernhard Kuenheim. He was the one that put the foundations after Quandt to make BMW what it is today. Without his leadership (don’t forget that Quandt died in the early 80’s), BMW would not have been anywhere near of what it is today. Quandt trusted him (you can see him in the photo standing on the left of Quandt ) after the historical decision that year, and the results are more than obvious today.
Do not Quandt & von Kunheim heirs still run BMW? BMW truly legacy manufacturer, just not in the failing way typed about on “green” Tesla pages.
yeah I dont understand how people think a car company that in overall probably has like a 1% share in the market will just randomly sink BMW that has grown alot and is one of the most profitable car makers currently and just keep on growing…maybe they know something we dont ? maybe they are planning to bomb BMW factories “?
Given the # of BEV “legacy manufacturers” have in the pipeline, bombing may be other way round (can you bomb tents?).
You have a point here but keep in mind that:
a. No company will make a campaign on Twitter or even elsewhere if they would not feel the breath of competition very close. Adding to this, all the latest updates on how BMW will be “electrified” in the future, would not taken place if they didn’t feel that.
b. Remember Nokia and Ericsson? Where was Apple back in 2005-2006 in the mobile phone industry!
? Correct! Nowhere! Apple didn’t even exist in this segment! Nokia misjudged and then collapsed in the segment. So did Ericsson.
Moral story here? BMW is big. It’s HUGE. But too big to fail, proved wrong. Lehman Bros is one fine example.
Competition is fearless and if you don’t be proactive, then all you have is a glorious history but not a prosperous future.
Merry Christmas everyone!
Yeah but this isnt cell phones we are talking about …to dethrone a well established car maker is much harder than to dethrone a well established phone maker …its not comparing apples to apples usually car makers fail due to bad management which is not a problem at this very moment at BMW sure tesla build some good cars which I love but I can tell you know BMW will exist in 10 years time ,they will exist in a 100 years still,they have been in a wayyyyyy worse place then they are now ,BMW is still pioneers in electro mobility ,the only company that has charging stations in my country most probably on my entire continent except for like 1 or 2 jag chargers
A bit missing is the point that BMW was deliberately calculated poor by their management board to convince shareholders to accept the Mercedes offer. But it was the shareholder that were suspicious and they took action. Nold was a hero. He was talking to the board for many many hours so the offer would be invalid (time limited offer). During these talks they found out that the 700 dev cost have been in the books as a complete write off – which is very unusual. TLDR Heinrich Richter-Brohm, Alfred Böning, Kurt Donath and Fritz Fiedler betrayed BMW for hiding the 700 sales and for promoting the hoplessly outdated and unprofitable 501/502 as a flagship car. It’s seriously questionable who they were working for because everything they did was in favour of Mercedes and Deutsche Bank. The democratic Element in shareholder conference saved this company. Quandt was the clever businessman with lots of money and saw a chance to get hold of a very underrated car manufacturer. People like Erich Nold and Dr. Friedrich Mathern were the real heroes.
BMW didn’t exist post-War, their factories were in East Germany (thus EMW), their tech went to Bristol in the U.K. for war reparations (check Bristol post-War grilles). BMW gambled on V8s, too soon, they survived manufacturing Italian Isettas under license & by putting their motorcycle engines into rear-engine rally cars, 700 could never have been a high margin profitable vehicle regardless of cooking the books. Quandt was the one who convinced German Banks to finance a new model range rather than sell BMW factories to assemble Daimler trucks. If your heroes were the rescuers, why are you the only 1 to know it? Why isn’t it their heirs who run BMW a generation & half a century later?
Buckle up your German: https://www.heise.de/newsticker/meldung/Missing-Link-Die-wichtigste-Sitzung-in-der-BMW-Geschichte-4607579.html
BMW had parts of their airplane engine business left and motorcycles. Mathern made a deal within less than 24 hous to sell the ex airplane engine factory Allach to MAN. Thiy may become a bit of a history discussion but the brits didn’t just take the factory, they even paid rent for the factory because they had truck service and a depot in Allach. Which is a bit creepy because it was a KZ with directly attached war production factory lines.
The communists in eastern Germany took everything apart in Eisenach and tried to ship it to Russia – which failed miserably because either they were unable to re-build the factory and run/maintain it or the machines didn’t even make it there. Everything in the east has been destroyed, a disadvantage this region hasn’t recovered until today 30 years after reunion.
So Quandt saved BMW & still run it a generation later, isn’t their 1er factory in Eisenach?
During GDR they produced Wartburg there. The weird 3 cylinder two stroke sedans and wagons. The production was a mess. In the middle of production they had to load the raw unpainted chassis on trucks and drive them through the inner city to the painting facility. This meant depending on the weather cars ended with terrible paintjobs from factory.
After reunion or slightly before GM/Opel took the plant… well actually they built a new one. They produced Corsas for a long time and now some SUV. Since Opel has become part of the PSA universe i think Eisenach will be shut down somewhere in the future. The french are mainly in power and they preferably protect the lazy french mans jobs.
For over a century now, there’s pretty much NOTHING a German aviation co. banned from engineering airplanes have NOT produced. Your Wartburg image sounds like Karmann in the ’70’s, E9 shells were seen rusting in the yard even before going inside to be painted. Lazy French are good @ rioting in the streets, also fromage, patisserie, champagne, parfumerie.
For yrs. now.
My mistake, Leipzig.