BUSINESS ABROAD: Volkswagen for Sale

The West German government is one of the world’s richest property holders. Though it is committed to free enterprise, it controls 314 German industrial companies worth well over $1 billion, which it inherited from the Kaisers and the Nazis. These control 90% of the nation’s lignite mining, 50% of its. iron-ore mining, 20% of its hard-coal mining plus much of its production of aluminum (70%), lead (42%), zinc (28%), oil (18%) and steel (5%). The state also controls 100% of the German railway (total employment: 500,000) and telegraph systems.

Last week, the government took its first real step toward selling this profitable empire. Free-enterprising Economics Minister Ludwig Erhard announced that the Volkswagen auto works, the world’s fourth biggest automaker (behind the U.S. Big Three), will be sold to small stockholders, and the deal will set the pattern for the later sale of other state-run giants.

“Wider Ownership.” Erhard’s plan is to sell 10 million shares at about $12 each over the next several years. This would bring the government $120 million, which is close to Volkswagen’s plant investment but well below its estimated assets of $250 million. Erhard aims for “wider ownership of the means of production” by making special provisions for wage earners. The government will give 10% to 20% discounts to Germans earning up to $3,500 a year. To prevent stock control from going to big companies, especially foreign ones, Bonn will limit stock purchases by any buyer (probably to between $2,500 and $7,500) and regulate future stock transfers.

Before the sale can start, the government may have to prove its rightful ownership. Claims of ownership are being advanced by Volkswagen’s original financiers —Germans who paid Hitler’s Labor Front $233 each for the “people’s car” they never got. Of 300,000 Germans taken in on the deal, a group of 130,000 is still suing in federal courts for some return, although lower courts ruled against them.

Vote Getter. The state of Lower Saxony also claims to own Volkswagen because the British occupation authorities named it to administer the company in 1949. But Lower Saxony has done little to build up Volkswagen, and the federal government expects to knock out this claim with its private ownership bill. The Bundestag is likely to pass the bill this fall, unless Chancellor Konrad Adenauer is upset in September’s elections by the Socialists, who favor continued nationalization. But German politicians believe that the very announcement of the stock ownership plan will pick up votes for the Adenauer-Erhard team, help put it back in office to see the plan carried out.