Ben Gilbert: commitment

Transcript context

…I think there also might have been a technical reason, which is, even though this new Volkswagen was reconstituted as a company, it's only shareholders at this point in time who were the German government. So both the national West German state and the state of Lower Saxony within West Germany, which still to this day holds 20% of Volkswagen, which is crazy. They would IPO Volkswagen (I believe) in 1960 or 1961. Even though it was a company, it was a German national company to operate in other states, other countries in Europe. They probably needed third parties. Wild, right? Okay. Ben, you hit on this a minute ago. What the hell? Why is the new western-controlled West German, post-Nazi government giving this deal of a lifetime to these former Nazis? It's not just we'll pay you for the cars you distribute that we make. We will pay you for all cars that we make, every Beatle, regardless of whether you distribute it or not. Yes, to the German company, and then the Austrian company has exclusive rights to distribute it. It's a crazy deal. Here's what's going on. It actually, as crazy as it sounds, makes sense. We talked about a minute ago, the Iron Curtain and the Soviets. It's so hard for us to remember now, but Germany, post war, was ground zero for the Cold War. The battle against the Soviet Union was happening right there, right next door. For the West, reconstituting the West German industrial base was of paramount importance. The Marshall Plan that people probably know about, this is why the Marshall Plan happened. This is essentially part of this philosophy of, we don't care that these people used to be Nazis. But for Porsche, for Mercedes-Benz, and for lots and lots of German industrialist companies, the reason that they get restarted and reinjected with steroids, so to speak, is like, hey, we got an existential threat next door, we got to rebuild the industrial base. The deal that they give them does come with an implicit string attached, which is they basically say to Porsche and other companies, we're not really going to give you a license to print money. Instead, we will give you a license to essentially create enterprise value. What West Germany does is they create one of the oddest tax incentive systems I've ever seen. For ordinary people in West Germany, post war, the tax rate was very low. The maximum amount of taxes that any normal person would pay would be 15%, 20% of your income. But for these new, old industrialists above a certain income, Germany sets the marginal tax rate at 95%.…

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