Collapse and Reconstruction - The History of Auto-Union 1945-50

Collapse and reconstruction -The history of Auto-Union from 1945-1950
By Thomas Erdmann

Anyone who knows the history of Auto-Union will be aware from the literature that shortly after the end of the war in 1945 a group of former Auto-Union employees fled to Bavaria and, under the direction of former board members, Richard Bruhn and Dr. Carl Hahn, established a modest spare parts supply for the many DKW vehicles still in traffic. In the same year, Ingolstadt was chosen to be the headquarters of the new "Central Depot for Auto Union Spare Parts GmbH." From this beginning Auto-Union GmbH was founded in 1949 as successor to the old Auto-Union AG, Chemnitz, which had been deleted from the commercial register of Chemnitz on 17 August 1948.

At least that's how it is written.

However, the development after 1945 was not quite as simple and straightforward. Few people will know that four legally separate 'Auto-Union' companies were, at least temporarily, based at Schrannenstrasse 3 in lngolstadt.

So, let's try to untangle this 'Gordian knot' and wind back to the time before the war.

Auto-Union AG was registered in Chemnitz in 1932 as a result of the merger of the Saxon automobile and motorcycle firms, Audi, DKW, Horch and Wanderer. At that time, the receiving company was Zschopauer Motorenwerke J. S. Rasmussen AG, Zchopau, Saxony. The main shareholders were Sachsische Staatsbank and IndustrieFinanzierungs-GmbH. We now known that the latter was a wholly owned subsidiary of the Sachsische Staatsbank, so in fact the State Bank of Saxony was the real owner of the company. When the Russian front approached in April 1945, the board decided that Dr. Bruhn, Dr. Hahn and Dr. Werner would flee to West Germany. In their place Ludwig H. Hensel, Dr. Gerhard Muller, Dr. Kurt Richter, Walter Schmolla, and Dr. Hanns Schuler were appointed as executive managers.

Dr. Muller would also flee to West Germany, while Dr. Richter withdrew to Scharfenstein. After Hensel, Schmolla and Schuler had received news that the old board members would not be expected to return, they drove to the chairman of Auto-Union AG's supervisory board, Staatsbank President, Mr Nebelung, in Dresden and asked for further instructions. Mr Nebelung advised he would arrange for them to be appointed full members of the Management Board, but he was arrested by the occupation authorities before he was able implement this appointment.

Hensel, Schmolla and Schuler then turned to the main shareholder, the Sachsische Staatsbank. The Sachsische Landesregierung established a new Supervisory Board consisting of the board of directors of the Sachsische Staatsbank. By resolution of 25 September 1945, this new supervisory board appointed Messrs Hensel, Schmolla and Schuler to the board of directors of the Auto-Union AG.

The leading players in Ingolstadt at the unveiling of the New Meisterklasse, from the right, Dir Schulz, Dr Carl Hahn, Dr Schuler and Dr Bruhn.

In March 1946, Dr Schuler embarked on a trip to the western zones to find out about the state of affairs there. The board assigned him general power of attorney and authorization to carry out all legal transactions for Auto-Union AG in the western zones.

The expropriation and its consequences

Auto-Union AG, which had been lucky to have been little affected by bomb damage, was almost completely dismantled in the summer of 1945 on the orders of the Russian occupying powers. This confiscation was formalized in SMA order No. 124 on 30 October 1945. A state owned enterprise, "Sachsische Aufbauwerk" was founded in place of Auto-Union AG with the few remnants of machinery and equipment left behind by the Russians. In order to keep the company functioning, basic manufacturing of pots and pans and agricultural tools commenced.

On 1 July 1948, the State Government of Saxony informed the AG that the Soviet asset seizure had been confirmed by SMA Order No. 64 of 17 April 1948 and was final. On 17 August 1948 Auto-Union AG was deleted from the Chemnitz Commercial Register.

After several trips to the west, Dr. Schuler finally moved to the west in autumn 1947. Hensel also moved west a year later, in the autumn of 1948. Schmolla, had been arrested by the Russians in May 1946 and was still in custody. He was not released until January 1950.

On 29 November 1948, Mr Hensel and Dr. Schuler applied to the Munich Local Court to register a branch of Auto-Union AG in Ingolstadt. By doing so they created a starting point for the refoundation of Auto-Union AG after its deregistration in Saxony.

Since the supervisory board of the AG was still in the "eastern zone" and was unable to act in the west, directors Hensel and Dr. Schuler applied to the Munich District Court for an emergency supervisory board. This was appointed on 1 August 1950 with attorney Dr. Oehl as chairman, Dr. Heinrich Koppenberg and Dr. H. Muller. This emergency supervisory board reappointed Mr. Hensel, Schmolla and Dr. Schuler, as executive board of the AG.

At the general meeting of the AG on 11 November 1950 it was agreed Ingolstadt would be the seat of Auto-Union AG.

New Beginning in Ingolstadt

Messrs. Dr. Bruhn, Dr. Werner, Dr. Hahn had initially gone to Bavaria, where they met in the branch of Auto-Union AG in Munich. There they made the decision to organize the spare parts supply for the many tens of thousands of DKW cars still in operation in the western zones, since it was not to be expected that spare parts would be available from Saxony. Suitable facilities were found in Ingolstadt and negotiations were in the initial stage when Dr. Bruhn was arrested by the English, during a trip to his birthplace in Fleckenburg in Schleswig-Holstein. Dr. Werner and Dr. Hahn then also left the Bavarian area so the establishment of a Central Depot for Auto-Union Spare Parts G.m.b.H. in lngolstadt, was carried out by Messrs Burghalter, Heckel and Schittenhelm, all former Auto-Union AG employees, in December 1945. In establishing the new 'Zentraldepot' company, it was accepted by all parties that it was violating the AG's license rights. However, since the logic of establishing a supply of spare parts for the three western zones was obvious, on 1 February 1947 Dr Schuler, on behalf of Auto-Union AG, approved the sole right to manufacture and sell Auto-Union spare parts to the 'Zentraldepot.' The AG secured its influence by acquiring an option right of 50% of the business shares and a seat on the new company's advisory board. The prior 'illegality' was quietly ignored.

Outside of the eastern zone, the main assets of Auto-Union AG were - apart from the Spandau plant - the branches in Frankfurt on Main, Munich, Hanover and Nurnberg. These branches were officially controlled by Chemnitz in a single branch GmbH. Since these branches were more or less directionless after the collapse, Dr. Bruhn in 1945 had initiated their merger under an emergency association from lngolstadt. Mr Burghalter was appointed head of this emergency association. Since this was also very useful to the interests of Auto-Union AG, the board decided to consolidate these four branches further. Thus, on 25 March 1947, a new branch company was established in Ingolstadt in addition to the existing Central Depot called Auto-Union GmbH. Auto-Union AG had an irrevocable option of shares in the new company, which was used to acquire all the western assets of the former AG, with the exception of the Spandau plant, the Berlin branches and the trademarks and patent rights. However, the new company was granted a free right of joint use of the AG's industrial property rights.

Reestablishment of Auto-Union vehicle production
An increasing number of former senior employees from Auto Union AG were now grouped around the two lngolstadt companies- the Central Depot (spare parts supply) and Auto-Union GmbH (car repair and administration). In early 1947, Dr Bruhn was finally released from English custody and returned to his home in Holstein. Dr. Bruhn was invited to join the executive committee of Auto-Union GmbH.

Kurt Schwenk and his contribution to the resurrection of DKW, the F89L Schnellaster.

With the supply of spare parts running reasonably well, the idea of manufacturing vehicles was considered. The board of management of the AG authorized Auto-Union GmbH to prepare a program for the necessary technical development work. Through 1947, with the active participation from the technical team at the Central Depot, design and development progressed on what would be the DKW Schnellaster F89L and the DKW motorcycle RT125. At that time, it was still completely open which of the three companies - AG, GmbH. or Central Depot should become the production entity. The Central Depot was eliminated from the running and its parts supply contracts were terminated between February 1947 and June 1948 as it was clear to the AG that the new manufacturing company, once established would have the right to manufacture spare parts.

Four of the key players in the new Auto-Union, left to right: Technical Director, William Werner, Cologne banker, Frederich Carl Freiher von Oppenheim, Managing Director, Richard Bruhn, and Deputy Director, Carl Hahn.

Money was necessary to carry out Auto-Union’s development program. After long negotiations, Baron Friedrich Carl von Oppenheim joined the working group. Financing negotiations were conducted with third parties by the working group and the AG and after the currency reform of June 1948, money began to flow. However, given the uncertain conditions in the east at the time, no financiers were willing to grant the company loans. The 'taint' of the 'Eastern Zone' applied equally to Auto-Union GmbH due to their connection via the parent Auto-Union AG company. The working group proposed a new production company be set up in late 1948 that was not associated with Auto-Union AG. The only thing left was to found a new GmbH, the fourth company of that name. This new company would also be named Auto-Union GmbH, while the first "old" Auto-Union GmbH was renamed "Industrie-Auffang GmbH."

By 31 December 1948 the Central Depot was transferred from the AG to the 'mysterious' new GmhH with the intention to then transfer it to the "new" Auto-Union GmbH once it was formally established. . After lengthy negotiations, the new Auto-Union GmbH was founded on 3 September 1949 and retrospectively backdated to 1 January 1949, with a starting capital of 3.0 million DM and based in Ingolstadt. The foundation shares were taken over by "IndustrieAuffang GmbH", Bankhaus Oppenheim, a Treuverwaltung GmbH (trust foundation) founded by Auto-Union AG and the new Auto-Union GmbH. The representatives of the joint venture were Dr. Bruhn, Dr. Hahn and Baron von Oppenheim. Branch assets and the spare parts business was taken over from the Central Depot, while the Oppenheim bank and the joint venture secured the licenses for production and the options for future patents. It further noted that the new Auto-Union GmbH was not a subsidiary of Auto-Union AG, but a legally independent company.

Production begins in Dusseldorf and Ingolstadt


In August 1949, before the official founding of the new Auto-Union GmbH, the first F89 L Schnellaster truck model was completed. Three months later, the first DKW motorcycle RT 125 W (= West) was delivered. DKW was back! 504 Schnellaster and 500 motorcycles left the factory in lngolstadt in the first year. People were already working feverishly on preparing a car for production. Here, Auto-Union were the beneficiaries of a stroke of good fortune, which made the start of production much easier. It is generally known that the body of the first DKW post-war car (type F 89 P) essentially corresponded to that of the DKW F9 developed before the war.

The DKW phoenix arises. The Schnellaster (including an early prototype with unusual headlamps), the Baur bodied DKW F10 and the prototype F89P.

Before the war, Auto-Union AG had placed orders for the production of the pressing tools for the corresponding body parts with the Allgaier company in Uhingen, Swabia. Some of these were already completed and some were in a semi-finished condition when the F9 project was stopped due to the outbreak of war. https://dkwautounionproject.blogspot.com/2017/07/1939-dkw-f9-prototype.html

The state of the Rheinmetall-Borsig Werkes when DKW purchased the factory. The plant had built aircraft and was bombed to rubble during the war.

Those tools were still available when Auto-Union made inquiries with Allgaier after the war. Some of them had been stored outdoors and damaged by the weather and were in poor condition. With some effort the presses were repaired and restored so that the production of the F89P could begin. Needing a new production plant for the construction of the new model car, Auto-Union GmbH purchased a war damaged aircraft plant from Rheinmetall-Borsig-Werke in Dusseldorf. Production of the F89P commenced on 1 March 1950. https://dkwautounionproject.blogspot.com/2017/06/dkw-f89p-new-meisterklasse.html

The 'other' companies
Auto-Union Berlin GmbH was founded in the spring of 1949 as a pure subsidiary of Auto-Union AG and consisted of the former Berlin branches of Auto-Union and the Spandau plant, where the wooden DKW car bodies had been built before the war. While the branches again devoted themselves to sales and customer service, the Spandau plant was converted to the production of DKW electrical and transmission parts. From August 1950, with the start of series production of the F89P in Dusseldorf, the Spandau plant commenced supplying electrical and transmission parts to Auto-Union GmbH.

So, in 1950 there were three companies with the name Auto-Union:- Auto-Union GmbH as a production company with its plants in Ingolstadt and Dusseldorf,Auto-Union Corporation, now based in Ingolstadt, as a pure holding company for Auto-Union AG, and its subsidiary, Auto-Union Berlin GmbH, with the Spandau plant and the customer service centre on Cicerostrasse. Finally, it should be noted that Auto-Union AG existed until 1979, having been based in Saarbrucken since the end of 1965, when it was renamed Autania at the insistence of Audi NSU Auto-Union AG

This is my translation of the article published in German in the AUVC Nachrichten Vol 52 March 1988. The original is available here: https://auvc-archive.blogspot.com/2020/03/auvc-nachrichten-vol-52-march-1988.html