New Boss for the Bug

While former Chancellor Ludwig Erhard is known as the architect of the postwar economic recovery that West Germans refer to as the Wirtschaftswunder, a slight, self-assured man named Heinz Nordhoff is certainly one of the nation's master builders. Because he had run wartime Germany's biggest military truck plant, U.S. occupation authorities restricted him to manual labor. The more pragmatic British tapped him to revive a Wolfsburg auto factory which had been so badly bombed that, Nordhoff was later to recall, it "didn't even smell good enough for the Russians." That plant had once built Volkswagens, and Nordhoff's success in getting it back into gear has become a legend (TIME cover, Feb. 15, 1954). By last week, when he announced that he would retire as board chairman, Wolfsburg had become horns base for West Germany's biggest industry. Volkswagen ranks fourth behind only the U.S. Big Three among the world's automakers.

Less than Perfect. Nordhoff is leaving Volkswagen because he turned 68 in January, an age, he said last week, when "it is not only customary but even a compelling need to think in time about one's successor." The years, unfortunately, have overtaken him at a moment when Volkswagen--like the Wirtschaftswunder itself--is performing at less than capacity.

West Germany is in a serious recession, and consumers are sitting on their pocketbooks. Volkswagen domestic production has dropped 25% from 1966's record high of 1,476,000 vehicles. Like U.S. automakers, the company has been hit by the safety scare. In the mini-motor field, which its beetles long dominated, VW is getting serious competition from General Motors' Opel and the German Ford. Nordhoff has been fighting the pinch with stepped-up exports and a new, cheaper ($1,121) 41 h.p. Model 1200 that he christened Wirt-schaftskrise Kafer, or "economic crisis beetle." With all that, his successor, Kurt Lotz, 54, will have plenty of problems.

Clerk to Chairman. Lotz was chosen because he seemed equal to all those problems--and more. Son of a Hessian farmer, he became a Luftwaffe general-staff major assigned to assessing war needs. "That was my first strong contact with industrial planning," he says. At war's end he took a clerk's job in Mannheim with the German subsidiary of the Swiss firm of Brown, Boveri & Cie, which makes all kinds of electrical equipment from home appliances to locomotives. Within twelve years, Lotz rose to chairman. He and the Swiss fell out over a small computer company in which he had invested to compete with U.S. computer makers, only to have it lose money. Lotz, as a result, decided to go job hunting. Volkswagen's directors offered him the $250,000-a-year post as Nordhoff's successor.

Because tall, athletically built Kurt Lotz is long on organization and diplomacy but short on knowledge of automaking, he will work in Nordhoff's shadow for almost two years, learning the complexities of the worldwide company. Nordhoff is not scheduled to step aside until the end of 1968.

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