Ford Motor Company (F) & The Tainted Origins of Germany’s Largest Company

The stocky but popular Beetle gradually captured the world’s interest after the British re-established Volkswagen as a private company in 1948. This gave Volkswagen the resources needed to acquire Auto Union (now Audi) in 1965. In 1972, Volkswagen rolled a record-breaking 15 millionth Bug off its assembly line. This made the Beetle the best-selling automobile of all time, besting at last that other great vehicular icon, the Ford Motor Company (NYSE:F) Model T. This legacy of postwar success has continued to the present day, and Volkswagen has now become the world’s third-largest automaker by a narrow margin. Its tight relationship with Porsche also continues to this day, as Volkswagen gained full ownership of Porsche in 2012.

Echoes of 1929
How devastating was the Crash of 1929? For two days in October, the Dow Jones Industrial Average (Dow Jones Indices:.DJI) suffered so violent a fall from so high a peak that it would not approach those heights in point terms for more than three decades (and in percentage terms it would take far longer). The first rival to the record point decline of October 28, 1929 came on May 28, 1962, when the Dow Jones Industrial Average (Dow Jones Indices:.DJI) fell 5.7% while losing 34.95 points. This sharp drop still fell five points short of a new record despite starting from a level more than twice as high.

Nearly $20 billion in value was wiped out by the drop, which also saw the heaviest volume since 1933, causing ticker delays of more than an hour by the close of trading. Margin calls were blamed for the cascading sales despite a 70% margin requirement instituted in response to the chaos caused by the Crash of 1929, which saw some institutions offer margin rates as low as 10%. The economy couldn’t be blamed in this instance: Good news prevailed in mid-1962, and the rather brief bear market that began during President John F. Kennedy’s first year in office was nearing its end. In fact, Kennedy economic advisor Walter Heller noted that low inflation was dampening market returns, as the market had acted as an inflation hedge for much of the Eisenhower years.

The article The Tainted Origins of Germany’s Largest Company originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends Ford. The Motley Fool owns shares of Ford.

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