German firms count cost of slave labour

A key court ruling may lead to a huge compensation bill, writes Imre Karacs

Emaciated ghosts from the near past returned to haunt the boardrooms of Deutschland AG last week, striking terror into the hearts - if such exist - of the money men of corporate Germany. The slaves who helped build fledgling German companies into global behemoths are back, demanding to be paid for their toil. This time they cannot be fobbed off.

In a landmark decision, the regional court in Bonn ruled last Wednesday in favour of an elderly Jewish woman, awarding her DM15,000 (pounds 5,400) plus interest for her work at a munitions factory in Auschwitz. This being Germany, the legal experts have not had their final say. But when the dust settles on the appeals and counter-appeals, the state is almost certain to end up with a bill of more than DM1bn, which it will be obliged to pass on to the companies that profited most from the Nazi slogan Arbeit macht frei - "work liberates".

An estimated 12 million people worked as slaves at virtually every German company during the Third Reich. Many did mundane jobs at bakeries and shoe factories; others built cars for Mercedes-Benz and guns for Krupp. They were drawn - or dragged - from every corner of the Nazi empire. Whether Poles, Jews or Russians, they were deemed "sub-human" and treated accordingly. Herded into unheated barracks and forced to work 12-hour shifts on meagre rations, large numbers died of disease, hunger or maltreatment. Most of the survivors have received no compensation.

For 50 years German industry kept its guilty secret locked away in company archives. But with most of the Nazi-era bosses dead, the facts are emerging. The best peek to date into the Nazis' empire of slaves comes from a book published last year by the historian Hans Mommsen. Professor Mommsen had been given a free run of Volkswagen documents. The company agreed to fund the study, at a cost of more than DM1m.

That was a brave decision by Volkswagen, because its history is not a pretty one. It was founded, with the help of Adolf Hitler, by Ferdinand Porsche, described by the book as a "morally indifferent" Nazi. Most of its 16,000 employees were slaves, many of whom died at the Wolfsburg plant which remains the hub of VW's factories. Everyone knows that Hitler personally approved the beetle-shaped prototype of the "People's Car". Less familiar is VW's other product line: weapons, including V1 rockets.

After the war, Volkswagen switched its attention to the beetle, and proceeded to conquer the world. Professor Mommsen's is a classic German story, charting the prosperity of a company through the war years and its miraculous rebirth. It is also typical in the way the enterprise grew from its beginnings, sustained by slaves who have never been paid. It appears that, however guilty Volkswagen boss Ferdinand Piech feels about his grandfather, the other Ferdinand, the sentiment lacks the force needed to prise open his wallet. A DM12m "donation" has been made to the countries in Eastern Europe that lost people to the Wolfsburg assembly line, but not one pfennig has been paid directly to individualsurvivors.

It would be unfair, however, to suggest that all German companies have shirked their responsibility to ex-employees. In the Fifties a group of corporations sought access to the world market by making amends. I G Farben, Krupp, AEG, Siemens and Rheinmet got together and settled for a one-off payment of DM75m to the Jewish Claims Conference. Nobel and Mercedes-Benz chipped in 30 years later. As a result, about 15,000 survivors are up to DM5,000 richer.

Still, these people keep coming back for more. Every year, the shareholders' meeting of the Nazi-era chemicals giant I G Farben is disrupted by ex- slaves. The company that manufactured the cyanide tablets used in the gas chambers of Auschwitz is now a shell, kept alive merely in order to pursue its own property claims in eastern Germany. After the war I G Farben was broken up into BASF, Hoechst, and Bayer - now among the largest chemical concerns in the world. They will not pay the slaves, either.

And why should they? The German state has dispensed DM100bn in compensation to Holocaust survivors, though none specifically to slave labourers. A line had to be drawn, and this is where Germany is drawing it. According to German press reports, the Bonn government has been urging the big companies not to settle.

"The slaves are the biggest group of survivors," says Lothar Evers, head of the Information and Advice Centre for Nazi Victims. He estimates that there may be up to 100,000 ex-slaves still alive who have received no compensation. The total bill would run to billions: "This is what makes the German government so frightened."

The DM15,000 won by Rywka Merin last week could open the floodgates to similar suits, generating a great deal of negative publicity for the people who brought you "Vorsprung durch Technik". The Social Democrats and the Greens have proposed the establishment of a fund to help ex-slaves, to be financed by the companies concerned. Ferdinand Junior may soon be reaching into his pockets after all.