German Company Seeking Bailout Is Tied to Auschwitz

German Company Seeking Bailout Is Tied to Auschwitz

Germany’s Nazi past continues to unsettle its present. Privileged clans and mighty industries alike have subjected themselves to public scrutiny and painful mea culpas over activities and associations before and during World War II. But the latest controversy links the poisoned mementos of Auschwitz to the ongoing global financial crisis in a still unraveling tale of leveraged buyouts, corporate hubris and financial humiliation.

At the center of the drama is Maria-Elisabeth Schaeffler, 67, the grande dame of one of Germany’s richest industrial clans. Last year she spearheaded her car-component company’s dramatic 12 billion euro takeover of a larger rival that left most of Germany breathless — but not quite with admiration. Such buyouts had more often been associated with predatory foreigners than with fellow Germans. The audacious bid smacked of hubris to many Germans and angered labor unions, who warned that the Schaeffler Group was biting off more than it could chew. Indeed, it soon came under immense pressure as the global financial crisis slammed headlong into the German car industry and orders dried up almost overnight. By the end of 2008, the once proud matriarch was seen in tears on German television, leading employees in a demonstration to prod the government to bail out her hapless clan and save thousands of jobs. But given the Schaeffler Group’s “greed is good” image, it was no surprise that Chancellor Angela Merkel said nein.

Now come charges that Schaeffler’s kin profited from Hitler’s gassing of Jews in Auschwitz. Jacek Lachendro, deputy director of the Auschwitz Museum’s research department, told Spiegel TV, a German program associated with the weekly newsmagazine, that bales of human hair, which are still on exhibit in the Auschwitz Museum, were found at a factory in Kietrz, Poland, at the end of World War II. The hair, allegedly from victims gassed at the infamous concentration camp, was supposedly used to manufacture upholstery and carpets. The factory’s name was Teppichfabrik G. Schoeffler AG. “Our historians say Schoeffler is Schaeffler,” the museum spokesman says, adding that the difference is due to a mere misspelling in the documentation. That, according to the museum, links Auschwitz to Wilhelm and Georg Schaeffler, the brothers who founded the company that is now the Schaeffler Group.

Lachendro says tests conducted on the hair turned up traces of Zyklon B, the deadly pesticide used to gas Auschwitz prisoners. Lachendro presented the Spiegel TV reporters with a bale of cloth that he said was made from human hair. He said former workers at the alleged Schaeffler factory in Kietrz testified that at least two train-car loads of human hair were delivered to the factory from Auschwitz.

What makes the Schaeffler case particularly interesting is the timing of the Auschwitz allegations. It may be part of the negative reception of the controversial corporate buyout, originating from a source who may want to damage the Schaeffler family, spreading rumors about its activities during the Nazi period. Indeed, the clan seemed to have been prepared for the arrival of such charges. In early February, after rumors began to appear on the Internet that the Schaeffler clan had Nazi skeletons in its closet, the family made public a study it had commissioned in 2004 on its history during the Nazi period.

After studying private family archives and public documents, Gregor Schöllgen, professor of contemporary history at the University of Erlangen-Nuremberg, concluded that Wilhelm Schaeffler, Maria-Elisabeth’s brother-in-law, cooperated with the Nazis as necessary for personal gain, but that in this way he was not unlike many small entrepreneurs during the Nazi period. He says there is no evidence that Schaeffler was an enthusiastic Nazi or a supporter of Hitler’s plans to annihilate Europe’s Jews. What does Schöllgen think there is to the story about the Auschwitz hair “Based on what we know now Nothing,” he says.

Speaking for the family, Schöllgen says the Auschwitz Museum’s claims are actually based on the records of another company that absorbed the Schaeffler’s Kiertz operations, so there is no direct link to the family’s company. Schöllgen says if the Schaefflers were involved in Holocaust crimes, then documentation should exist. The Nazis treated the material coming out of the camps like they were trading cotton rather than the remains of human beings, Schöllgen says, and he has come across no documents such as order forms or any receipts linking Schaeffler to the hair. Says Schöllgen: “The evidence is still missing that shows that Wilhelm Schaeffler was actually involved in these crimes.”

Still, the history that Schöllgen uncovered is a reminder of the pervasiveness of Nazi policies. In 1940 Wilhelm Schaeffler acquired a company called Davistan AG in the town of Kietrz. Davistan was a former Jewish-owned manufacturer of upholstery and carpets that had gone bankrupt. In an interview with Schöllgen in the Süddeutsche Zeitung on March 2, Davistan is described as the “cornerstone of the current Schaeffler Group.” The company belonged to a Jewish family named Frank that ran into trouble during the Great Depression and left Germany in 1933 as anti-Semitism began to spread. But Schöllgen says the company was not part of Hitler’s “Aryanization” program to transfer Jewish property to Germans.

Schöllgen shows that Davistan, which had 800 workers, also employed forced laborers. Although he is uncertain how many slaves worked for Davistan, Schöllgen says he believes the number was small. In 1943, Davistan also began producing armaments for the Nazis such as antitank weapons and aerial bombs. Schaeffler and his younger brother Georg, who would marry Maria-Elisabeth in 1964, fled Kietrz in 1945 as the Red Army advanced. Wilhelm was arrested by U.S. forces and served more than four years in Polish prisons after the war. The Schaefflers later settled in Bavaria and rebuilt the company, founding the textiles company INA, out of which grew the modern-day Schaeffler Group.

The family thrived after the war, but now it faces diaster. Even without the Auschwitz allegations, the foundations of the Schaeffler industrial empire have been shaken. With the German government refusing to bail her out, Maria-Elisabeth Schaeffler will have to give up a significant stake in the company to pay off creditors and could lose control of the family business. She has gambled high before and — defying the odds — won. She once said in a rare interview, “You don’t get anywhere in this world by being nice to everyone.” No one is being nice to her now.