Lindsey Graham (20:57)
It'S spring 1952 in the Reuter Metal Works in Stuttgart, West Germany, one year after Porsche's debut at Le Mans Ferry. Porsche walks through the Porsche section of the factory floor, nodding at the workers assembling 356 road cars. Ever since the car's success at the 24 Hours of Le Mans, Porsche has doubled its volume of orders. Fairey pulls aside a curtain that separates one corner of the factory. And here, in a space barely large enough to fit two cars, is Porsche's research and testing department. Right Now, a disassembled 356 super light stands on a jack. Blueprints are spread across a nearby workshop bench. And senior engineer Wilhelm Hild is wiping his greasy hands on a rag. Ah, Herr Porsche. Are you here to inspect next season's competition? Carries gaze wanders to the Super Light. It's missing its body panels, its wheels and its axles. Well, I did. Doesn't look like there's much to look at at the moment. Oh, there's plenty to see. Look at this. Wilhelm leads Fairy to the rear of the car where the engine is mounted. I've stripped her down so we can see every nut and bolt. I want to find ways to take some weight off because if I can, we should see an improvement in the power to weight ratio. Fairey lays out a technical drawing on the workbench. I've been thinking about the race car myself. Jotted down a few ideas. Bilhelm leans closer to examine Fairey's design. That looks like a completely different car. It is a completely different car. I'm calling it the 550. The super light's done well, but it's just not fast enough compared to the rest of the field. We can try to shave off a few ounces here and there, but it's not ever going to make a difference. The Super Light just can't overcome the flaws in the Beetle we based it on. So we're not going to improve the Super Light, we're going to build its successor. Exactly. Starting again from scratch. And we will not be bound by the limitations of the Volkswagen. We can put the engine in the middle of the car and that gives us even better balance and handling. It'll need a completely new chassis. I know. A tubular space frame. Light and strong. Wilhelm picks up a pencil. Hey, you mind? No, go ahead. Wilhelm sketches a few rough lines over Fairey's precise technical blueprints. These axle mounts, you know, if you raise them up a bit, the car will run lower to the ground. It'll mean you'll need a firmer suspension. The aerodynamics would be better. Good. I'm hoping for every improvement we can find, but overall it's not a practical design. I mean, remember, we still started with the engine in the middle of the 356. We had to move it back to make more internal space. It doesn't matter. The 356 was a road car that races the 550. That's going to be a race car the customers can drive on the road ferry. Porsche's vision for the 550 leaned even further into the idea that success on the racetrack would drive Porsche to higher sales. And after it debuted, the 550 would gain a reputation as a giant killer by beating more established sports car manufacturers on the track. But its raw power meant that it'd be a killer on the roads, too. During the development of the 550, Porsche continued to race the 356 super lights. And they continued to win. In June 1952, Auguste Boullay and Edmond Mouche won the 1.1 liter class in the 24 Hours of Le Mans for the second year in a row. And this time, their Superlight was the 11th vehicle to finish in the overall. But Fairey was confident that the 550 would be even better. Porsche's increasingly experienced race car engineers built two prototypes of the 550. Both featured a tubular steel frame chassis with space for the engine in the middle for superior weight distribution and handling. That immediately gave the 550 an inherent advantage over the rear engine 356. And initial tests showed it would knock seconds off every lap at Le Mans. But Fairey faced a race against time to get the 550 ready for its debut. He'd set a target of entering the 195324 Hours of Le Mans. But the clock was ticking and the 550 fell behind schedule when Porsche spent several weeks moving out of the Reuter Metalworks and into its own factory on adjoining land. Trying to make up for lost time, Fairey outsourced the specialized work of building the 550s aluminum body panels. But unlike the bodywork, Fairey was determined to keep engine production in house. Porsche engineer Ernst Furman had to come up with a radical new power unit, a 1.5 liter air cooled engine. The engine he designed promised significantly more power and higher revving capabilities, essential requirements for competing at the highest levels of motorsport. But the complex design also took time to perfect. And by spring 1953, when the 550 prototypes should have been ready to make their debuts, the firm and engines were still incomplete. Fairey could either delay the launch of the 550 until it was ready, or he could find a stopgap solution. He chose the latter. Porsche placed an order for two 1.5 liter engines from Volkswagen and hurriedly inserted them into the prototype 550s. Although the purchased engines produced only 98 horsepower compared to the Furman engine's 110, they would have to do for now. Then, on May 31, 1953, the 550 made its racing debut at the Nurburgring circuit in West Germany. And despite its underpowered engine, the car raced to victory in its class. Two weeks later, two 550s took part in the 195324 Hours of Le Mans. The Porsche is streaked ahead of the other cars in the 1.5 liter class and finished 19 laps ahead of their nearest rival. The 550s even beat out all but one of the cars in the class above them. With two wins and two appearances, the 550 was a champion even without its radical new engine. But by the summer of 1953, the first four Furman power units were ready. They went inside four new 550s that were slightly altered from the original two prototypes, with side rails swept up over the rear axle shafts, allowing the entire engine and transmission to be removed from underneath the car, making maintenance far easier. The new 550s also had an improved rear suspension that increased stability, especially under braking. But this newest iteration of the 550 had a low key debut on a hill climb in July 1953. But it soon hit the headlines in November of that year when Porsche sailed four 550s across the Atlantic to take part in the world's toughest race. The Carrera Panamericana was a four day rally across Mexico. Its eight stages covered almost 2,000 miles on roads and unpaved dirt tracks. Just finishing the Carrera Panamericana was seen as an achievement to be proud of. But Fairey wanted to win, not just the race. Ever since the Ford Model T had first rolled off Production Line In 1908, the United States had been the world's biggest car market. By the 1950s, one in every two Americans owned a car. And America accounted for more than half of global car sales. That was far higher than West Germany, where only one in 15 people owned a car and less than 10% of global car sales occurred. Fairey had already dipped a toe into the American car market. The previous year, Studebaker had commissioned Porsche to design and produce a prototype four seat sedan. And during a trip to America to discuss Studebaker's design, Fairey had met with American car dealer Max Hoffman, who specialized in importing European cars. To the United States. Although Max had sold a handful of 356s to American buyers, he revealed that few Americans had heard of Porsche. Most preferred brands like Jaguar and Mercedes that were better known across the Atlantic. But Fairey knew that a successful Porsche showing in a major race on the other side of the Atlantic would be a powerful marketing tool. And he got his wish in the 1953 Carrera Panamericana. One of the original Beetle powered prototypes finished top in its class. But it was the following year's race that truly put Porsche on the map. That year, Furman powered 550s dominated. They topped their class and finished third and fourth overall, even beating competitors from the class above with vastly larger engines. And the 550s didn't just prove their speed, they also showed their reliability. Although 65 of 150 entrants failed to finish, all seven Porsches completed the race. Porsche's success at the Carrera Panamericana translated into increased sales. In 1951, before the 550 debuted, Porsche sold around 500 cars, of which less than 50 made their way across the Atlantic. By 1954, though, overall sales had quadrupled to more than 2,000 cars. And now almost half were transatlantic exports. In America, there was growing and intense demand for the brand that appeared seemingly out of nowhere to dominate the racetrack. And American importer Max Hoffman didn't just sell Porsche's primary production model, the 356. Several wealthy customers asked him for their own versions of the 550. Race Carry was happy to oblige. For about $80,000 in modern money, Porsche would provide them with a custom version of the 550 named the Spider. And since the 550 Spyder was street legal, they could drive it to and from the racetrack. But the Spider's speed made it difficult to control. Among the 80 customers who bought their own version was Hollywood actor James Dean, who took delivery of his new vehicle in March 1955. Six months later, Dean was driving through Salinas, California when he crashed head on with a Ford sedan. When Dean reached the hospital, he was pronounced dead upon arrival. After three years of success in racing and sales, Porsche had hit a major bump in the road. The death of a popular Hollywood icon behind the wheel of a 550 spyder meant that Porsche hit the headlines again. But this time for all the wrong reasons. Porsche was no longer best known for its victories on the racetrack before the mangled wreck that killed James Dean and the PR crisis that followed would threaten to overshadow everything that ferry had worked so hard to achieve. As a contractor for the nsa, Edward Snowden had access to a range of top secret government programs. But as he learned more about these clandestine operations, he came to understand a devastating secret the government was conducting mass surveillance on its own citizens. Hi, I'm Lindsey Graham, the host of Wondry show American Scandal. We bring to life some of the biggest controversies in US History. Presidential lies, environmental disasters, Corporate fraud. In our latest series, Whistleblower Edward Snowden changes the national conversation about privacy on the Internet as he risks his own freedom and his family's well being. Follow American Scandal on the Wondery app or wherever you get your podcasts. Listen to all episodes ad free and be the first to binge the newest season only on Wondery. You can join Wondery in the Wondery app, Apple Podcasts or Spotify. Start your free trial today. We know you want to delve into more stories of legendary leaders and the pivotal moments that define their careers. So now Wondery gives you exclusive episodes of Business Movers. Explore the triumphs of the retail revolution with a season about Sam Walton building a Walmart world or what it takes to be named the King of Kicks in the season becoming Nike or how the golden arches have made it to almost every corner of the world in the McDonald's Invasion season. With Wondery, you get early access to all new episodes, ad free listening and exclusive access to more true stories of business leaders who risked it all. Wondry members also get exclusive ad free access to hundreds of other chart topping podcasts like American Scandal, History Daily and Business Wars. Elevate your business movers experience with Wondery. Sign up by clicking the link in the episode description or head over to wondery.com/ it's early October 1955 at the Porsche factory in Stuttgart, a few days after the death of Hollywood actor James Dean. Fairy Porsche puts down his pen and picks up the telephone on the corner of his desk. Hello, Ferry here. Ferry. They're calling the spider a killer car. Now Ferry recognizes the voice of Max Hoffman, the car dealer who imports Porsche vehicles to the United States. Although Max was born in Austria, he moved to America when he was still a child. And now he speaks German with an American twang. Fairy's heard this distinctive accent plenty over the last few days, because the death of James Dean has Max spooked. Oh Max, it's good to speak to you again. I take it they're still reporting on the crash over there? Still reporting on it, Fairy. It's the only thing they're reporting on every newspaper, every radio station. They all lead with James Dean being killed in a Porsche Spider. They're saying the car's cursed. It could ruin us over here. Oh, Max, calm down. I'm sure it's not that bad. No. Well, I don't think I can sell these things now. Who wants the car that killed James Dean? Why do we tell people? Very well. Probably the truth. It was a tragic road accident. I mean, there are thousands of those every day. But they blame the car. We need to issue a statement. Something about safety. No, no, no. Absolutely not. Porsche will make no official statement. But, Fairy, you have to reassure people. Reassure them of what, though, Max? That our car is safe. It is. It's engineered to the highest standards. This was driver error, Max. Or maybe just bad luck. But it was definitely not the fault of the car. But the American public needs something. I need something. All right. We continue to emphasize our engineering. We'll highlight our racing successes. These things prove Porsche's reliability under extreme stress. But we don't talk about this single incident. So we just stick our heads in the sand and hope it blows over. No, we're not going to run from anything. We're going to project confidence and stand by our product. All right. God. No statement. I hope you're right. Because if the American market turns sour on us, it won't. Just stay focused on our strengths and we'll weather this storm. You know, Fairy, this kind of thing, they can take a brand down in America. I don't think you understand. We love our movie stars over here. Yeah, apparently so. But your movie stars love Porsches, right? And I don't think that's gonna change. After ending this call, Fairy. Portia sat back and let out a slow breath. He was more worried than he let on. To Max Hoffman, the Spider was going up against the ghost of James Dean. And Portia hadn't dealt with with a public relations crisis this large before. But Ferry felt that drawing more attention to the crash was the worst thing to do. Instead, he stuck by his gut. He'd fasten his seatbelt and ride out the negative publicity. But the road ahead would soon take an unexpected turn. James Dean died just as Americans were beginning to focus more on road safety. At the start of the 1950s, an average of 38,000 people were killed on the country's roads every year. President Dwight D. Eisenhower had launched America's first Safe driving day in December 1954, in which he challenged the country's drivers to go 24 hours with no crashes. That unrealistic challenge went unmet. 51 people were killed in traffic accidents on that day. And now James Dean was the highest profile victim of a road traffic accident that Americans had ever known. In the immediate aftermath of Dean's death, news reports spent days going over the grisly details. They focused on the high speed sports car that Dean was driving, speculating that the 550 spyder was too fast to control and too dangerous to drive. But Ferry, Porsche's strategy to ride out the PR crisis soon paid off. By refusing to release a statement about Dean's crash. Ferry didn't add any fuel to the fire and the media feeding frenzy soon moved on. Reporters focused their attention back on the wider road safety debate. And after the initial emotional reaction had abated, experts agreed that Dean's death wasn't an isolated incident caused by a single high speed sports car. It was part of a larger pattern of crashes caused by poor driving standards. Porsche's reputation was even defended by an unlikely figure, James Dean himself. A few days before the crash that killed him, Dean had been interviewed by broadcaster Gig Young about road safety. In it, Dean claimed that American roads were not dangerous because of the speed of the cars on them, but because of the standards of their drivers. Jimmy, we probably have a great many young people watching our show tonight, and for their benefit, I'd like your opinion about fast driving on the highway. Do you think it's a good idea? Good point. I, I used to fly around quite a bit, you know, I took a lot of unnecessary chances on the highways and I started racing and now I drive on the highways. I'm extra cautious because no one knows what they're doing. Half the time you don't know what this guy's gonna do with that one. And once reporters stopped blaming Porsche for Dean's death, importer Max Hoffman anxiously waited to see what impact the crash would have on the sales. When the next set of figures came in, Max got an unexpected surprise. Demand for Porsche cars hadn't decreased. It gone up. In the year after Dean's death, sales increased 25%. Compared to the previous 12 months. Porsche had not been hurt by James Dean's fatal crash. It had seemed to have benefited. Dean's choice of vehicle imbued the Porsche brand with an edgy, glamorous mystique. Thrill seekers were attracted by Porsche's association with Dean, whose early death transformed him into a symbol of eternal youth and rebellion. And America wasn't the only market in which Porsche was growing. Global sales reached 5,000 units for the first time in the five years since Ferdinand Porsche had died. The company he'd founded had hit new heights under his son. Fairey had seen sales increase tenfold. And it was all thanks to his radical decision to speak steer Porsche down a different road. His father Ferdinand's vision for Porsche had been as a mass market car. But Fairey's need for speed had transformed the company into a sports car manufacturer. And soon Fairey would shift even further from his father's original vision. Porsche's core product, the 356, traced its design back to Ferdinand's pre war Volkswagen. Its platform had limitations in terms of space, refinement and future performance potential. But the limited edition 550 Spyder had proven that Porsche could create its own cars from the ground up. And soon Porsche would begin working on its next product, a high performance road car that would inherit the mantle from the 356. This next generation Porsche would need more power, greater comfort and a modern design reflecting the company's growing sophistication and ambition. It would take years before this new car emerged from the Porsche factory. But when it did, the Porsche 911 would define the brand for decades to come. From Wonder Eat this is episode three of Rehabilitating Porsche for Business Movers. On the next episode, Porsche enters a golden age with the launch of its most iconic car. But Ferry Porsche faces another debate over his vision for the company when a car buyer's focus shifts from acceleration to efficiency. If you like business movers, you can unlock exclusive episodes found nowhere else on Wondery and access new episodes early and ad free. Join Wondery in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. And before you go, tell us about yourself by filling out a survey@wondery.com survey if you'd like to learn more about Porsche, we recommend. Excellence was expected by Carl Ludwigsen, Nazi Billionaires by David De Jong and we at Porsche by Ferry Porsche. A quick note about our dramatizations. In most cases, we can't know everything that happened, but all our reenactments are based on historical research. Business Movers is hosted, edited and executive produced by me, Lindsay Graham for Airship. Audio editing by Mohamed Shazi Sound design by Molly Bach. Our supervising sound designer is Matthew Filler. Music by Thrum. This episode is written and researched by Cody Hoffmuckle Senior producer Scott Reeve. Executive producers are William Simpson for Airship and Aaron o' Flaherty, Jenny Lauer Beckman and Marshall Louie for Wondering.
