Editing Borgward (section)

===Controversial company bankruptcy===
In 1961, the company was forced into liquidation by creditors. Carl Borgward died in July 1963, still insisting the company had been technically solvent. This proved to be true in the sense that after the creditors were paid in full, there was still 4.5 million Marks left over from the business.<ref>[http://www.histomobile.com/dvd_histomobile/usa/192/history.htm Borgward History<!-- Bot generated title -->] {{webarchive |url=https://web.archive.org/web/20120320031827/http://www.histomobile.com/dvd_histomobile/usa/192/history.htm |date=March 20, 2012 }}</ref><ref name=Borgwardbankruptcy07>{{Cite web|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote="Fraglich ist aus heutiger Sicht, ob Borgward tatsächlich zahlungsunfähig war: Am Ende des Verfahrens werden die Ansprüche aller Gläubiger befriedigt, es bleiben sogar 4,5 Millionen Mark übrig."|access-date=2013-05-14 |publisher=ZEIT ONLINE|first=Hellmuth |last=Vensky|date=27 July 2011}}</ref>

Reports of difficulties at Borgward surfaced in an article that appeared in Germany's news magazine ''[[Der Spiegel]]'' on 14 December 1960.<ref name=Spiegel14dez19605101>{{Cite journal|url= http://www.spiegel.de/spiegel/print/d-43067968.html |title=Der Bastler |quote="Wie kein anderer Automobilfabrikant der Welt hetzte Carl F. W. Borgward in seinen drei Werken von Neukonstruktion zu Neukonstruktion…. Modelle, Typen und Marken entstanden und verschwanden, tauchten mit abgewandelten Formen, veränderter Ausrüstung und ausgetauschten Marken wieder auf und hinterließen beim Käufer die Empfindungen eines Wechselbades." |access-date=2013-05-15 |journal=[[Der Spiegel]] |issue=51 |editor1-first=Rudolf |editor1-last=Augstein |editor2-first=Hans Detlev |editor2-last=Becker|date=14 December 1960}}</ref> A ''Spiegel'' article was highlighted by means of a picture of Borgward, cigar in mouth, on the magazine's front cover. It was strongly critical of his business approach, and included many of the arguments later advanced to explain or justify the company's demise. The widest range of cars from any manufacturer in Germany, produced by three till recently operationally autonomous companies (Borgward, Goliath and Lloyd) was supporting a turnover of only 650 million Marks, placing the overall sales value from the combined Borgward auto businesses only in fifth position among Germany's auto-makers. The 70-year-old Carl Borgward's "hands-on" insistence on an increasingly manic proliferation of new and modified models featuring adventurous, but under-developed technological innovations (''fast manisch[e] Konstruierwut'') gave rise to components which too often did not work, broke down or fell apart, resulting in massive bills for pre-delivery remediation and/or post delivery warranty work that found their way back to the company.{{Citation needed|date=February 2018}}

The December 1960 ''Der Spiegel'' article was not the only serious public criticism targeting Borgward at this time: suddenly stridently negative (if more succinct) comments also turned up in the mass-market ''[[Bild]]'' newspaper and in television reports. Critical media commentaries also appeared concerning large loans to the Borgward Group provided by the [[:de: Bremer Landesbank|local]] [[Landesbank]].<ref name=Borgwardbankruptcy01>{{Cite news|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote="Es ist nicht die einzige kritische Geschichte, die in diesen Tagen über Borgward geschrieben wird. Heutige Fans der Marke vermuten eine Verschwörung der Konkurrenz hinter dem plötzlich so schlechten Image, das Berichte in Bild-Zeitung und Tagesschau hinterlassen.... Die öffentlich-rechtliche Bremer Landesbank gewährt dem Konzern hohe Kredite, die [auch] in den Medien kritisch thematisiert werden."|access-date=2013-05-14 |newspaper=[[Die Zeit]]|first=Hellmuth |last=Vensky|date=27 July 2011}}</ref>

It is apparent that the business was confronting cash-flow difficulties at the end of 1960. Capital intensive businesses such as auto manufacturing use their expensive machines and tools most efficiently if they use them constantly at full capacity, but the car market in Europe in the 1950s/60s was more seasonal than today, with sales diminishing in Winter, then peaking in the early summer months: Borgward's inventory of unsold cars at the end of 1960 was higher than usual, reflecting ambitious growth plans, most obviously in respect of the [[United States]] market<ref name=Borgwardbankruptcy02>{{Cite news|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote="Neben den Problemen mit der Modellpolitik schwächen rückläufige Verkaufszahlen im für Borgward wichtig gewordenen US-Markt die Liquidität der Firma.. "|access-date=2013-05-14 |newspaper=[[Die Zeit]] |first=Hellmuth |last=Vensky |date=27 July 2011}}</ref> The December 1960 ''Der Spiegel'' article speculated that of the 15,000 Borgward cars ordered by the North American dealers in 1960 (and of the 12,000 delivered to them) 6,000 might have to be taken back following a slump in North American demand. (Borgward was not the only European auto maker hit by a North American slump in demand for imported cars during 1960. In the same year two ships carrying [[Renault Dauphine]]s were turned back in mid-Atlantic because the docks in New York were overcrowded with unsold Dauphines.<ref name="time 02">{{cite magazine | title = Autos: Compacts in Paris | magazine=[[Time (magazine)|Time]] | url = http://www.time.com/time/magazine/article/0,9171,895046,00.html#ixzz0tiTIYrQg | archive-url = https://web.archive.org/web/20101031002944/http://www.time.com/time/magazine/article/0,9171,895046,00.html#ixzz0tiTIYrQg | url-status = dead | archive-date = October 31, 2010 | date = October 17, 1960}}</ref>)

At the end of December 1960 Borgward approached the bank for a further one million Marks of credit, the loan to be backed by a guarantee from the [[Bremen (state)|Bremen regional]] government which initially the Bremen [[Senate of Bremen|senators]] agreed to provide. However, following the flood of critical press comment the senators withdrew their guarantee. They now required Carl Borgward to pledge the company itself to the state in return for the guarantee. After a tense 13-hour meeting widely reported in a still hostile media, Borgward agreed to the [[Senate of Bremen|senate's]] terms on 4 February 1961, thereby averting the bankruptcy of the business.<ref name=Borgwardbankruptcy03>{{Cite web|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote=Ende 1960 beantragt Borgward einen weiteren Millionenkredit, um über den Winter zu kommen – in der kalten Jahreszeit werden weniger Autos verkauft. [...] Borgward willigt am 4. Februar 1961 nach 13 Stunden dramatischer Verhandlungen mit dem Senat ein, um die Insolvenz zu vermeiden."|access-date=2013-05-14 |newspaper=[[Die Zeit]] |first=Hellmuth |last=Vensky |date=27 July 2011}}</ref>

The Bremen Senate also insisted on appointing its own nominee as chairman of the company's supervisory board. The man they chose was [[:de: Johannes Semler (CSU)|Johannes Semler]] whom reports generally describe as a "[[Institut der Wirtschaftsprüfer in Deutschland|Wirtschaftsprüfer]]" (public auditor),<ref name=Borgwardbankruptcy04>{{Cite news|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote="Der Senat beruft den Münchener Wirtschaftsprüfer Johannes Semler zum Vorsitzenden des Aufsichtsrates."|access-date=2013-05-14 |newspaper=[[Die Zeit]] |first=Hellmuth |last=Vensky |date=27 July 2011}}</ref> though this designation, especially once translated into English, does less than full justice to the breadth of Semler's career. He had studied law at university and worked initially as a lawyer. The scion of a leading Hamburg political family, in 1945 he had himself been a founding member of the centre-right [[Christian Social Union in Bavaria|CSU]] party, and was a member of the [[Bundestag]] between 1950 and 1953. Despite his Hamburg origins, Semler was by this time based in [[Munich]], with a network of contacts in the Bavarian establishment that probably included fellow CSU politician and the future German chancellor, [[Ludwig Erhard]], who in 1948 had succeeded Semler in a top administrative position within the [[Bizone]]. The appointment of Johannes Semler as the representative of the Bremen senators to chair the Borgward supervisory board would, in retrospect, contribute to the controversy that followed the Borgward bankruptcy.<ref name=Borgwardbankruptcy05>{{Cite news|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote="...für die Verschwörungstheoretiker unter den Borgward-Fans gefundenes Fressen, denn Semler hat den gleichen Job auch bei BMW in Muenchen, damals ebenfalls ein Sanierungsfall."|access-date=2013-05-14 |newspaper=[[Die Zeit]] |first=Hellmuth |last=Vensky |date=27 July 2011}}</ref>

On 28 July 1961, Semler, as chairman of the supervisory board, joined the directors of the three companies Borgward, Goliath and Lloyd to instigate proceedings for the establishment of a "Vergleichsverfahren", which would have provided for a court sanctioned [[Administration (law)|scheme of arrangement]] enabling the business to continue to trade while at the same time protecting the interests of creditors.<ref>A similar process in the US would involve a [[Chapter 11, Title 11, United States Code|Chapter 11 bankruptcy]].</ref> Two months later, however, in September 1961, the Borgward and Goliath businesses were declared bankrupt, followed in November by the Lloyd business.  Subsequent "conspiracy theorists"{{Citation needed|date=October 2018}} have suggested that Semler, for reasons of his own, never had any intention of allowing the Borgward auto-businesses to survive.<ref name=Borgwardbankruptcy06>{{Cite news|url= http://www.zeit.de/auto/2011-07/borgward-pleite|title=Der Niedergang eines Wirtschaftswunder-Unternehmens |quote="Am 28. Juli 1961 beantragen der Aufsichtsratschef der Holding und die drei Geschäftsführer der Borgward-, Lloyd- und Goliath-GmbH die Eröffnung von Vergleichsverfahren. Diese gerichtlichen Verfahren haben im damaligen Insolvenzrecht den Sinn, einen Konkurs noch abzuwenden. Doch im September 1961 gehen Borgward und Goliath, im November Lloyd in Konkurs."|access-date=2013-05-14 |newspaper=[[Die Zeit]] |first=Hellmuth |last=Vensky |date=27 July 2011}}</ref>