Will Past Dealings Hinder Schaeffler’s Bailout Chances?

The German government is said to be in a difficult position….The Schaeffler Group, part-owner of Continental AG, has sought debt assistance, and the government seemed ready to help – until allegations of the company’s dealings in the Nazi era came to light.

At the end of February, the group issued the findings of independent research into its activities during the Third Reich, and this report shows Schaeffler to have widely used forced labourers in its Poland based armaments factories. The company released the findings in light of rumours circulating on the internet that its factories also utilised hair taken from inmates at Auschwitz, a charge Schaeffler vigorously denied.

The Schaeffler Group rejects all claims that the company used human hair from Auschwitz. “All evidence today contradicts these suspicions,” said the released report, quoted in an article published by the Telegraph. “’None of the systematic searches of German archives in connection with Schaeffler found even a hint of links to Auschwitz, let alone the delivery of hair.”

However the allegations aren’t going away – according to articles published in the Independent, the Telegraph, and by major international media outlets, Dr. Jacek Lachendro, deputy director of the Auschwitz memorial site, claims that 1.95 tons of human hair, “shaved from the heads of the victims before they were gassed”, was found in a textile factory belonging to Schaeffler after the war ended. Cloth said to be made from human hair was shown on Germany’s Spiegel TV programme. Lachendro says he also possesses camp records of former slave labourers who were responsible for despatching the hair in two railway carloads to the Schaeffler enterprise, which during the war years operated under the name Davistan AG. The hair was examined after the war, noted Lachendro, and was found to contain traces of Zyklon- B; the chemical the Nazis used at Auschwitz to kill an estimated 1.1 million people.

Understandably, the German government now faces a moral dilemma as to whether it should provide aid to the company’s owners, who are now being pressured to surrender control to the banks that supported the Schaeffler Group’s acquisition of Continental. The family hopes that state backing, most likely in the form of guarantees of debt refinance on cheaper terms, will strengthen their position with the banks. But one government insider, quoted in the Telegraph, commented “It is a difficult moral call to be seen helping a company that may have utilised the hair of tens of thousands of murdered people.”

Whatever the truth of the details of this case, the fact that the allegations have surfaced now is likely to be more than coincidence. This point was not lost on Time Magazine journalist William Boston: “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 rumours about the its activities during the Nazi period.”

Boston quoted Gregor Schöllgen, professor for contemporary history at the University of Erlangen-Nuremberg as saying that 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 factory.” Said Schöllgen: “The evidence is still missing that shows that Wilhelm Schaeffler was actually involved in these crimes.”