He Made Airplanes, Then Turned It Into A Billion Dollar Car Brand!

Building airplane engines for the German army, this carmaker was developing the engineering expertise that would one day make their cars famous. But once they fell on the wrong side of the Nazis, the company almost never had the chance. It would take a daring design to bring this carmaker back from the brink and turn it into one of the most elite brands in history. This is the story of BMW. Chapter 1. Carl Rapp BMW, as it's known today, starts with Carl Friedrich Rapp, a young mechanical engineer coming out of Ahingen, a southwestern part of Germany. Although not destined for greatness, Rapp would put gears into motion that culminated in a titanic force of engineering. In his early career, he worked as a technical designer for Daimler Motor & Gesellschaft, half of what would later become Mercedes-Benz. But he had much bigger aspirations. After gaining experience at Daimler, he left the major motorworks company to lead a company called Flugwerk Deutschland. This was Rapp's first introduction into the aircraft industry, where he oversaw an operation manufacturing engines and machinery. But the finances of Flugwerk Deutschland were failing, and the company was dissolved. Instead of abandoning the ship, Rapp was able to raise 200,000 Reichsmark of capital and establish his own enterprise in 1913, which he named Rapp Motor & Werke. On the same property as his former employee, growth was rapid. Within just two years, the company was employing 370 workers. Rapp's business coincided with the beginning of World War I. As an aircraft engine producer, it was perfectly positioned to thrive, providing armament for German forces. Unfortunately, Rapp's engines had destabilizing problems that made them unreliable. Instead, it was his competitor, Gustav Otto, whose business took off during the war. Rapp Motor & Werke was almost forced out of business when, with the war still raging, the Prussian army grew desperate and ordered 600 engines from Rapp, saving the company. But there were conditions to the sale. Franz Josef Popp was sent to the company as a representative for the Austrian navy. Like Rapp, he was a former Daimler worker, but he had a much more impressive resume. Having worked as the head of a department at AEG, a prominent engineering firm from Vienna, and collaborating with the biggest mechanical powers in the country. During this time in the navy, he convinced his superiors that Rapp Motor & Werke was perfectly suited for wartime production. What Rapp didn't know was that Popp was really coming to take his company. Chapter 2. A New Direction Franz Popp went to Rapp Motor & Werke to ensure quality control. The army had made a big order, and all standards needed to be met, especially because the company didn't have a strong reputation. Without high expectations, Popp was still shocked by what he found. The lack of management was causing chaos and threatening production. Popp wasted no time in taking over the role himself, earning the trust of the managing board and hiring a team of engineers that would power the company to success. At this point, Karl Rapp was ousted from his position and moved to a Californian engineering firm. Popp could see the potential of the facilities. After taking over, the company was renamed to Bayerische Motor & Werke, or BMW for short. In English, the name translates to Owing to its origins, the checkered white and blue logo draws on the flag of Bavaria, which was slightly changed to comply with trademark regulations, but still bears the same basic design. But it was still going to take a huge effort and investment. Fortunately, the flailing business attracted the interest of Camillo Castiglione, a prominent businessman who saw the same potential. Armed with the three letters that would become iconic, BMW was ready for production. The first machine off the production line was the BMW 3A, a straight-six aircraft engine that stretched out the blueprint for the company's future designs. There was a much bigger market waiting to be tapped, automobiles, and fate would push them increasingly toward it. After World War I, demand for aircraft engines effectively stopped. As a result of losing the war, German manufacturers were crippled by the Treaty of Versailles, which forbade German companies from constructing weaponry, including engines. Chapter 3. Towards Automobiles With huge manufacturing power and no customers, Franz Popp is left without a clear plan. Ingeniously, he used the company's resources to pivot to produce railway brakes, motorcycle engines, and farm equipment. BMW's facilities, had by now, converged with the headquarters of Camillo Castiglione's previous company, located in Lerchenauer Strauss, Munich. Three different manufacturing companies merged their operations in 1922 to strengthen the operation. But this would be Castiglione's final act, as he was charged with fraud and fled to Italy to avoid prosecution. Popp was now the sole leader at BMW. One of his first projects was to release their first independent vehicle, the R32 motorcycle. And this wasn't just any motorcycle, it set the world speed record. BMW was fast becoming known throughout Europe for its engineering prowess, and by 1928, after taking over the automobile company, Barsufabrik Eisenach, BMW shifted its attention to the vehicles that would help them skyrocket to global success. With a 747cc side valve engine, three-speed manual transmission, and a top speed of 75 km per hour, the BMW 315 DA2 signaled that a big new player had arrived on the scene. Those in the car industry knew that with BMW's engineering capabilities, it had the potential to dominate the automobile world. But it wasn't until the late 1930s, models like the BMW 327, that the ingredients for success came together. The 327 demonstrated that the company could make a powerful and competitive touring car, showing off a grille on the front of the car that would become one of BMW's hallmarks. Popp consolidated BMW, buying up a number of smaller manufacturing companies, including an American company, which allowed them to circumvent the Treaty of Versailles and restart aircraft engine production. But Franz Popp resisted investing too heavily in production. During the 1930s, on the eve of a German-initiated world war, he was worried that it would erode the autonomy of BMW and eventually lead them to financial ruin. And he was right. The Nazi regime removed Popp from the head of the company when he didn't follow their directives. By the end of the 1930s, BMW was left as a bare-bones structure, heavily financed by government contracts and the war efforts, with a need to break into the commercial market to stay afloat. After World War II, the factory in Eisenacht was taken over by Soviet forces, who used the BMW logo to produce their own cars. They failed to achieve the quality of the originals, but it signaled how valuable the name had already become. In 1951, two decades after the company had been caught in the war, with the copycat finally out of the way and the war finished, BMW emerged with a bang, a large luxury car flaunting the company's cutting-edge technology. The BMW 501 had clean curves, a spacious interior, and 100 horsepower, generated from a light, efficient V8 engine. It was exactly what the automaker needed to kick-start their operations again. Chapter 4. On the Ropes BMW's biggest competition came from a Nazi-funded company, Volkswagen, which was created to manufacture affordable automobiles for the people. After World War II in the 1950s, VW had become a symbol of post-war Germany, with cars that were stylish, reliable, and most of all, affordable. The luxury car market was no longer as profitable and BMW needed to change directions fast. As the 50s came to a close, the company was on the brink of bankruptcy, coming close to becoming acquired by Daimler-Benz, who were interested in neutralizing their competition. Motorcycle sales were going strong, but the 1956 BMW 507, which would later go on to be iconic, proved too expensive for the market. BMW was hoping to revive its sporting image with the 507, and while they were able to tout some famous buyers like Elvis Presley, high production costs left them with a loss of 15 million Dutch marks. To make matters worse, in 1954, BMW released the Isetta, which completely flopped. Resembling the size of a modern-day smart car, consumers simply found it too small. What followed, the BMW 600, with a bold front-door design, was also a failure. With a string of failures, Daimler was circling like vultures, ready to take over. Then, in 1959, with a fresh injection of capital from a wealthy German family, the Quants, BMW was given one last roll of the dice, and they used it to release the 700 series. The company couldn't afford another loss. Engineers recycled many of the components used on the 600 to save money, but with an entirely redesigned body, which would be released in both a coupe and a saloon model. A compact two-door car weighing in at just over 1,400 pounds, the first of the 700 series was a welcome new addition to the commercial market. It provided much more space than many of its small car competitors, and also proved to be a competing and succeeding in several motorsport events, and single-handedly rescued BMW from bankruptcy. However, seeing out the 1950s, BMW was still operating at a loss. A few years later, the BMW 1500 series, also known as New Class, guaranteed the future stability of the company. It was even more affordable than the 700 series, offering a four-door compact sedan model that appealed to families. On its release in 1962, BMW broke even, turning over 294 million marks. The following year was even better. Sales had jumped up almost 50 percent, to 433 million marks. By 1972, faith in the company was restored, and a giant new headquarters was completed, designed to resemble a four-cylinder engine. Carving into the Munich skyline, it signaled a grand new project was coming, with a new target. Chapter 5. Back to Sporting Roots Having established itself as both a luxury and functional automobile maker, BMW had matched the competition of Volkswagen. Their success allowed them to continue to produce successful models throughout the 1970s, like the 5-series mid-sized sedan and the 3-series compact sedan, the 6-series luxury coupes, and the 7-series large luxury sedans. Now, BMW turned to another German rival, Porsche. Committed to becoming competitive in motorsports, BMW knew that racing success would go hand-in-hand with greater brand recognition. That's when the M1 was born. Developed to distinguish itself from its competitors, the mid-engine design allowed for greater balance and traction of the rear tires. BMW briefly partnered with Lamborghini to construct the car's chassis but finished the project alone, resulting in one of BMW's most unique designs. Described as a supercar full of soul, luxury, and speed, the M1 model was later voted one of the greatest in the brand's history. With a 3.5-liter, 3,453cc six-cylinder engine, 273 horsepower, and a top speed of 165 miles per hour, this was by far the most powerful car BMW had ever produced. And it marked the launch of the widely successful M division, dedicated to manufacturing high-performance cars. Between 1978 and 1981, 397 M1 models were hand-built, and it left its mark on motorsports history. BMW created its own championship, enabling it to increase the production of its cars. Named the Procar BMW M1 Championship, it ran for two years and was won by future Formula One legends Niki Lauda and Nelson Piquet. From the brink of collapse less than three decades earlier, BMW had now stitched its name into the fabric of motorsports, becoming a leader in sports car innovation and achieving a symbol of status and power. But nearing the 21st century, the question was, how does a classic carmaker maintain its edge? Chapter 6. Staying Ahead Coming into the 90s, BMW released the E30 M3. This has become BMW's most recognizable design, spurring generations of models that continue until today. Many car enthusiasts consider this model to be the peak of BMW's engineering, introducing a radical new front diffuser, rear spoiler, and other body parts changes to make it one of the most sporty and aerodynamic models of the 3 Series. By 2005, BMW was 1.3 million cars per year. BMW remains a favorite for car collectors, continuing to produce parts dating back to the 1940s. But its adaptability has kept the brand on top, helping to double its revenue between 2011 and 2021 to over 111 billion euros a year. BMW became one of the earliest car manufacturers to adopt hybrid technology. In 2010, with the launch of the i-Series, the company pushed Ferrari and McLaren to develop hybrid supercars. BMW now sells more than 2.1 million cars a year, and they continue to push the envelope, currently at the forefront of hydrogen fuel cell testing. But their main focus has been in between these two extremes, balancing cutting-edge automobile engineering with their trademark style. The BMW M2 released in 2015 epitomized this balance, mixing the classic feel of the 20th century BMWs with modern technology. The M2 is one of the company's most popular releases and the definition of a sports car. Beginning as an engineering company manufacturing aircraft engines, BMW emerged from a complicated early history to rise up to the juggernaut of Volkswagen, carving out its own identity in the luxury and sports car markets. In 2023, it had the highest brand ranking in the United States, bridging the gap between prestigious high-end automobiles and accessibility.