VW in Brazil: A dark history – DW – 06/15/2025

DW

15-06-2025

Brazil is one of VW's most critical foreign bases. The company's past in the country is blighted by decades of human rights abuses and exploitation.
US President Donald Trump is trying to turn back time by using import tariffs as a tool to force international companies to manufacture their products in the United States.
Many companies produce abroad, usually to profit from lower labor costs in their respective host countries, or to have a closer relationship with customers. This creates jobs in foreign markets, which also boosts local sales.
One such company is Volkswagen (VW). Two years ago, the German automaker celebrated its 70th anniversary as a "Brazilian" carmaker. The company began work in Brazil when it opened a warehouse in Sao Paulo on March 23, 1953. The Anchieta factory, VW's first production facility outside Germany, opened shortly thereafter.
"Volkswagen do Brasil has completed 70 years of technological innovation and pioneering spirit," said VW Brazil boss Ciro Possobom at the 2023 celebration. "VW has modernized its Brazilian factories, developed new technologies and is a brand that is much closer to the people today."
A year later, VW announced that it would expand its presence in Brazil by enlarging its four locations in the South American country. At the time, automobile analysts reported that VW planned to spend 7 million Brazilian reals (€1.1 billion, or $1.26 billion) in Brazil by 2026. Now that plan has been revised to 16 billion reals by 2028.
VW: Making money with cars and cows in Brazil
VW's investment in Brazil has largely paid off from the start. It not only invested in cars there, the company has also sought to make money on cows, specifically, beef. To facilitate the latter, Volkswagen created a new agricultural business known as Fazenda Volkswagen, or the Volkswagen Farm, located in Cristalino, around 2,200 kilometers (1,367 miles) from VW do Brasil headquarters in Sao Paulo.
Christopher Kopper, a historian at Germany's Bielefeld University who has studied the history of VW do Brasil, says it was there, of all places, away from the bustle of the big city, that VW's image began to tarnish.
"VW was approached about its treatment of workers at Fazenda Volkswagen back in the 1980s," Kopper told DW.
In 2016, Volkswagen tasked Kopper with compiling a report on VW do Brasil's activities during Brazil's military dictatorship, which began when a military junta staged a coup in 1964 and went on to maintain an iron grip on the country for the next 21 years.
VW is accused of having exploited and abused the employees of subcontrators working at its failed cattle farm, Fazenda Volkswagen Image: Wolfgang Weihs/picture alliance
Only VW workers were taken care of on the Fazenda
VW contracted Swiss agricultural economist Friedrich-Georg Brugger to set up the farm in 1974. Brugger counted on VW employees and other contracted workers to carry out his ambitious agrarian experiment. It was only years later, in a report broadcast by German public television, that it became clear just how ruthless Brugger was in pursing his plans.
Kopper said VW workers were always taken care of. "They had their own houses, their own schools, a medical clinic. But that did not apply to workers employed by subcontractors. They worked under conditions akin to indentured servitude."
The historian explained that the company always maintained that distinction. He said managers always "talked their way out of trouble by emphasizing that they were not responsible for the treatment of laborers employed by subcontractors." At the same time, they never tired of "pointing out that full-time workers directly employed at the Fazenda by VW lived very well by local standards."
Volkswagen accused of using slave labor
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Dark secret: VW and Brazil's military dictatorship
Work at the farm was conducted far away from prying eyes, and the project's ultimate failure did not make headlines either.
"The Fazenda had no chance of making a profit from the outset," said Kopper. "The project was a wash."
But what was even more shocking to Kopper than conditions at the Fazenda was what he learned about the company's attitude toward cooperation with Brazil's ruling military junta.
"VW worked closely with the dictatorship's security apparatus," he said. "That applied to VW's main factory in Sao Paulo and other facilities."
Kopper eventually realized that the conditions at the Fazenda were merely a detailed fragment from a much larger and far darker picture. Security at VW do Brasil factories, for instance, also worked closely with the junta. VW employees tolerated arrests and abuses by military police, even assisting them at times.
"Correspondence with the board of directors in Wolfsburg [where VW is headquartered in Germany] documents full acceptance of the military dictatorship up until 1979," says Kopper of his findings.
VW security personnel willingly helped Brazil's military dictators arrest and harrass employees Image: Andre Penner/AP Photo/picture alliance
Shadows from the Nazi era
Such behavior would be a scandal at any company, but it's even worse with Volkwagen when one considers the global automaker's start during the days of Adolf Hitler's dictatorship. Founded in Nazi Germany by Nazi organizations, Volkswagen systematically profited off of slave labor, exploiting and abusing thousands of forced laborers.
Had those in positions of responsibility in Wolfsburg learned nothing? Of course, there were immediately suspicions that the company planned to continue its misdeeds from a decade earlier, just under another dictator on another continent.
The scandal of what VW did in Brazil is made that much darker considering its roots in Nazi Germany Image: dpa/picture alliance
VW managers with skeletons in their closets
Kopper said it is really difficult to brush aside such accusations. "I would partially agree with that regarding management at VW do Brasil."
He said the reasons for that have to do with the fact that many of VW's managers in the 1950s and 60s "had been army officers and Nazi party members" when they were younger.
Kopper said that was not the case for Wolfgang Sauer, who ran VW's Brazilian subsidiary from 1971 to 1984, adding, "He was too young." According to the historian, Sauer was not bound to Germany's Nazi military tradition but rather to "Brazil's tradition of authoritarian paternalism: You can give workers social benefits, but that doesn't mean you have to accept independent works councils."
The societal and juridical reappraisal of VW's actions during Brazil's military dictatorship is far from over. Numerous legal battles over damages and admissions of guilt await the global automaker. Only when that process has been completed can Wolfsburg close this chapter of its corporate history.
This article was originally published in German and was translated by Jon Shelton.