Borgward was liquidated in 1961, yet creditors were paid in full with money left over
Carl Borgward insisted until his death in 1963 that his car company had been solvent when creditors forced it into liquidation. In a sense he was right: after every creditor was paid in full, 4.5 million marks remained. The Bremen carmaker, famous for the Isabella, had died of a cash-flow crisis rather than true insolvency.
Borgward's first design, in 1924, was the Blitzkarren or lightning cart, a tiny three-wheeled delivery van with 2 horsepower, bought by small traders and ordered in quantity by the German post office. In 1929 he merged his Goliath firm with the struggling Hansa-Lloyd, a company whose roots went back to 1905. After the war, in 1946, he split his business into three companies, Borgward, Goliath and Lloyd, partly to win larger steel allocations under rationing. The Isabella, launched in 1954, became the most popular model, while Lloyd's small cars gave working-class drivers affordable transport.
Engineering ambition ran ahead of management. The 1500 RS racing car's chassis was never refined enough, and the effort stopped in 1958, but its fuel-injected, 16-valve twin-cam engine was advanced for its time and later powered Stirling Moss to Formula Two wins in Cooper chassis. Borgward, however, was a hands-on boss who struggled to delegate and kept multiplying models. A December 1960 Der Spiegel cover story attacked his near manic design frenzy, noting that Germany's widest range of cars brought in only 650 million marks, fifth among the country's carmakers.
The trigger was an American slump. Of 12,000 cars delivered to North American dealers in 1960, Der Spiegel speculated that 6,000 might be sent back. Borgward had long preferred to delay paying suppliers rather than borrow, and by autumn 1960 he was sitting on more than 100 million marks in unpaid invoices for steel sheet and tyres alone. When he asked for one more million in credit, the Bremen government demanded that he hand the company to the state. He agreed in February 1961 after a 13-hour meeting, but by September the firms were declared bankrupt.
The Bremen factory passed to Henschel and eventually to Mercedes-Benz, which built vans and estate cars there. The name was revived in the 21st century for Chinese-built cars, but that venture went bankrupt in 2022.
Source: Borgward
