100 years ago
Bosch becomes a stock corporation (“AG”)
Around 1900, the average life expectancy in Germany was 46.5 years. With 1911 — and Robert Bosch’s 50th birthday — looming, the question arose as to who might continue his life’s work after his death.
After all, his company had undergone rapid development, employing 3,500 associates by around 1910 — and he took his responsibility for them very seriously. He would have liked his son Robert, born in 1891, to succeed him. But his natural heir fell terminally ill, and it became clear he would never be able to take over his father’s position. The company’s senior executives, including the head of sales Gustav Klein and the head of development Gottlob Honold, also attached great importance to the future of the company. Klein suggested setting up a general commercial partnership in which the company’s senior executives would hold a share.
The company’s legal advisor Paul Scheuing was also in favor of forming a corporation of some kind, in which Robert Bosch could give his executives a share, and which would not become the subject of a legal dispute over inheritance when he died. The 1913 strike at Bosch lent a certain poignancy to the whole affair, since Robert Bosch’s daughters gave the strikers vociferous support. In light of this, the senior executives could no longer imagine working together with any potential female heirs. However, the outbreak of the first world war prevented any quick solution.
In 1917, the issue came under consideration again. In the same year, the sole proprietorship owned by Robert Bosch was transformed into a stock corporation whose shares were not admitted to trading on the stock market. Instead, 49 percent of the capital stock was allocated to six senior executives, while the remaining 51 percent went to Robert Bosch. If Robert Bosch were to become incapacitated, the shareholders were to purchase shares amounting to two percent of the total capital stock, and in this way secure the majority of voting rights in the company. This ensured that the company would remain in trustworthy hands and that business policy would not be interrupted.
But events took a different turn. A number of shareholders died unexpectedly early. Although the shares were not traded on the stock exchange, Robert Bosch now found himself in a position where they were in the hands of the deceased board members’ heirs, who had no connection to the company.
That is why he gradually bought back all the shares over the course of the 1920s and 1930s. Finally, a change in German company law in 1937 led him to transform the company’s legal form into a close corporation that same year, which it has been ever since.
I am the head of Historical Communications at Robert Bosch GmbH, and I work on preserving and communicating our company’s long and multifaceted history. Before joining Bosch in 2007, I was employed for over ten years in various museums in an academic capacity. I also worked freelance in the same field. As a historian and specialist in cultural studies, I want to show that history is far from dusty and lifeless, but rather relevant and exciting.