FRANKFURT, Sept. 14 (JTA) – Following up on an earlier pledge, Volkswagen has established an $11.7 million fund to compensate Holocaust survivors who were forced to work as slave laborers during World War II. Payments could begin as early as the end of this year, company officials said. The amount of compensation given to applicants will be decided by a board of trustees the company said it will set up immediately. Volkswagen confirmed that former Israeli Prime Minister Shimon Peres and former Austrian Chancellor Franz Vranitzky have already agreed to serve on the board. Last Friday’s announcement came after Volkswagen pledged in July to set up a humanitarian fund “in recognition of its historical and moral obligations.” The company’s decision is notable because it is the first time a major German firm has agreed to such compensation payments. The decision – which came after two class-action lawsuits against Volkswagen and other German firms were filed in New York and New Jersey earlier this month – is expected to put pressure on other German firms to take similar action. Volkswagen employed an estimated 15,000 to 20,000 forced laborers to maintain production during the war. About 1,500 of these workers were Jewish. The company says it does not know how many of the former workers are still alive. Some 10 years ago, a study commissioned by the company detailed the role of slave laborers in maintaining production during the war years. Because of the firm’s location in a sparsely populated region in northern Germany, and because many of its employees were drafted to fight in the German army, it relied heavily on forced labor. In past years, Volkswagen has sponsored humanitarian projects in various European countries to help former slave laborers. Despite the availability of information about the significant role of slave labor in maintaining the company’s wartime profits, Volkswagen, like other German firms, refused to make compensation payments after the war. German firms have until very recently repeated what has been their standard argument: The German government is responsible for such payments because it is the legal successor to the Nazi regime. But growing international interest – sparked by the controversies in Switzerland about Nazi gold and the dormant bank accounts of Holocaust victims – has focused attention on other unresolved compensation issues. A spokesman for the Association of German Industries, Dieter Rath, denied that leading German companies are on the verge of establishing a joint foundation to settle the claims of former slave laborers. In recent weeks, firms like BMW and Siemens indicated interest in such a solution. But at a recent meeting of 15 firms, company representatives were unable to agree on a joint strategy. Instead, according to Rath, the companies continue to favor individual solutions. Meanwhile, Ed Fagan, a New York lawyer who represents former slave laborers in one of the class action lawsuits, told German television that Volkswagen’s decision to set up a private foundation for compensation claims will not stop the lawsuit. Munich lawyer Michael Witti, who also represents Holocaust victims in claims cases, has said that the amount of money Volkswagen is giving to the foundation is inadequate to properly fulfill all claims.
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