Reichswerke Hermann Goering Organization

Discussions on the economic history of the nations taking part in WW2, from the recovery after the depression until the economy at war.
Praetor98
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Reichswerke Hermann Goering Organization

Post by Praetor98 » 07 Jul 2023 20:52

What companies did the Hermann Goering works control, and what did they do?

GregSingh
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Re: Reichswerke Hermann Goering Organization

Post by GregSingh » 08 Jul 2023 07:51

From R.J. Overy, War and economy in the Third Reich. Oxford University Press, 1995

Reichswerke HG 1942.jpg
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Kriegswirtschaft
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Re: Reichswerke Hermann Goering Organization

Post by Kriegswirtschaft » 09 Nov 2023 17:55

Hi All,

Another clear example of how the III Reich squandered its possibilities in too many projects. Most of the resources were spread over way too many industrial facilities. Again the main policymaker, Hermann Göring was more interested in expanding his private empire, amassing political & economic power than in the economic rationale behind many of those projects. And his attraction for huge projects would be a liability when Germany had to be careful where to invest its scarce raw materials and economic resources.

One of those brainchild projects were the Salzgitter steelworks and the iron ore mined nearby. Initially it made sense from the perspective of a country likely to be blockaded again by the Royal Navy. However the German steel barons were very reluctant to invest in the project that was finally taken over by the state -at a huge cost- The main reason was to invest in facilities working with low-grade ores. Göring would outmaneouver them by setting up a state company managed by himself. But to start from scratch a huge industrial conglomerate was no easy by any mean. When Germany conquered Western Europe in 1940 the facilities were redundant and had barely produced some pig iron and almost no steel at all. However the RHG carried on investing in those facilities although most of the steel industries in the Ruhr were starved of capital.

In the summer of 1940 the German dilemma was not to build up new steelwork facilities but rather how to supply the existing ones with coal and labour. Both were scarce as many workers had been drafted, coal production was declining or stagnated and transport situation was pushed to the limit by the new needs: supplying Italy, France and Belgium with coal and raw materials to keep their industry going.

The conquered Soviet steelworks and other industries in the Ukraine are another example of projects not likely to pay off. Most of the facilities were devastated by the retreating Soviets. To bring them back into operation large repairs and investments were needed. Again the Ruhr steel barons were demanded to take them over. Obviously as resources were spread thin, the main areas of interest in France and Belgium out of their reach, their interest was indeed very limited. Most of them were convinced it would cost too much effort to put back some facitilites too far from Germany, without power, little coal and a terrible transport situation. They dragged their feet as much as they could until the Soviet offensive in 1943 reconquered the region without having produced much of value.

ewest89
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Re: Reichswerke Hermann Goering Organization

Post by ewest89 » 06 Dec 2023 22:27

I think some perspective is required here. When the National Socialists came to power, how many were industrialists or scientists or trained technical men? Of course, once in important positions they could exert their influence. Even Hitler planned a company called Adolf Hitler GmbH. My point is, the existing factory owners and producers of cars and trucks were entrenched already, and they wanted to make money. Germany created a total war economy. After the war started in 1939, forced labor from Poland and other conquered territories ended up in Germany to take over the jobs once held by the young men in uniform. Winning the war was a bit more important than personal ambition.

I would encourage posters to provide references that support their claims. For example:

"scarce raw materials"? What, exactly, was scarce? Broad, sweeping statements need examples to prove the point.

As far as "economic resources," what was lacking? Conquer a country, steal their raw materials and other resources, and keep going. Anything of use is shipped to German industry or existing companies are taken over to produce, for example, aircraft for the Germans, such as French aircraft that were produced there but handed over to the Germans for their use.

Kriegswirtschaft
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Re: Reichswerke Hermann Goering Organization

Post by Kriegswirtschaft » 01 Jan 2024 11:35

Hi ewest89,

These are quite broad questions that need very lenghty explanations. I will try to give a short one on some of your questions:
ewest89 wrote:
06 Dec 2023 22:27
My point is, the existing factory owners and producers of cars and trucks were entrenched already, and they wanted to make money. Germany created a total war economy. After the war started in 1939, forced labor from Poland and other conquered territories ended up in Germany to take over the jobs once held by the young men in uniform. Winning the war was a bit more important than personal ambition.
Indeed the industry owners and main shareholders wanted to make money. But it is important to understand that politics evolved during time. At the time Hitler took over power he forged an alliance with the main industries. In short he promised he would keep trade unions at bay, uproot comunism and would offer lucrative opportunities to the businessmen. The only thing he asked was full political support to his power and the drive towards rearming Germany.

However that started to change once he got into the drive to autarky. Some of those projects were gigantic and the industry owners -mainly the steel barons in the Ruhr- were not convinced this was their call. As Hitler & Göring did not get the support they wanted they simply bypassed them setting up a huge conglomerate with public capital. Although the steel barons did profit from the rearmament drive they were in a way set aside and lost their political importance. What is even more important they were starved of capital as public capital was flowing into the brainchild projects.
As war was going on and situation worsened the regime tightened the screws to the steel barons. In the meantime the dynamics set by the war (plunder, takeover of key industries, etc) meant that Göring and some regime personalities got the war booty instead of the traditional industry elites.
ewest89 wrote:
06 Dec 2023 22:27
I would encourage posters to provide references that support their claims. For example:
Aside of oil which was the critical raw material the III Reich did not possess there were other critical scarce commodities (some metals for steel alloys, rubber, animal fodder and food)

Coal which was along oil and steel the basic raw material for the economy. It was theoretically available in sufficient quantities in Hitler´s Europe. However some countries had a surplus (Germany, Poland or Czechoslovaquia) but the rest of European countries under German control had to import coal in particularly France, Italy and Belgium if they wanted to keep their economies in working order. And some of the neutral countries too so they could produce useful goods for the III Reich. So that meant that Germany had to deliver coal all over Europe at a time that all the sea routes were blockaded by the British navy. That would put a tremendous strain on the railways that had been starved of capital during the thirties. Additionally the war mobilization and disruption created by the war meant there was not enough labour at the coal mines to produce the coal needed. Well, several circumstances that combined produced a deficit in the coal production and distribution. As coal was the main raw material at the time (steel industry, railways, chemical & munitions industries, etc) this produced a knock on effect on those economies.

This is pretty well explained in the book by Adam Tooze "The Wages of Destruction".

Cheers

ewest89
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Re: Reichswerke Hermann Goering Organization

Post by ewest89 » 01 Jan 2024 21:42

Thank you for your detailed reply. Do not forget that synthetic oil from coal was produced, along with synthetic lubricants. Forced laborers and concentration camp prisoners were used for various construction projects by the military.

https://panzerworld.com/german-coal-statistics

https://www.statista.com/statistics/128 ... 5-country/

https://www.isb.ruhr-uni-bochum.de/fors ... ex.html.en

Kriegswirtschaft
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Re: Reichswerke Hermann Goering Organization

Post by Kriegswirtschaft » 02 Jan 2024 10:39

Here there are so many different comments I will need to address them in detail:

1) Forced labour: indeed there was use of forced labour in the mines & industry. The point is that labour had a much lower productivity than "normal" labour. Underfed, underclothed and mistreated people had a productivity of half of a normal worker. That is well documented in many research works. So you could not simply replace a mobilized German worker by one deported, you needed more than that. And there was a a massive wastage of labour, namely the assesination of million of Soviet POWs, Jews and the mistreatment of deported workers as a whole.

2) Sinthetic oil & rubber: for each ton of sinthetic gasoline you needed 4-6 tons of good quality coal. So in short to get the minimum sinthetic fuel to keep war going the III Reich needed every year around 20-25 mill. tons of coal. But that was the barest minimum because you left all civilian economies stranded without any fuel. And this had a knock on effect on all the economy. The absence of petrol left all agricultures struggling with lower returns without tractors or machinery. As an example the splendid French diary industry was in shambles as milk could not be collected and converted in cheese, butter, etc.

3) Commitment to allied & occupied countries: Germany had to deliver every year around 61 mill. of tons of coal to France, Italy, Scandinavia, etc putting an unbearable strain on the railways. Railways that were already overcommitted by multiple demands. The Eastern campaign got that even worse as suddenly the Germans had to send thousands of locomotives and railcars to overcome the logistical challenges there. So although in the German occupied Europe there was theoretically enough coal problem was mainly distribution, although as I mentioned in point 1) there was a production problem too. But because of the railways crisis this was something Germany was never able to overcome. And the outcome was that large industries like the French or Belgian stalled because of lack of coal, oil and other raw materials.

4) Ersatz economy: although it sounds very nice the harsh reality is that an ersatz economy turning out steel from low grade ores, sinthetic oil out of coal & massive steel factories, sinthetic rubber and fibers out of coal and other chemicals is uneconomical. You will always need more inputs and productivity will be lower than getting the raw materials by trade. The tradeoff effect is that you have to give in some production by setting up all the sinthetic industry.

Anyway these are the background features in the situation for the III Reich. Whilst the sinthetic fuel industry made sense as otherwise there was no alternative the investment in new steel mills was at least controversial. And the rebuilding of the steel industry in the Ukraine was simply nonsense given the scarcity of inputs & capital for the industrial base in Western Europe and the logistical constrains in the occupied Soviet Union.

ewest89
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Re: Reichswerke Hermann Goering Organization

Post by ewest89 » 02 Jan 2024 22:36

Where are your references? I personally knew two forced laborers who worked with others. The picture you paint contains bias. There were also volunteer forced laborers from France, for example, who were not on the enemies list. Forced laborers were not, as a whole, as you describe them. Also, I have seen period photos of captured British aircraft on train cars with French markings, so Germany captured extra train cars. You forget that a good portion of the German Army relied on horses. One person I knew worked on a large vegetable plantation, was not mistreated, but expected to meet, along with others, a certain production quota by harvest time. You also forget that foreign factories could be used to make military equipment for the Germans. Again, it appears that bias has replaced research.

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