From the S&S archives
Krupp's new empire
Postwar plants are booming and former armament maker says he wants no part in planned army
By JAMES QUIGLEY | STARS AND STRIPES Published: October 19, 1955
AS WEST GERMANY prepares to produce a new army, a big-money question has been: What part will Krupp play in its rearming.
The answer is an emphatic "none at all" — and to remove any hint of mental reservation or qualification, this retort was followed by "under any circumstances."
Reply to the speculative question was given by Berthold Beitz, dynamic general manager for the Krupp empire and the man who holds the power of attorney for Alfried Krupp von Bohlen und Halbach, sole owner for the 43-enterprise industrial complex known to the Germans as Firma Friedrich Krupp.
Reasons for this definitive and underscored attitude are two-fold. One can be classified as a practical, business-like point of view, the other as more or less psychological, stemming out of the personality of the present-day head of the industrial dynasty.
From the practical viewpoint, the Krupp firm is going full blast, with full employment, and with an overseas expansion program. which will keep the firm busy for many years to come, according to Beitz.
In backstopping this viewpoint with illustrations, Beitz gets across the point that this is an all-sufficient basis for the Krupp attitude about rearmament, but his tone indicates the psychological reason actually is the more important one.
It is the desire of the Krupp family head to retreat from any "nationalistic" stand and so remove the tarnish which for more than a century has splashed the Krupp name as being the "cannon makers of Germany."
Because of association with this tarnish, Alfried Krupp, now 48, spent six years in prison. He was arrested in 1945 and sentenced in 1948 after trial at Nurnberg to 12 years in prison for employing slave labor and despoiling occupied countries. His holdings also were ordered confiscated. He was released in 1951.
Krupp was pardoned by then U.S. High Commissioner John J. McCloy who felt the arms maker had been singled out for unjustified harsh treatment — out of line with light penalties imposed on. other guilty firms. Upon release Krupp signed an agreement to limit himself to producing peaceful products and never again to engage in producing steel or mining coal.
"It is Mr. Krupp's firm intention never again to make arms — or weapons of any description," said Beitz.
Inherent in this reply is the fact that Krupp is doing very well — "thank you" — in peaceful pursuits and so why fool around with guns. In the first place Krupp does not have the wherewithal to produce guns, and if they were given permission to convert — who would foot the bill?
But even with Allied permission to go back into the steel and coal business, the Krupps are just not interested in making the weapons of war — and this includes production of military airplanes, Bietz said.
Krupp believes the future of West Germany and the firm must be aligned with the West, Beitz said, adding that "we all must row together" — in drawing an analogy between the Western partners and the rowers in a sculling boat.
"But it is somewhat inconsistent to tie up the arm of one of the rowers," he added.
Beitz referred to the fact that, in his opinion, discrimination still was being shown against Alfried Krupp in that he was denied entry into the U.S. — an indication that Krupp still was outside the fold.
Beitz said that Krupp would like to visit the States, and that in fact his German-born, American wife was visiting in the Los Angeles area where she owns property on the very day in which the conversation was being held.
Krupp plans not to ask for an entry permit as such action might only tend to embarrass U.S. Government officials and might create newspaper controversy, Beitz said. Krupp will let time iron out the situation, he added.
BEITZ SAID THIS was one matter which he thought somewhat incompatible with the "generous American spirit" — of which he claimed personal knowledge. For, he said, American food had kept alive his small daughters in postwar Hamburg.
Beitz, a 42-year-old dynamo, is perhaps the most un-Teutonic type to be found in German industry today. Even in America he would be a success story. In Germany he's a miracle. He's a man with little background in the Germanic traditional sense, having only a high school education and none of the academic degrees usually associated with German business directors.
A handsome man, Beitz laughs easily and looks happy which is just not done, old man, in these circles. Dressed in a charcoal-gray suit with a modern white-on-blue tie he looks more like a Madison Ave. advertising type than a German steel magnate. In fact his confreres call him "the American."
In observing that most of his generation are listed as war casualties, Beitz admits he was "lucky." He spent only a year in combat. Although not a member of the Nazi party, Beitz's administrative ability was such that he managed during the war some German-occupied oilfields in Poland and after the war did such a successful job as head of an insurance firm that he came to Krupp's attention.
For some time Krupp investigated Beitz, and one night on a Hamburg street corner, told the then 39-year-old Beitz that he wanted him to run the Krupp firm and for him to write his own ticket. Beitz, who has distant relatives in Iowa, and who has visited the States, holds the power of attorney for Krupp.
With the loss of his steel and coal interests, Krupp decided to diversify his interests and set up Krupp Technik, concentrating on industrial planning and construction abroad. Beitz calls it "Krupp's own Point IV program."
"In some of our undertakings, we actually are bringing a higher standard of living to some of the undeveloped areas of the world," said Beitz.
He meant this, of course, in a corollary sense, without minimizing the fact that the firm was in business to make profit. In one venture the firm's engineers, along with those of another German organization, are supervising construction of a steel mill in India which will turn out 1,000,000 tons of steel a year, and the building of a model city nearby which will house 100,000 steelworkers.
When India decided to build steel mills, Soviet Russia offered to do the job at little more than cost, but Premier Jawaharlal Nehru gave the nod to the German firms because of engineering ability and know-how.
In nearby Pakistan, Krupp is building another steel mill. Meanwhile Krupp experts are building harbor installations in Chile and Bangkok, others are constructing smelting plants in Greece, and still others are occupied on jobs in the Middle East, in Latin America and on the African continent. Four of Krupp's top men are in the States studying automation.
Beitz frankly ducks questions which are, as he says, "purely political." But he does say he favors the policy of Chancellor Konrad Adenauer in his desire to bring about closer ties with the West.
Beitz approved the chancellor's policy of "dealing from strength" with the Soviet Union and he said he thought the chancellor had shown strength at the recent Moscow conference when Adenauer swapped diplomatic relations for the return of 9,626 prisoners of war.
"We got back the prisoners, and we still have to see what will come out of the diplomatic exchange," he said.
Asked if he thought a trade agreement between the two nations would follow — assuming that the exchange of diplomatic representatives continues without hitch, Beitz would make no guess.
He indicated that the trade flow for West Germany must remain with the West and with the other continents rather than in the so called traditional "drive to the East" — which means the area now behind the Iron Curtain.
As a corollary to talk about manpower shortage, Beitz spoke about the possibilities of strikes. He said he looks for "practically none" for he believes that Economics Minister Ludwig Erhard would be successful in keeping prices down, thus preventing an inflationary spiral resulting from an unbalanced price-wage relationship.
The Krupp firm itself never has been bothered by labor troubles. This stems from the policy that the success of the firm depends, in large part, on the well-being and pride-in-work of its workmen. In the area around Essen the Krupps enjoy genuine popularity. Workmen take pride in being known as Kruppianers.
Although the family has ruled autocratically, Alfried Krupp, the present head's great-grandfather, introduced about 70 years ago a social welfare policy for the employees which — for those times — was almost anarchistic. The program did then, and still does, provide pensions, cooperatives, hospitals and schools.
Paternalistic as this seems, it also appears the Krupps have retained a sense of responsibility toward those who work for them. This is illustrated by one of Alfried's first actions upon his release from prison. In conformity with the MeCloy agreement and decartelization orders, he sold a coal mine and with the $5,000,000 received, made back payments on money due old pensioners.
IN ALL, upon release, Krupp received properties valued at about $90,000,000, about one-fourth of the old empire, the . remainder after air strikes and dismantling. Last year the firm grossed about $238,000,000 of which about 17 per cent came from export business. Part of the expenses were $2,500,000 paid out to the 16,000 pensioners in the Essen area.
The city of Essen, with its 650,000 inhabitants might be called the capital of the Ruhr district, which is itself Europe's workshop. Essen is surrounded by grass-covered hilly country, rent by rivers. The Ruhr is about the size of Delaware.
Essen-born Alfried, present head of the family, bears the name Krupp by directive of the last German Kaiser. He is descended from the founder, Friedrich, his great-great-grandfather, on his mother's side. The industrial dynasty actually was built by Friedrich's son. Alfred.
Alfred's son, Friedrich Alfred, died leaving only two daughters. One of these, Bertha, married Gustav von Bohlen and Halbach. The Kaiser at the time of the wedding directed that Gustav could add Krupp to his own name and that the eldest son in his succession could do likewise.
The firm reached its great peak under the iron-willed drive of Alfred Krupp, who about 1880, reputedly was the wealthiest man in Europe. His steel rails had helped build the Union Pacific railroad in the States and his cannon had helped pulverize the French in the Franco-Prussian war.
Under Gustav, the firm produced the guns which wrecked such havoc in World War I, and also became one of Hitler's principal armorers in World War II, employing 217,000 persons. Reportedly Gustav and Hitler disliked each other, but when Gustav was faced with the ultimatum of joining the party or having the firm taken over by the Nazis, he capitulated and contributed money and skill to them.
Alfried became titular head of the firm in 1943 when his father suffered a stroke. During the year that Alfried was arrested —1945 — his father suffered another stroke and never uttered another word during the five years he lingered on. He died in 1950.
This date marked the end of an era for the Krupps — the era of their steel casting which began with the founding of the firm in 1812. The saga of the industrial dynasty was built on this single factor. It resulted from Friedrich's ability to capitalize on the economic situation imposed on the European continent by a Napoleonic blockade.
Until that time the know-how of steel casting was the exclusive secret of a few British magnates. Friedrich, the firm's founder, worked out a process, and although he died almost bankrupt, he left the secret to Alfred who knew how to make the most of his opportunity.
Alfred, with a sense of dynasty, built the Villa Hugel, a massive-looking, 100-room mansion built of French limestone from which the industrial complex was controlled. The. house overlooking. magnificent gardens and the Ruhr River, cost about $1,500,000 before the family moved in during the year 1873. It is now a public museum, containing a fine art collection.
On the estate are several other houses, in one of which, a seven-room building, Alfried lives with his American wife. Krupp has a 17-year-old student son, Arndt, by a previous marriage.
In another house lives Alfried's mother, Mrs. Bertha Krupp. Here on Oct. 11, a dramatic scene took place — about an. hour after Beitz concluded his conversation about the lack of interest by the Krupps in making armaments.
On that day the family awaited the return of Alfried's brother, Harald, from 10 years of war captivity in the Soviet Union. About 10 minutes before Harald's arrival, Alfried drove up in a low-slung Porsche. He parked about 50 yards from his mother's house and walked up the lane to where three photographers were standing.
Krupp, a tall, rather ascetic-looking man with a lined face, gravely but pleasantly shook hands with the photographers, one of whom was Ted Rohde of The Stars and Stripes. Then Krupp entered the house. Shortly afterwards a green, chauffeur-driven Mercedes 300 drove up, bearing Harald and his sister, Mrs. Walthaud Thomas, of Bremen.
Harald, wearing a goatee and looking rather fit, was clad in a loose-fitting tweed suit. He appeared relaxed and happy as he climbed from the car prior to entering the house and greeting his mother whom he had not seen for more than a decade.
Sometime later, the four members of the family came from the house to pose for the photographers. Missing from the family circle was another brother and sister. Two of Alfried's brothers were killed during the war.
Through the trees could be seen the Villa. Hugel — the :house that steel and cannons built.