Expansion
After the removal of Schacht in November 1937, the Reichswerke rapidly grew while privately held steel mills of the Ruhr were deprived of capital (their capacity remained at 16 million tons p.a. until the outbreak of the Second World War).[22] In February 1938 Göring pumped up the Reichswerke capital from, starting a chain of mergers. In April the Reichswerke moved into weapons production by absorbing Rheinmetall.[3][23] In a few following months the Reichswerke consolidated most of Austrian heavy industries, from extraction of ore to production of advanced weapons.[24]
Göring turned his eyes to Austrian steel in 1937.[25] The Anschluss of March 1938 gave him practically unlimited access to Austrian resources. The Reichswerke's activities in Austria demonstrated that Göring regarded captured assets as state property and was not willing to share the fortunes with private German businesses – on the contrary, the Reichswerke absorbed Austrian assets that were already owned by German investors and eliminated the barons of Ruhr from Austrian industry.[26] Its primary target in Austria, Alpine Montangesellschaft[27] steel company, was 56% owned by German giant VS. Immediately after the Anschluss, Göring advised VS to speed up mining its Austrian ores, and again the private business refused for fear of overproduction.[28] The Reichswerke purchased a non-controlling share in Alpine and then wrestled complete control over the company for six months.[25][28] Regulatory pressure threatened to devalue Alpine, and in March 1939[29] VS stepped aside.[28] Alpine's ore resources were vital for Göring's second great project – the new vertically integrated cluster of steel mills in Linz which also included Eisenwerke Oberdonau and numerous construction and shipping companies.[30] Göring, in his functions of President of Prussia and Chief of the Luftwaffe, also established close ties between the Reichswerke and the oil and aircraft industries.[31]
Relationships between the state and steel barons continued to deteriorate, and Göring used the same pattern of intimidation to extort other Austrian and later Czech assets from their past owners.[29][32] The Reichswerke absorbed 50 to 60 per cent of Czech heavy industry, and a slightly lesser share in Austria.[4] Takeover mechanisms ranged from bona fide stock purchase to control by proxy through dependent local banks to outright confiscation, as was the case of the British-owned Rothschild family mill in Vitkovice.[33] Sudetenland, annexed in 1938, brought the first substantial coal reserves.[6] In Germany, the Reichswerke effectively subdued the Ruhr barons by forcing them to supply coal to Salzgitter blast furnaces, commissioned in 1939, at below-market price.[34] "Acquisition" of Polish coal mines allowed the Reichswerke to drop coal prices even lower.[35]
After the outbreak of the war, the Reichswerke abandoned peacetime formalities and simply took over all "German" assets it found attractive. It declared itself "a trustee for the German state" for the duration of the war, a white knight saving occupied countries from "colonialism" of big business.[15] Settlements and compensations, when recognized, were delayed until the end of the war.[15] But the Reichswerke's own post-war plans, developed in 1942, called for a further increase of state control over heavy industries and industrialization of the eastern territories at the expense of the Ruhr.[36] The Reichswerke clearly favored industrial development in Central Europe, rather than Germany itself, in part because it was out of reach of Allied bombers.[37] By 1943–1944 half of the Reichswerke iron and steel were produced in the occupied territories, the other half in Germany (including annexed Austria).[38] The Soviet coal and steel industry captured in 1941–1942 became the Reichswerke's most challenging task. Hitler tasked the Reichswerke with harvesting the abandoned plants as soon as possible. Pleiger compelled the old steel barons of the Ruhr to send in their managing teams and literally "adopt" the Soviet assets.
Romanian assets, almost all of the country's coal and steel capacity, were acquired through a series of friendly arrangements and placed under joint German-Romanian control.[41] Particular care was given to the largest Romanian shipyard at Galați. In 1942, the Romanian shipyard signed an agreement for "assistance in technical matters" with the Reichswerke. The shipyard's capital increased eleven-fold, from 50 to 550 million lei.[42] That same year, the Romanian Navy submarines Marsuinul and Rechinul, laid down in 1938, were finally completed.[43] Another notable achievement of that year was the launching of Romania's first locally-built tanker, SRT-128.[44] In 1943, four modified M-class minesweepers were built in Romania from German materials.[45] This German-Romanian collaboration also benefited the Kriegsmarine, as the Romanian shipyard assembled six coastal U-boats between 1942 and 1943.[46]
