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About Medford mail tribune. (Medford, Or.) 1909-1989 | View Entire Issue (Sept. 19, 1963)
10 P THURSDAY. SEPTEMBER 19. 1963 MEDFORD MAIL TRIBUNE. MEDFORD. OREGON oroetr Arms Empire icomis Hemmoved T By ZANDER HOLLANDER nd AKlnvK niUDtc United Presi International Two decades ago, military ivearjons and machines manu factured by dynastic industrial complexes of Germany and Ja-'- pan were raining death and de struction on Allied soldiers on the continent of Europe and the islands of the Pacific. But hardly had the last shots of World War II been fired be fore occupation forces began dismembering t h e ordnance making industries of the defeat ed nations. The intent was clear: to prevent the giants of industry like Krupp in Ger many and Mitsubishi in Japan from again forging the hard ware that makes modern war fare possible. The course of history, how ever, is often a strange and winding path. In 20 years, both West Germany and Japan again are mighty industrial nations and both are politically allied with former enemies the Unit ed States and the Free World in the global economic struggle between the Democratic West and the Communist East. Where it was sound politics and economics to sever the sin ews of the'Kfupp and Mitsu bishi empires m 1945, such a course is questionable in the light of today's world condi tions. Restrictions Off Today, most of the immediate post-war restrictions placed on Krupp and Mitsubishi have been lifted or held in suspension. The two old and formidable indus tries are reuniting their dis membered parts and expanding into new products and new mar kets throughout the trade-conscious world. Here is an up-to-the-minute look into the new faces of Krupp and Mitsubishi by Unit ed Press International corres pondents based in'Germany and japan: Krupp Story , . Hitler's thousand-year Reich was dying that morning in 1945 when Amerloan GIs jeeped up to a plush villa outside the Ger man industrial capital of Essen, brushed pasb a butler in knee britches and arrested Alfried Krupp Von Bohlen und Halbach, sole owner' of the vast Krupp industrial empire. The Krupp combine had forg ed the steel sinews of' three Croat German war machines but in the spring of 1945 it was an empire in ruins. On the nlaht of March 11. 1.000 Royal Air Force bombers pounded the ma jor Krupp factories into gar ishly twisted rubble. What was left was dismantled and shipped to Russia and Yugoslavia as war reparations. And Krupp and a score of di rectors were sent to prison for 12 years by an American War Crimes tribunal for using slave labor and other crimes. The Krupp empire seemed, destined never to rise again. Seven men an American, a Briton, a . Frenchman, three West Germans and a Swiss were empowered to dismember the magnificent industrial em pire for good. On Allied order, Krupp agreed to sell his coal and steel holdings jnost nota. bly the vast Rheinhausen steel works near Essen. Sale Postponed - The Allied order to divest K r u p p of Rheinhausen the heart and soul of his $1.26 bil lion a year industrial complex remains in effect. But as the years pass and the seven-member commission again and again postpones the deadline for the sale it becomes increasingly doubtful if it ever will be sold. The original deadline was Jan. 31. 1959. The most recent ex tension brings it to July 31, 1984. Alfried Kfiipp" Is now free from prison and Is full or part owner of at least 160 factory enterprises, 27 of them outside Germany. His firm, Fricdrich Krupp of Essen, and its subsid iarics produce at least 3,500 products among mem locomo tives, nylon fiber, construction machinery, hospital and dental equipment, tankers and river boats, diesel motors, myriad iron and steel products, heavy duty trucks, industrial magnets coal, cranes, bridges, copper plumbing, ovens, screws, weld ing torch electrodes and syn thetics. In addition Krupp owns an ocean freight company and a river shipping firm and has a controlling interest in two air craft manufacturing companies Weser Flugzeugbau of Brem en and flugzeugbau Word ol Hamburg. Krupp's holdings are divided into 21 divisions employing 110,- 000 persons, 45,000 of them at the parent plant in Lssen. in 1962, Krupp sales totalled 5.12 billion deutschmarks ($1.28 bil lion). No Outside Holdings There are no outside stock holdings. When Krupp wishes to expand in a new direction he goes to a bank and obtains a few million marks as a personal loan. Krupp is secretive about the firm's annual profit. Fortune Magazine rates the Krupp combine the eighth larg est in Europe, behind Unilever, Siemens, Philips, Royal Dutch Shell, Hawker Siddcley, AEG (West German General Elec tric) and Fiat. Krupp itself con tends it is twclltn largest in terms of gross turnover. Krupp's wheeling and dealing goes on apparently unrestrained by the Allied sell order hanging over his head. The Kruno enterprise was founded in 1811 by Essen Grocer Fricdrich Krupp when Napo leon's blockade kept Europe from buying British steel. The firm nearly went bank rupt before Krupp's son Alfred took over at the age of 14. He stumped Germany as his own traveling salesman and revived the tottering fortunes by invent ing a seamless railroad wheel and graduated to industrial gi ant by turning out cannon for the German armies in the Franco-Prussian war of 1870-1871. Enters Shipbuilding Alfred s son Fricdrich Alfred Krupp expanded into shipbuild ing, helped develop the diesel engine and built the Rhein hausen Steel Works whose ovens spewed out the steel for Kaiser Wilhclm's World War I armies. When Fricdrich died, his old est daughter Bertha, namesake of the "Big Bertha" cannon that shelled Paris in 1914, assumed control of the firm. Fricdrich had no sons. But Bertha mar ried a young nobleman-diplomat, Gustav Von Bohlen Und Halbach, who took charge of the empire. The Kaiser decreed he should insert Krupp in his name. Gustav ruled Krupp during World War 1 and supported right wing politicians during the Weimar Republic. He was not regarded as a Hitler supporter at first, but the Krupp factories became the arsenal of the Wchr macht, turning out "Big Gus tav" cannon, Tiger tanks and other land and naval arma ments. Alfried Von Bohlen Und Hal bach, eldest son of Gustav and Bertha, acquired the Krupp name and scepter in 1943 when his father suffered a stroke. It has been whispered that a gentlemen s agreement among world industrialists pre vents an empire-wrecking offer to buy out Krupp. While break ing up Krupp appealed to be good politics and passable eco nomics in immediate post-war Europe, some observers say, it is bad politics and even worse economics in the light of the Atlantic economic community in which Krupp is just one of many giants. Yet the allies are unwilling to lift the sale order entirely and some believe the threat of its enforcement helps confirm Krupp's post-war pledge never again to produce aims. Alfried Krupp, 55, a shy, aus tere, chain-smoker, rules the Krupp empire from on high. Its day-to-day management is cn trusted to Berthold Beitz, 49, Krupp general manager, whose authority is virtually total. Beitz, suave, handsome, gre garious and rather un-Gcrman-ic, rules Krupp with such drive and efficiency some colleagues call him "Dor Amcrikancr." Largely as a result of Beitz' negotiations, West Germany is opening a trade mission with embassy status in Warsaw, Po land, and talks are underway with Hungary and Romania. Will the sell order hanging over the Krupp empire ever be enforced? Perhaps Ludwig Erhard, West German economics minister and designated to succeed Konrad Adenauer as chancellor, gave the answer when he spoke at Krupp's 150th anniversary ob servance in 1961. The post-war order, Erhard said, "is an anachronism which must be eliminated. There no room today for a spirit of reprisal, revenge or humilia tion." FLAGS PRESENTED Flags of the Latin American republics and Spain were prosonted to Elbert Covell College, first Spanish speaking liberal arts college in North America, which opened this month at the University of the Pacilic, Slockton, Calif. G. Domago-Hoath, right, president of the Pan American Society, makes a symbolic presentation of the flags to Dr. Robert Burns, left, UOP president. The actual Haas were ton lareo to snrend out for the photo. (UP1) Mitsubishi Report for the past 10 years, one of the staples of the Japanese business press has been feature articles entitled Are the Za balsu Coming Back?" The Zai- batsu arc the big business com bines which dominated Japa ncse industry before World War II. The word literally means "money clique" or "the big money. As to whether they are com ing back, the answer is yes. It is doubtful if the big com bines ever will return to their commanding position of pre war days when they controlled 70 per cent of Japan s industry Both Japan and the world have changed too much for that. But big business swings plen ty of weight in Japan today and it is concentrating that weight in order to compete better in the richer and rougher world market. The latest manifestation is the recently announced merger plan for the three Mitsubishi companies which build ships and manufacture machine tools The three firms, which retained (he name of the industrial com plex broken up by allied occu pation authorities after the war, together do 30 per cent of the shipbuilding in Japan the world's leading shipbuilding na tion. They own 50 per cent of Japan's shipyard capacity. The Mitsubishi firms also make 30 per cent of the turbine boilers in Japan, 10 per cent of the automobiles and 10 per cent of the machine tools. The companies today are call ed Mitsubishi Heavy Industries, reorganized (that is, broken up by occupation authorities), Mit subishi Shipbuilding and Engi neering Co. and Mitsubishi Nip pon Heavy Industries. I're-War Name The name of the merged com pany will be Mitsubishi Heavy Industries precisely the name of the pre-war firm which made much of Japan's military hard ware. It will be the third largest company in Japan after Hi tachi Electric and Machine Products and Toshiba Electric. Mitsubishi's three constituent firms had 76.505 employees in 1962 and made $46 million in profits on .$750 million sales. If Mitsubishi Electric also joins the proposed combine, as expected, it will be the biggest single manufacturer in Japan. The merger plan is highly com plicated but is expected to be accomplished by the spring of 1965 at the latest. The three machinery compa nies and the electric firm are, in turn, only part of a larger group of two dozen companies, slill most bearing the name Mitsubishi and descendant of the pre-war Mitsubishi Zaibatsu. The three Mitsubishi compa nies which plan to merge arc headed by three salaried man agers who are relatively un known far less prominent than a number of big Japanese bankers, (or instance. Banks play a dominant role in indus try because the capital struc- m9mmmmmmr K"''iS '4. i mas ms&i FLOODED BY HURRICANE Port Acres, a suburb of Port following Hurricane Cindy. Some : families nl the area were Arthur, Texas, ihows the extent of flooding from heavy rains evacuated by mnbiliied units of the Texas National Guard. (LTD ture of Japanese companies con sists mainly of bank loans. Live Simply Japan's big executives do not go in for conspicuous living. No yachts, big parties or show place dwellings. The ideals of the Japanese family life are simplicity and austerity, quiet and privacy, although it can be said it takes a substantial in come to achieve much of the latter two. The Zaibatsu, like Mitsubishi, still overshadow individuals like Matsushita and Honda and ag gressive new companies like Sony Electronics and Canon Camera. Of the Zaibatsus, Mitsubishi still has the most cohesivencss, the most esprit de corps, the greatest "organization man" philosophy. The 24 companies make ma chine tools, ships, electric prod ucts, chemicals, steel, rayon, cement, glass and paper. They refine and sell petroleum prod ucts, mine coal, carry ocean freight, do warehousing, issue insurance policies, sell real es tate and do importing and ex porting. Last year, they had more than 242,000 employees and earned profits in excess of $172 mil lion sales of $4.8 billion. This would put the entire Mitsubishi combine, if it were completely reunited, at about fifth place in the money rank ings of American firms, al though far behind General Mo tors which had 600,000 em ployees, profits of $1.5 billion on sales of nearly $15 billion last year. II MEDFORD'S FINEST MEATS SINCE 1940 OCEAN FRESH CRABMEAT Extra Good . . . U lb. "CHOICE" MARINATED CHUCK STEAKS BAR-B-Q BROIl or POT ROAST BONELESS PORK LOIN ROAST PORK TENDERLOINS 98c lb. 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