Messerschmitt-Bölkow-Blohm Gmbh.

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Messerschmitt-Bölkow-Blohm Gmbh.

Postfach 80 11 09
8000 Ottobrun bei Munchen 80
Munich
Federal Republic of Germany.
(089) 6000-0

Public/State owned Company
Incorporated: 1926 as Bayerische Flugzeugwerke
Employees: 36,915
Sales: DM 6.01 billion (US$ 3.03 billion)
Market value: DM 600 million (US$ 303 million)
Stock Index: Munich Frankfurt Bonn Hamburg

Messerschmitt-Bölkow-Blohm is widely recognized as the most important aerospace company in West Germany. It is the final product of many mergers and acquisitions in German industry. Many of the companies and divisions which were absorbed by MBB were originally founded as aircraft companies, electronics firms and shipbuilders. One of MBB’s component companies was Messerschmitt A.G., founded by Professor Willy Messerschmitt, whose engineering talents are often compared to such pioneers in aviation history as Anthony Fokker, Donald Douglas, and Kelly Johnson.

MBB has its origin in the Bayerische Flugzeugwerke. BFW, as the company was known, was founded in Augsburg, Germany as the successor to the Udet Flugzeugbau of Munich which ceased to exist in 1926. BFW commenced operations that year at the former works of the Bayerische Rumpler Werke in Augsburg. BFW manufactured a number of aircraft designs including two-seat light airplanes and larger transport aircraft. On the company’s roll of employees was a young designer and engineer named Willy Messerschmitt.

Dr. Messerschmitt, a native of Augsburg, flew an airplane when he was 15 and designed his own airplane when he was 18. After graduating from the Munich Technical University he established his own company in 1923 and later merged its operations with BFW. In 1927 he was made BFW’s chief designer, specializing in speed aviation. During the worldwide Depression, however, BFW encountered serious financial difficulties and failed. In order to stay in business Willy Messerschmitt re-established his own company, the Messerschmitt Flugzeugbau, and took over the unfinished projects of BFW. After a short period of time, the Messerschmitt Flugzeugbau was assured solvency and reverted to the name BFW. Messerschmitt was extremely influencial in the company, of course, and by the end of the decade it was again incorporated under his name as the Messerschmitt Aktiengesellschaft.

Until the middle 1930’s Willy Messerschmitt devoted most of his time to the development of civilian aircraft. Then, under the leadership of Adolf Hitler, Germany declared its intention to remilitarize and to reconstitute its air force or “Luftwaffe.” As a result, Messerschmitt turned his energies toward the development of warplanes and later producted one of the most successful fighter planes in the history of warfare, namely the Me-109.

The single-seat Me-109 went into mass production at Augsburg and other factories in the latter half of 1938. Thousands were delivered to the Luftwaffe, and special versions of the airplane set new speed records. The following spring the company introduced its Me-110 two-seat escort fighter, a version of which later became the Jaguar twin-engine bomber. Later Messerschmitt aircraft included the heavily armed Me-210 fighter/bomber.

Messerschmitt airplanes were given important roles in the German war strategy of Blitzkrieg, or “lightning war.” In 1939 Messerschmitt airplanes controlled the skies over Poland as German armies invaded that country. The following year the successful strategy was repeated in France. In the summer and fall of 1940 the Luftwaffe engaged the British Royal Air Force in one of the most bitterly fought and decisive aerial battles in history, the Battle of Britain. Despite their powerful capabilities and greater numbers, however, the Messerschmitts were unable to secure control of the skies for a German invasion of Britain.

In 1941 Messerschmitt secretly developed the Me-262, the world’s first jet fighter. Messerschmitt’s test pilot, Fritz Wendel, took the twin-engine jet for its first flight in July of 1942. But the German High Command, especially Hitler himself, wanted the jet to be manufactured as a bomber. The dispute caused mass production of the jet to be delayed until late in the war when Allied bombers had already destroyed most of Messerschmitt’s factories.

The Me-262 was capable of attaining speeds of 550 miles per hour and reaching attitudes of 40,000 feet, far beyond the capabilities of any Allied airplane. When it was made fully operational in October of 1944, the Me-262 was shooting down as many as 45 Allied planes a day. Willy Messerschmitt later remarked that the Normandy invasion could have been repelled if Germany had had an additional 200 jets. When Soviet armies marched into Berlin in 1945 they found workers still assembling Me-262s in tunnels beneath Tempelhof airport.

By the end of the war Messerschmitt had produced about two-thirds of Germany’s warplanes, including over 30,000 of the durable Me-109. Willy Messerschmitt was arrested by American forces in western Germany, detained briefly, and three years later was brought to trial in a German court, accused of being a “fellow traveller” of the Nazis. Claiming to have merely been a “reluctant beneficiary” of the German war machine, Messerschmitt was later acquitted of his involvement with the Nazi regime.

After the war the Allied occupation authorities imposed a ten year moratorium on the production of German aircraft. The Messerschmitt factories were rebuilt to manufacture sewing machines, pre-fabricated houses, and small bubble-topped automobiles called the Kabinenroller. Unfortunately, these civilian ventures proved that Willy Messerschmitt’s talents were restricted to the development and production of aircraft. By 1956 the company was nearly bankrupt and deeply in debt to the Bavarian and Federal governments. During this time Messerschmitt moved his permanent residence to Estapona near Malaga, Spain. While in Spain Messerschmitt and his team of engineers worked under contract to the Hispano Aviación company developing a line of HA-100 and HA-200 pilot trainers for the Spanish Air Force.

In 1957, after the moratorium expired, Messerschmitt returned to Germany where he developed a vertical takeoff aircraft for the German Defense Ministry. The company shared a contract with the Heinkel company to assemble and later build French Fouga Magister jets in addition to building Lockheed F-104 Starfighters and the Fiat G-91. The Starfighters were an especially problematic jet for the reconstituted Luftwaffe; 175 of them crashed and killed a total of 85 pilots.

The German aircraft companies Heinkel, Focke-Wulf and Dornier, as well as Messerschmitt, never fully recovered from either the devastation of the war or the ten year production moratorium. It became a policy of the Federal government to rationalize the German aircraft industry through a process of mergers and joint ventures. Messerschmitt agreed to merge with Bölkow GmbH, a manufacturer of sport and civilian aircraft, sailplanes, electronics and small space vehicles.

The Bölkow company was founded in 1948 by a Dr. Ludwig Bölkow, as a small civil engineering firm in Stuttgart. In 1958 the company moved to Ottobrunn, near Munich, and changed its name to Bölkow-Entwicklungen K.G. On January 1, 1965, after the Boeing Company acquired a minority interest, the name was changed again to Bölkow GmbH.

The Messerschmitt/Bölkow merger was delayed for several months while the companies calculated their correct value (a component of which was future product orders). The German government, however, interpreted the delay as deliberate stalling. It announced that it would be withholding all new orders and additional funding until the companies carried out their amalgamation. On June 6, 1968 the two companies merged to form Messerschmitt-Bölkow GmbH. Willy Messerschmitt was named director of the new company and Ludwig Bölkow was made chairman of the board of directors.

The following May Messerschmitt-Bolkow merged with another aircraft company named the Hamburger Flugzeugbau GmbH. HFB, as this company was known, was founded in 1933 by the Blohm & Voss shipbuilding company and remained substantially owned by the Blohm family until the time it was sold. HFB resumed operations after the war in 1956, producing Noratlas 2501 transport aircraft under license from the French company Nord-Aviation. HFB was also involved in the production of Lockheed Starfighters, the Transall C-160 military transport, and the Fokker F-28.

To reflect the addition of HFB, the company was named Messerschmitt-Bölkow-Blohm. The major shareholder of MBB was the Blohm family, with a 27.1% interest. Other shareholders included Dr. Messerschmitt (23.3%), Dr. Bölkow (14.6%), the Boeing Company (9.7%), Aerospatiale (9.7%), and the State of Bavaria (6.5%). In July, Siemens A.G. acquired a remaining 9.1%.

The amalgamated Messerschmitt-Bölkow-Blohm maintained its commitments to joint ventures and co-production agreements with other companies. MBB developed missile systems with Nord-Aviation and Aérospatiale, and was a member of the Panavia Eurofighter consortium with British Aerospace and Aeritalia. MBB provided 65% of the capital for Deutsche Airbus which, in turn, constituted 37.9% of the total capitalization of the Airbus Industrie commercial jetliner consortium. MBB was also involved in the production of the Transall C-130, Fokker F-27 and F-28. MBB also modified F-4 Phantom fighters and General Dynamics’ F-16s for the Luftwaffe. In addition, MBB continued to manufacture its successful BO.105-series of helicopters.

Through the 1970’s MBB maintained a high profile in the commercial airliner market, mostly through its association with Airbus. MBB manufactured large portions of the A-300 and A-310 fuselage, which were then flown via “Super Guppy” (a converted Boeing Stratocruiser) to Aérospatiale facilities in Toulouse, France for final assembly. MBB also devoted its resources to the development of subsequent Airbus jetliners, including the A-320.

Dr. Bölkow retired from MBB at the end of 1977 following an unsuccessful attempt to convince the board to waive his mandatory retirement at age 65. As Bölkow was leaving, the government was once again considering a further consolidation of the German aerospace industry. MBB was financially healthy and considered an ideal candidate to take over the troubled Vereinigte Flugtechnische Werke, or VFW. A merger between the two companies, however, did not occur because the government did not consider such a merger a necessary part of the nationalization program.

On September 15, 1978 Willy Messerschmitt died following an undisclosed major surgical operation. Ironically, his death came on the day the British mark as the anniversary of the Battle of Britain. In less than a year MBB had lost both of its prominent founders.

The German aerospace industry continued to experience difficulties caused by weak markets and overwhelming foreign competition. VFW, in particular, was in deep financial trouble. VFW was formed by the merger of Focke-Wulf and Weserflug in 1963, and Heinkel in 1964. In 1969 VFW merged with Fokker of the Netherlands and was called VFW-Fokker. Despite the continuing success of Fokker’s aircraft line, VFW-Fokker was unable to generate a profit. The company sold only 16 of its new VFW-614 jetliners. While Fokker facilities in Amsterdam were expanding, VFW’s in Bremen were laying off workers. Because the two companies had different long-term strategies and that they were moving in different directions, a decision was made for VFW and Fokker to dissolve their partnership.

The breakup was delayed for two years while Fokker prepared for its independence. During this time VFW regained a good measure of its financial health. The government, however, was still determined that VFW be merged with MBB. The subsequent merger was so well planned that, virtually within days of the VFW-Fokker breakup, the way was cleared for an MBB-VFW merger.

Both companies were owned by a diverse mix of industrial companies, private citizens, and state and federal governments. Settling their claims delayed MBB’s absorption of VFW for several months. When it was completed, MBB owned 19 plants between the North Sea and the Alps, making it the third largest aerospace company in Western Europe. VFW’s 35% stake in Deutsche Airbus was added to MBB’s 65%, making it a wholly-owned subsidiary of MBB. The company also continued to participate in a number of pan-European aerospace programs, including the Panavia Tornado fighter (42.4%), Airbus Industrie (37.9%), the French-German Eurocopter and Euromissle consortiums (both 50%), and the Eurosatellite direct television broadcasting system (24%). Starting in 1979, MBB manufactured a new helicopter called the BK.117 in conjunction with Kawasaki Heavy Industries of Japan. The policy of involvement in joint ventures was started by Ludwig Bölkow in the 1950’s and was later continued at MBB.

The company was reorganized in September 1983 after Willy Messerschmitt’s nephew, Gero Madelung, who had served as MBB’s chief executive, left the company. The former Military Aircraft and Helicopter divisions were merged into a new military aviation group. The Dynamics division was merged with the Special Products division, which includes marine systems and missiles. MBB’s other divisions, the Space group and the Transport Aircraft group, were unaffected.

In 1984 MBB attempted to improve its slow growth by acquiring Krauss-Maffei, manufacturer of the highly successful Leopard II battle tank. Although Krauss-Maffei had significant retained earnings, its parent company, the Freidrich Flick group, was experiencing financial difficulties which induced them to sell the tank builder. MBB acquired Krauss-Maffei through its 50%-owned subsidiary RTG.

During this time MBB itself became a takeover target. The strongest candidate bidding for MBB was the Munich-based automobile manufacturer BMW. BMW, however, wanted nothing less than a 51% share of MBB. MBB’s majority shareholders, the German states of Bavaria, Bremen, and Hamburg were opposed to the takeover and primarily responsible for rejecting BMW’s bid. MBB has since corrected its structural deficiencies and is no longer considered a takeover target.

The German states, which together own more than 50% of MBB, have often expressed their desire to further privatize the company. Yet by holding their majority interest they can exercise control over a number of factors, including employment and additional industrial development in their regions.

In civil aeronautics MBB has taken a 31% share in production of the Airbus consortium’s new A-320 jetliner (down from 35% for the A-300 and A-310). It also has a 27% share in Fokker’s new short/medium range airliner called the Fokker 100. Furthermore, MBB is a major partner in the Ariane unmanned rocket program. In military aviation, MBB is a partner in the Munich-based European Fighter Aircraft (EFA) consortium called Euro-fighter. The EFA program was created to produce 800 high-performance fighter jets for the air forces of Britain, West Germany, Italy and Spain.

Britain and West Germany considered developing a successor to the Panavia Tornado with France. When negotiations failed the British government backed the development of an entirely British fighter jet, the P. 110. The P. 110 was later developed into the Agile Combat Aircraft (ACA) by the reunited Panavia partners. Fearing that the ACA would endanger a separate five-nation European fighter project, the German and Italian governments withdrew their support. The British aerospace industries, however, continued to develop the ACA and later produced a new fighter designated the EAP (for Experimental Aircraft Programme). Ironically, Britain’s EAP became the prototype for the five (presently four) nation Eurofighter.

MBB regards its failure to support the development of the ACA into the EAP as a major mistake. It allowed the British to establish a strong lead in advanced avionic technologies. The Eurofighter partners, British Aerospace (33%), MBB (33%), Aeritalia (21%) and CASA (13%), now must decide how much of Britain’s EAP is relevant to the EFA.

The Eurofighter and Airbus groups are perhaps the best examples of MBB’s strong position in the European aerospace industry. The continued growth of the West German economy assists MBB by generating domestic demand as well as providing strong export markets. There is currently no need for further rationalization in the German aerospace industry, nor does it appear that there will be. The company’s managing director, Hanns Arnt Vogels, has said that MBB is again very close to making a broad structural change so that it can remain a strong European competitor.

Principal Subsidiaries

MBB-Grundstucksverwaltungs-gesellschaft (99.25%); Vereinigte Flugtechnische Werke GmbH; ERNO-Raumfahrttechnik GmbH; Bayern-Chemie Gesellschaft für flugchemische Antriebe GmbH; Rhein Flugzeugbau GmbH; Bölkow Anlagen GmbH; Deutsche Airbus GmbH; Flugzeug Union-Sud GmbH; MBB-Transtechnica Gesellschaft für Technologie Transfer GmbH; Junkers Flugzeug und Motorenwerke GbmH; MBB-Weitsschaftsdienst GmbH; GELMA Industrie-elektronik GmbH; MBB Helicopter Corporation (USA); MBB Helicopter Systems, Ltd. (England).