Berthold Beitz, who has died at the age of 99, was one of Germany’s most influential industrialists for nearly three decades after the second world war.

July 31, 2013 8:19 pm

Influential industrialist personified Germany’s postwar recovery

By Chris Bryant and Peter Norman

Berthold Beitz, who has died at the age of 99, was one of Germany’s most influential industrialists for nearly three decades after the second world war. He was prominent again late in life, when in 1997 and 1998 he helped initiate and guide negotiations on the merger of the Essen-based Krupp industrial group with its larger rival, Thyssen, to form Germany’s largest heavy engineering concern. Beitz was instrumental in rebuilding the Krupp industrial group from the ruins of war. He was later to survive serious financial difficulties at Krupp that were partly of his own making. He also played a key role in reopening trade and political links between the young west German republic and its deeply suspicious communist neighbours to the east.

In his last years, Beitz saw ThyssenKrupp’s fortunes suffer after failed steel investments in the Americastriggered big losses, and a spate of corruption and compliance cases tarnished the company’s reputation.

As head of the Krupp Foundation, which holds a 25.3 cent blocking minority stake in ThyssenKrupp, Beitz continued to attend ThyssenKrupp supervisory board and shareholder meetings.

He took a close and supportive interest in chief executive Heinrich Hiesinger’s efforts to overhaul the company’s culture and reduce a large debt pile.

However, in this role, he was also considered a barrier to ThyssenKrupp’s future ability to raise new capital, as he was likely to oppose any move to dilute the influence of the foundation, which lacked the financial resources to participate in a fundraising.

When, in May this year, ThyssenKrupp said it could no longer rule out having to raise new capital, it perhaps indicated that Beitz had finally relented.

A charismatic man, blessed with Hollywood-style good looks that gave him a more than passing resemblance to the film star Cary Grant, Beitz had come to personify Germany’s recovery as an industrial power in the heady Wirtschaftswunder years of the 1950s and 1960s.

He was no narrow-minded manager, though. A keen yachtsman, hunter and art collector, he became a leading figure in postwar German society, serving for a time as vice-president of the International Olympic Committee.

Beitz was born into relatively humble circumstances on September 26, 1913, in Zemmin – in what was then the German province of Pomerania. His father served as a sergeant in the second Pomeranian lancers before becoming a clerk in the Reichsbank, the German central bank.

After leaving grammar school, Beitz completed a banking apprenticeship before joining the German subsidiary of the Shell oil group in Hamburg as a junior executive in 1938.

During the second world war, Shell transferred Beitz to Boryslav in Poland to become commercial manager of oilfields that had come under German control. It was there that Beitz, with his wife Else, showed unusual courage and saved many Jews and Poles from deportation to the Nazi concentration camps.

The rescues – which Beitz carried out at considerable risk to himself and his family – were later honoured by the Polish and Israeli governments.

Because of his wartime experiences, Beitz also felt a moral obligation towards Poland and eastern Europe. In 1961 he acted as an unofficial emissary between the governments in Bonn and Warsaw. In the 1970s, he helped promote the eastern-looking Ostpolitik policy of Chancellor Willy Brandt.

In the immediate aftermath of war, Beitz obtained a relatively undemanding job as deputy chairman of the British Zonal Insurance Control Authority in Hamburg. But he showed his entrepreneurial skills after becoming general manager of the Iduna-Germania insurance company in 1949. Within four years, Iduna had jumped from being the 16th to the third ranking German insurance group.

It was in 1952, while at Iduna, that Beitz met Alfried Krupp von Bohlen und Halbach, the owner of Krupp.

They made an unlikely pair. Beitz was a rising star, outward going, with a virtuous war record. Krupp was a chain-smoking introvert, who was deeply embittered after serving six years of a 12-year sentence for war crimes resulting from Krupp’s use of slave labour to support the Nazi war machine.

But in 1953 Beitz joined Krupp as general manager and was to win a virtual free hand running the group.

He was very well paid and, at first, spectacularly successful. The company, which in 1951 employed just 13,000 people, expanded its engineering activities and attacked new markets, especially in eastern Europe. By 1961, its workforce had jumped to 113,000. In line with Alfried Krupp’s wishes, Beitz was able to fend off postwar allied demands that Krupp divest its coal and steel interests.

However, hindsight suggests Beitz’s early successes contained the seeds of future problems. By the late 1960s, Krupp was overstretched. In 1967, it ran into liquidity problems and required federal and state guarantees to survive. In that year, too, Alfried Krupp died and ownership was transferred to a foundation.

Krupp’s liquidity problems were a humiliating reverse for Beitz. A tough professional manager, Günter Vogelsang, was put in charge of the group to return it to health.

But Beitz’s appointment as Alfried Krupp’s executor and chairman of the trustees of the Krupp foundation provided the platform for a comeback. By 1970, Beitz was again pulling the strings of power, this time as chairman of Krupp’s supervisory board.

Indeed, Alfried Krupp was to influence Beitz long after his death in 1967. As executor of Krupp’s will, Beitz saw it as his duty to maintain the company’s costly involvement in steelmaking.

The early 1970s were years of tension between Beitz and the managers installed to handle the day-to-day running of the Krupp group. By 1976, it looked as if the capital-starved company was heading for a new financial crisis.

But, in October 1976, Beitz pulled off a spectacular coup, selling 25.01 per cent of Krupp to Iran for DM1.3bn. Beitz later recalled that he negotiated the deal with the Shah of Iran at his summer palace by the Caspian Sea. The final payment was made shortly before the Islamic revolution in Iran.

Beitz was lucky in his choice of foreign partner. In spite of the revolution, Iran did not seek to influence Krupp’s business policy. Iran also put up with poor results for years as Krupp – weighed down by its heavy involvement in steel making – struggled with structural problems throughout the 1980s.

However, Beitz did not escape criticism in this period and, in July 1989, he stepped down as supervisory board chairman of Krupp. He continued to influence the group, though, as executor of Alfried Krupp’s will and as chairman of the trustees of the Krupp foundation.

It was in these two roles that Beitz played a key part in bringing about the ThyssenKrupp merger. Beitz always saw himself as the guardian of the Krupp family heritage, but was shrewd enough to realise that the group could not survive in the globalised competitive environment of the late 1990s as an independent entity.

Thus, in March 1997, he backed a bold move by his protégé Gerhard Cromme, the chief executive of Krupp, to launch an aggressive debt-financed hostile takeover bid for Thyssen.

Although the ensuing public outcry persuaded Beitz to call off the move shortly afterwards, it paved the way for negotiations between the two groups on the merger of their steel interests. These were followed in summer 1997 by contacts between Beitz and Vogelsang, by then the honorary chairman of Thyssen, which initiated the negotiations on the full merger.