Deutsche Babcock
Encyclopedia
Deutsche Babcock AG was a German
manufacturing company based in Oberhausen
in the Ruhr District, the center of the German economy. The company was established in 1898 as a German subsidiary of the British boiler
making company Babcock and Wilcox, Limited
. In the beginning of the 20th century and the interwar period
Deutsche Babcock expanded its business across the German Empire
and the countries of Eastern Europe
and, to a lesser extent, Scandinavia
n countries. Financial success and military conflicts between Germany and the United Kingdom led to de-facto independence of Deutsche Babcock from its British parent, although the British owned the controlling interest in Deutsche Babcock until 1975.
After the World War II
Deutsche Babcock controlled the West German market for industrial steam boilers and nuclear power equipment. It diversified into oil and gas firing equipment, nuclear fuel
reprocessing components, air conditioning
systems, refrigeration
equipment, specialty steels and wire, copper
pipe
s, cast-iron fitting
s, desulfurization systems, and water-treatment plants. In 1996 the company experienced a severe crisis and was reorganized into Babcock Borsig. In 2002 the second crisis forced disbandment of Babcock Borsig and sale of its industrial assets to independent buyers. At the time of the company's failure it had 13,000 employees in Germany
and 9000 in other countries. As of July 2010, Babcock Borsig still exists as a shell company.
, established in 1866, set up their first overseas operation in London
in 1881. In 1891 the American shareholders sold the majority of their interest in the UK operations to the public. The parent company retained control over their intellectual property
in the United States and Cuba. The new independent British company, Babcock and Wilcox Limited, assumed control over the Babcock and Wilcox patents and licenses in the rest of the world. It had already established itself in Western Europe, Australia and the Middle East.
The British Babcock and Wilcox Limited entered the German market in 1887 through licensing of its technology and brand to a local manufacturer, Schwartzkopff. By the middle of 1890s the British became dissatisfied with apparently low volume of business: their German licensee "had too much else to attend to". Direct operations in Germany were ruled out in fear of the strong anti-British sentiment
among the Germans. Instead, in 1898 Babcock and Wilcox Limited formed a German subsidiary company, Deutsche Babcock and Wilcox Dampfkessel Werke Aktion-Gesellschaft (Deutsche Babcock and Wilcox, DB&W). Robert Jurenka and Alois Seidle from Bohemia
signed an agreement with Babcock and Wilcox
to convert their Berlin sales office into a fully operational subsidiary. Babcock and Wilcox Limited granted DB&W an exclusive license to sell Babcock and Wilcox products in Germany and its colonies. The British parent retained majority ownership and representation in the board of directors of DB&W.
to make steam generators
. By 1927, the company had 1600 employees. The company has been continuously profitable and always paid dividends until (at least) 1939. Jurenka led Deutsch Babcock until his death in 1942. He was responsible for a company culture that was unusual for its time. The company offered health insurance
from the start, a five day workweek prior to 1914, 42½ hour workweeks by 1930, and pension
s for retirees starting in 1938.
After the end of World War I
Deutsche Babcock engaged in a conflict with its parent company. The war had already terminated the ties between British and German businesses. DB&W acquired substantial market shares in Scandinavia, the Netherlands and the Baltic countries, which had formerly been a "British territory". The German management, riding high on the wave of continuously strong financials, openly contested their British parent's rights to these market and asserted de-facto independence of DB&W. The parent company abstained from resuming active control, fearing that a conflict will destroy the market value of their investment. The conflict was resolved in the 1920 contract that largely upheld the German interests. DB&W received exclusive rights for Central and Eastern Europe, including the Baltic States; the British took over the Scandinavia. Poland was split between the British and German companies. The agreement set the vector for DB&W expansion: unlike many companies, Deutshce Babcock expanded its operations to the east, not to the west.
Throughout the interwar period
DB&W expanded their markets at the expense of the British parent. They made deals with clients in Scandinavia and Soviet Russia, and openly competed with the British in Poland. In 1932, when most of the original Babcock and Wilcox patents had expired and the economies were suffering from the Great Depression
, Jurenka demanded complete abolition of license fees and royalties. Establishment of the Nazi regime made DB&W bargaining position stronger, and in 1939 their British parent reluctantly recognized the right of DB&W management to enter contracts without consulting the British office. Numerous attempts by the British management to improve group-wide collaboration "made little impression on its German subsidiary."
, Robert Jantscha faced numerous challenges. The Oberhausen plant was bombed, Silesia became part of Poland, and the Soviet Union imposed Communism
throughout much of the area where Deutsche Babcock operated. The company succeeded, though, by changing its focus to agricultural machinery
and building a new plant in Friedrichsfeld, on a site purchased in 1921.
After World War II the British parent company assumed control over the board of DB&W. In 1954 the British confirmed the exclusive rights of DB&W for Central and Eastern Europe and the future United Germany. The European subsidiaries of Babcock and Wilcox temporarily united with a common goal of post-war recovery and transfer of technologies. However, in 1959 the fragile union was weakened by a conflict between European and American interests in nuclear powerplant construction. DB&W, which possessed unique technology of making oversized boilers, led the opposition to the transfer of European technology to the Americans.
By 1960, Deutsche Babcock had 11,000 employees and made 150 products. In 1961, Germany's first nuclear-powered
ship
, NS Otto Hahn
, used a reactor
made by Deutsche Babcock. The company also worked on a power plant for Nordwestdeutsche Kraftwerke in 1963, using an advanced gas-cooled reactor
developed by the British company. This development showed Deutsche Babcock to be a major player in making West Germany
a leading industrial nation. In 1971, Deutsche Babcock, the American Babcock & Wilcox, and Brown Boveri
teamed up to compete with the Kraftwerk Union formed by AEG
and Siemens
. The nuclear power industry appeared headed for major growth until the Three Mile Island incident in the United States.
As of 1972, Deutsche Babcock supplied 56 percent of West Germany's boiler market. After Jantscha died in 1967, Hans Ewaldsen took the company into an era of acquisitions. By 1980, there were almost 80 subsidiaries, about half in countries other than West Germany. In 1981 Deutsche Babcock ranked 38th largest West German company, with annual sales just below 5 billion marks and 31,187 employees.
In 1975 the British company
decided its profits from the German operation were too low and sold the government of Iran
its holdings amounting to a fourth of the stock and 33.92% of the voting rights for 150 million dollars. Acquisition of 25.01% share of Krupp
by Iran led to de-facto merger of Deutsche Babcock and EVT GmbH, a Krupp subsidiary and the main competitor to Deutsche Babcock. After the 1979 Iranian Revolution
the shareholding in Krupp and Deutsche Babcock remained the largest Iranian investments in Germany. During the Iran hostage crisis
they were temporarily seized by Morgan Guaranty as a lien
securing the repayment of Iranian debt. Later, Iran recovered control over its investment and held it until 1986, when it sold to a group of German banks.
, and difficulty competing with foreign firms in the boiler industry led to some down years for the company. Still, Deutsche Babcock built a number of plants in the Middle East
despite the Iran-Iraq War
. The decline in nuclear power and a return to coal
actually created a new area of business—pollution control. Deutsch Babcock also branched out into improvement in water quality and soil quality, and environmental engineering
went from a tenth of the company's business in 1983 to a fourth in 1988. Helmut Wiehn became president as the company began its comeback.
The fall of Communism led to new markets in Eastern Europe, and agreements with companies in Czechoslovakia
and the former Soviet Union resulted.
In 1995, Deutsche Babcock lost 8.7 million marks and expected to lose 400 million marks in 1996 when the company's banks agreed to provide 500 million marks (about US$327 million) for reorganisation.
In March 2002, Babcock Borsig sold its one-quarter share of the Howaldtswerke-Deutsche Werft shipyard
, which analysts said made the company's problems worse. In July, Babcock Borsig became the fourth German company to go under that year, symbolizing the weakness of the German economy and threatening Gerhard Schröder
's chances for re-election as chancellor
. Babcock-Borsig filed for protection from creditors
on July 4, hoping to withdraw if financing could be found. The government of North Rhine-Westphalia
offered 800 million euro
s (a third of that from the national government), but Deutsche Bank
, Commerzbank
and other creditor
s did not reach an agreement. The company's stock fell from 12 euros at the start of 2002 to just under one euro on July 9.
Babcock Borsig Service Group, which maintains and upgrades fossil fuel
power plants in Europe, Africa and parts of Asia, received an investment in Autumn 2003 from Deutsche Beteiligungs AG, which intended to find a partner. In April 2005, Bilfinger Berger
bought all shares of Babcock Borsig Service Group from Deutsche Beteiligungs.
The North American operations of Babcock Borsig AG now belong to Babcock Power Inc. of Danvers, Massachusetts
, United States.
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
manufacturing company based in Oberhausen
Oberhausen
Oberhausen is a city on the river Emscher in the Ruhr Area, Germany, located between Duisburg and Essen . The city hosts the International Short Film Festival Oberhausen and its Gasometer Oberhausen is an anchor point of the European Route of Industrial Heritage. It is also well known for the...
in the Ruhr District, the center of the German economy. The company was established in 1898 as a German subsidiary of the British boiler
Boiler
A boiler is a closed vessel in which water or other fluid is heated. The heated or vaporized fluid exits the boiler for use in various processes or heating applications.-Materials:...
making company Babcock and Wilcox, Limited
Babcock International Group
Babcock International Group plc is a British-based support services company specialising in managing complex assets and infrastructure in safety-critical and mission-critical environments. Although the company has civil contracts, its main business is with public bodies, particularly the UK...
. In the beginning of the 20th century and the interwar period
Interwar period
Interwar period can refer to any period between two wars. The Interbellum is understood to be the period between the end of the Great War or First World War and the beginning of the Second World War in Europe....
Deutsche Babcock expanded its business across the German Empire
German Empire
The German Empire refers to Germany during the "Second Reich" period from the unification of Germany and proclamation of Wilhelm I as German Emperor on 18 January 1871, to 1918, when it became a federal republic after defeat in World War I and the abdication of the Emperor, Wilhelm II.The German...
and the countries of Eastern Europe
Eastern Europe
Eastern Europe is the eastern part of Europe. The term has widely disparate geopolitical, geographical, cultural and socioeconomic readings, which makes it highly context-dependent and even volatile, and there are "almost as many definitions of Eastern Europe as there are scholars of the region"...
and, to a lesser extent, Scandinavia
Scandinavia
Scandinavia is a cultural, historical and ethno-linguistic region in northern Europe that includes the three kingdoms of Denmark, Norway and Sweden, characterized by their common ethno-cultural heritage and language. Modern Norway and Sweden proper are situated on the Scandinavian Peninsula,...
n countries. Financial success and military conflicts between Germany and the United Kingdom led to de-facto independence of Deutsche Babcock from its British parent, although the British owned the controlling interest in Deutsche Babcock until 1975.
After the World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
Deutsche Babcock controlled the West German market for industrial steam boilers and nuclear power equipment. It diversified into oil and gas firing equipment, nuclear fuel
Nuclear fuel
Nuclear fuel is a material that can be 'consumed' by fission or fusion to derive nuclear energy. Nuclear fuels are the most dense sources of energy available...
reprocessing components, air conditioning
Air conditioning
An air conditioner is a home appliance, system, or mechanism designed to dehumidify and extract heat from an area. The cooling is done using a simple refrigeration cycle...
systems, refrigeration
Refrigeration
Refrigeration is a process in which work is done to move heat from one location to another. This work is traditionally done by mechanical work, but can also be done by magnetism, laser or other means...
equipment, specialty steels and wire, copper
Copper
Copper is a chemical element with the symbol Cu and atomic number 29. It is a ductile metal with very high thermal and electrical conductivity. Pure copper is soft and malleable; an exposed surface has a reddish-orange tarnish...
pipe
Pipe
Pipe may refer to:* Pipe , a hollow cylinder following certain dimension rules* Smoking pipe* Pipe or butt, a cask measurement* Pipe , a type of metal casting defect...
s, cast-iron fitting
Fitting
Fitting can refer to:* A dress fitting.* Any machine, component, piping or tubing part that can attach or connect two or more larger parts. For examples, see coupling, compression fitting or piping and plumbing fittings....
s, desulfurization systems, and water-treatment plants. In 1996 the company experienced a severe crisis and was reorganized into Babcock Borsig. In 2002 the second crisis forced disbandment of Babcock Borsig and sale of its industrial assets to independent buyers. At the time of the company's failure it had 13,000 employees in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
and 9000 in other countries. As of July 2010, Babcock Borsig still exists as a shell company.
Formation
The American boilermaking company Babcock and WilcoxBabcock and Wilcox
The Babcock & Wilcox Company is a U.S.-based company that provides design, engineering, manufacturing, construction and facilities management services to nuclear, renewable, fossil power, industrial and government customers worldwide. B&W's boilers supply more than 300,000 megawatts of installed...
, established in 1866, set up their first overseas operation in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
in 1881. In 1891 the American shareholders sold the majority of their interest in the UK operations to the public. The parent company retained control over their intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
in the United States and Cuba. The new independent British company, Babcock and Wilcox Limited, assumed control over the Babcock and Wilcox patents and licenses in the rest of the world. It had already established itself in Western Europe, Australia and the Middle East.
The British Babcock and Wilcox Limited entered the German market in 1887 through licensing of its technology and brand to a local manufacturer, Schwartzkopff. By the middle of 1890s the British became dissatisfied with apparently low volume of business: their German licensee "had too much else to attend to". Direct operations in Germany were ruled out in fear of the strong anti-British sentiment
Anti-British sentiment
Anti-British sentiment is prejudice, fear or hatred against the British Government, the culture or the people of the United Kingdom, or its Overseas territories.-Argentina:...
among the Germans. Instead, in 1898 Babcock and Wilcox Limited formed a German subsidiary company, Deutsche Babcock and Wilcox Dampfkessel Werke Aktion-Gesellschaft (Deutsche Babcock and Wilcox, DB&W). Robert Jurenka and Alois Seidle from Bohemia
Bohemia
Bohemia is a historical region in central Europe, occupying the western two-thirds of the traditional Czech Lands. It is located in the contemporary Czech Republic with its capital in Prague...
signed an agreement with Babcock and Wilcox
Babcock and Wilcox
The Babcock & Wilcox Company is a U.S.-based company that provides design, engineering, manufacturing, construction and facilities management services to nuclear, renewable, fossil power, industrial and government customers worldwide. B&W's boilers supply more than 300,000 megawatts of installed...
to convert their Berlin sales office into a fully operational subsidiary. Babcock and Wilcox Limited granted DB&W an exclusive license to sell Babcock and Wilcox products in Germany and its colonies. The British parent retained majority ownership and representation in the board of directors of DB&W.
Expansion
Jurenka and Seidle bought a boilermaking factory in Oberhausen in the Ruhr District and started manufacturing with mere thirty employees. In 1909 Deutsche Babcock added a factory in GleiwitzGliwice
Gliwice is a city in Upper Silesia in southern Poland, near Katowice. Gliwice is the west district of the Upper Silesian Metropolitan Union – a metropolis with a population of 2 million...
to make steam generators
Boiler (steam generator)
A boiler or steam generator is a device used to create steam by applying heat energy to water. Although the definitions are somewhat flexible, it can be said that older steam generators were commonly termed boilers and worked at low to medium pressure but, at pressures above this, it is more...
. By 1927, the company had 1600 employees. The company has been continuously profitable and always paid dividends until (at least) 1939. Jurenka led Deutsch Babcock until his death in 1942. He was responsible for a company culture that was unusual for its time. The company offered health insurance
Health insurance
Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is...
from the start, a five day workweek prior to 1914, 42½ hour workweeks by 1930, and pension
Pension
In general, a pension is an arrangement to provide people with an income when they are no longer earning a regular income from employment. Pensions should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum.The terms retirement...
s for retirees starting in 1938.
After the end of World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...
Deutsche Babcock engaged in a conflict with its parent company. The war had already terminated the ties between British and German businesses. DB&W acquired substantial market shares in Scandinavia, the Netherlands and the Baltic countries, which had formerly been a "British territory". The German management, riding high on the wave of continuously strong financials, openly contested their British parent's rights to these market and asserted de-facto independence of DB&W. The parent company abstained from resuming active control, fearing that a conflict will destroy the market value of their investment. The conflict was resolved in the 1920 contract that largely upheld the German interests. DB&W received exclusive rights for Central and Eastern Europe, including the Baltic States; the British took over the Scandinavia. Poland was split between the British and German companies. The agreement set the vector for DB&W expansion: unlike many companies, Deutshce Babcock expanded its operations to the east, not to the west.
Throughout the interwar period
Interwar period
Interwar period can refer to any period between two wars. The Interbellum is understood to be the period between the end of the Great War or First World War and the beginning of the Second World War in Europe....
DB&W expanded their markets at the expense of the British parent. They made deals with clients in Scandinavia and Soviet Russia, and openly competed with the British in Poland. In 1932, when most of the original Babcock and Wilcox patents had expired and the economies were suffering from the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
, Jurenka demanded complete abolition of license fees and royalties. Establishment of the Nazi regime made DB&W bargaining position stronger, and in 1939 their British parent reluctantly recognized the right of DB&W management to enter contracts without consulting the British office. Numerous attempts by the British management to improve group-wide collaboration "made little impression on its German subsidiary."
Post-war recovery
After taking over the company during World War IIWorld War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, Robert Jantscha faced numerous challenges. The Oberhausen plant was bombed, Silesia became part of Poland, and the Soviet Union imposed Communism
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
throughout much of the area where Deutsche Babcock operated. The company succeeded, though, by changing its focus to agricultural machinery
Agricultural machinery
Agricultural machinery is machinery used in the operation of an agricultural area or farm.-Hand tools:The first person to turn from the hunting and gathering lifestyle to farming probably did so by using his bare hands, and perhaps some sticks or stones. Tools such as knives, scythes, and wooden...
and building a new plant in Friedrichsfeld, on a site purchased in 1921.
After World War II the British parent company assumed control over the board of DB&W. In 1954 the British confirmed the exclusive rights of DB&W for Central and Eastern Europe and the future United Germany. The European subsidiaries of Babcock and Wilcox temporarily united with a common goal of post-war recovery and transfer of technologies. However, in 1959 the fragile union was weakened by a conflict between European and American interests in nuclear powerplant construction. DB&W, which possessed unique technology of making oversized boilers, led the opposition to the transfer of European technology to the Americans.
By 1960, Deutsche Babcock had 11,000 employees and made 150 products. In 1961, Germany's first nuclear-powered
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...
ship
Ship
Since the end of the age of sail a ship has been any large buoyant marine vessel. Ships are generally distinguished from boats based on size and cargo or passenger capacity. Ships are used on lakes, seas, and rivers for a variety of activities, such as the transport of people or goods, fishing,...
, NS Otto Hahn
Otto Hahn (ship)
Otto Hahn was one of only four nuclear-powered cargo vessels so far built. Planning of a German-built trade and research vessel to test the feasibility of nuclear power in civil service began in 1960, and Otto Hahns keel was laid down in 1963 by Howaldtswerke Deutsche Werft AG of Kiel...
, used a reactor
Nuclear reactor
A nuclear reactor is a device to initiate and control a sustained nuclear chain reaction. Most commonly they are used for generating electricity and for the propulsion of ships. Usually heat from nuclear fission is passed to a working fluid , which runs through turbines that power either ship's...
made by Deutsche Babcock. The company also worked on a power plant for Nordwestdeutsche Kraftwerke in 1963, using an advanced gas-cooled reactor
Advanced gas-cooled reactor
An advanced gas-cooled reactor is a type of nuclear reactor. These are the second generation of British gas-cooled reactors, using graphite as the neutron moderator and carbon dioxide as coolant...
developed by the British company. This development showed Deutsche Babcock to be a major player in making West Germany
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....
a leading industrial nation. In 1971, Deutsche Babcock, the American Babcock & Wilcox, and Brown Boveri
Brown, Boveri & Cie
Brown, Boveri & Cie was a Swiss group of electrical engineering companies.It was founded in Baden, Switzerland, in 1891 by Charles Eugene Lancelot Brown and Walter Boveri who worked at the Maschinenfabrik Oerlikon. In 1970 BBC took over the Maschinenfabrik Oerlikon...
teamed up to compete with the Kraftwerk Union formed by AEG
AEG
Allgemeine Elektricitäts-Gesellschaft was a German producer of electrical equipment founded in 1883 by Emil Rathenau....
and Siemens
Siemens
Siemens may refer toSiemens, a German family name carried by generations of telecommunications industrialists, including:* Werner von Siemens , inventor, founder of Siemens AG...
. The nuclear power industry appeared headed for major growth until the Three Mile Island incident in the United States.
As of 1972, Deutsche Babcock supplied 56 percent of West Germany's boiler market. After Jantscha died in 1967, Hans Ewaldsen took the company into an era of acquisitions. By 1980, there were almost 80 subsidiaries, about half in countries other than West Germany. In 1981 Deutsche Babcock ranked 38th largest West German company, with annual sales just below 5 billion marks and 31,187 employees.
In 1975 the British company
Babcock International Group
Babcock International Group plc is a British-based support services company specialising in managing complex assets and infrastructure in safety-critical and mission-critical environments. Although the company has civil contracts, its main business is with public bodies, particularly the UK...
decided its profits from the German operation were too low and sold the government of Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
its holdings amounting to a fourth of the stock and 33.92% of the voting rights for 150 million dollars. Acquisition of 25.01% share of Krupp
Krupp
The Krupp family , a prominent 400-year-old German dynasty from Essen, have become famous for their steel production and for their manufacture of ammunition and armaments. The family business, known as Friedrich Krupp AG Hoesch-Krupp, was the largest company in Europe at the beginning of the 20th...
by Iran led to de-facto merger of Deutsche Babcock and EVT GmbH, a Krupp subsidiary and the main competitor to Deutsche Babcock. After the 1979 Iranian Revolution
Iranian Revolution
The Iranian Revolution refers to events involving the overthrow of Iran's monarchy under Shah Mohammad Reza Pahlavi and its replacement with an Islamic republic under Ayatollah Ruhollah Khomeini, the leader of the...
the shareholding in Krupp and Deutsche Babcock remained the largest Iranian investments in Germany. During the Iran hostage crisis
Iran hostage crisis
The Iran hostage crisis was a diplomatic crisis between Iran and the United States where 52 Americans were held hostage for 444 days from November 4, 1979 to January 20, 1981, after a group of Islamist students and militants took over the American Embassy in Tehran in support of the Iranian...
they were temporarily seized by Morgan Guaranty as a lien
Lien
In law, a lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation...
securing the repayment of Iranian debt. Later, Iran recovered control over its investment and held it until 1986, when it sold to a group of German banks.
Decline
A freeze on new nuclear plants in West Germany, a decline in new power plant construction overall, currency problems in KuwaitKuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
, and difficulty competing with foreign firms in the boiler industry led to some down years for the company. Still, Deutsche Babcock built a number of plants in the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
despite the Iran-Iraq War
Iran-Iraq War
The Iran–Iraq War was an armed conflict between the armed forces of Iraq and Iran, lasting from September 1980 to August 1988, making it the longest conventional war of the twentieth century...
. The decline in nuclear power and a return to coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
actually created a new area of business—pollution control. Deutsch Babcock also branched out into improvement in water quality and soil quality, and environmental engineering
Environmental engineering
Environmental engineering is the application of science and engineering principles to improve the natural environment , to provide healthy water, air, and land for human habitation and for other organisms, and to remediate polluted sites...
went from a tenth of the company's business in 1983 to a fourth in 1988. Helmut Wiehn became president as the company began its comeback.
The fall of Communism led to new markets in Eastern Europe, and agreements with companies in Czechoslovakia
Czechoslovakia
Czechoslovakia or Czecho-Slovakia was a sovereign state in Central Europe which existed from October 1918, when it declared its independence from the Austro-Hungarian Empire, until 1992...
and the former Soviet Union resulted.
In 1995, Deutsche Babcock lost 8.7 million marks and expected to lose 400 million marks in 1996 when the company's banks agreed to provide 500 million marks (about US$327 million) for reorganisation.
Babcock Borsig: the final years
In 1970 Deutsche Babcock bought the company Borsig AG. Years later the company's name changed to Babcock Borsig AG.In March 2002, Babcock Borsig sold its one-quarter share of the Howaldtswerke-Deutsche Werft shipyard
Shipyard
Shipyards and dockyards are places which repair and build ships. These can be yachts, military vessels, cruise liners or other cargo or passenger ships. Dockyards are sometimes more associated with maintenance and basing activities than shipyards, which are sometimes associated more with initial...
, which analysts said made the company's problems worse. In July, Babcock Borsig became the fourth German company to go under that year, symbolizing the weakness of the German economy and threatening Gerhard Schröder
Gerhard Schröder
Gerhard Fritz Kurt Schröder is a German politician, and was Chancellor of Germany from 1998 to 2005. A member of the Social Democratic Party of Germany , he led a coalition government of the SPD and the Greens. Before becoming a full-time politician, he was a lawyer, and before becoming Chancellor...
's chances for re-election as chancellor
Chancellor
Chancellor is the title of various official positions in the governments of many nations. The original chancellors were the Cancellarii of Roman courts of justice—ushers who sat at the cancelli or lattice work screens of a basilica or law court, which separated the judge and counsel from the...
. Babcock-Borsig filed for protection from creditors
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
on July 4, hoping to withdraw if financing could be found. The government of North Rhine-Westphalia
North Rhine-Westphalia
North Rhine-Westphalia is the most populous state of Germany, with four of the country's ten largest cities. The state was formed in 1946 as a merger of the northern Rhineland and Westphalia, both formerly part of Prussia. Its capital is Düsseldorf. The state is currently run by a coalition of the...
offered 800 million euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
s (a third of that from the national government), but Deutsche Bank
Deutsche Bank
Deutsche Bank AG is a global financial service company with its headquarters in Frankfurt, Germany. It employs more than 100,000 people in over 70 countries, and has a large presence in Europe, the Americas, Asia Pacific and the emerging markets...
, Commerzbank
Commerzbank
Commerzbank AG is the second-largest bank in Germany, after Deutsche Bank, headquartered in Frankfurt am Main.-Activities:Commerzbank is mainly active in commercial bank, retail banking and mortgaging. It suffered reversals in investment banking in early 2000s and scaled back its Securities unit...
and other creditor
Creditor
A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...
s did not reach an agreement. The company's stock fell from 12 euros at the start of 2002 to just under one euro on July 9.
Babcock Borsig Service Group, which maintains and upgrades fossil fuel
Fossil fuel
Fossil fuels are fuels formed by natural processes such as anaerobic decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years...
power plants in Europe, Africa and parts of Asia, received an investment in Autumn 2003 from Deutsche Beteiligungs AG, which intended to find a partner. In April 2005, Bilfinger Berger
Bilfinger Berger
Bilfinger Berger is a large, internationally active construction and services company based in Mannheim, Germany.-History:Bilfinger Berger dates back to 1880 when August Bernatz founded an engineering business which became known, from 1886 as Bernatz & Grün and, from 1892, as Grün & Bilfinger.In...
bought all shares of Babcock Borsig Service Group from Deutsche Beteiligungs.
The North American operations of Babcock Borsig AG now belong to Babcock Power Inc. of Danvers, Massachusetts
Danvers, Massachusetts
Danvers is a town in Essex County, Massachusetts, United States. Located on the Danvers River near the northeastern coast of Massachusetts, Danvers is most widely known for its association with the 1692 Salem witch trials, and for its famous asylum, the Danvers State Hospital.-17th century:The land...
, United States.