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IG Farben
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I.G. Farbenindustrie AG was a German chemical industry conglomerate. Its name is taken from Interessen-Gemeinschaft Farbenindustrie AG (lit. Community of interest of the dye industry). The company was formed in 1925 from a number of major companies that had been working together closely since World War I. During its heyday IG Farben was the fourth-largest company in the world, after General Motors, US Steel and Standard Oil.
History
Predecessors of IG Farben
At the beginning of the 20th century the German chemical industry dominated the world market for synthetic dyes.
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Encyclopedia
I.G. Farbenindustrie AG was a German chemical industry conglomerate. Its name is taken from Interessen-Gemeinschaft Farbenindustrie AG (lit. Community of interest of the dye industry). The company was formed in 1925 from a number of major companies that had been working together closely since World War I. During its heyday IG Farben was the fourth-largest company in the world, after General Motors, US Steel and Standard Oil.
Founding members
IG Farben was founded on December 25, 1925 as a merger of the following six companies:
- BASF
- Bayer
- Hoechst (including Cassella and Chemische Fabrik Kalle)
- AGFA
- Chemische Fabrik Griesheim-Elektron
- Chemische Fabrik vorm. Weiler Ter Meer
History
Predecessors of IG Farben
At the beginning of the 20th century the German chemical industry dominated the world market for synthetic dyes. The three major firms BASF, Bayer and Hoechst produced several hundred different dyes and the five smaller firms AGFA, Cassella, Chemische Fabrik Kalle, Chemische Fabrik Griesheim-Elektron and Chemische Fabrik vorm. Weiler-ter Meer concentrated on high-quality speciality dyes. In 1913 these eight firms produced almost 90 percent of the world supply of dyestuffs and sold about 80 percent of their production abroad. The three major firms had also integrated upstream into the production of essentials raw materials and they began to expand into other areas of chemistry such as pharmaceuticals, photographic film, agricultural chemicals and electrochemicals. Contrary to other industries the founders and their families had little influence on the top-level decision-making of the leading German chemical firms, which was in the hands of professional salaried managers. Because of this unique situation the economic historian Alfred Chandler called the German dye companies "the world's first truly managerial industrial enterprises".
With the world market for synthetic dyes and other chemical products dominated by the German industry, German firms competed vigorously for market shares. Although cartels were attempted they lasted at most for a few years. Others argued for the formation of a profit pool or Interessen-Gemeinschaft (abbr. IG, lit. Community of interest). In contrast, the chairman of Bayer, Carl Duisberg, argued for a merger. During a trip to the United States in the spring of 1903 he had visited several of the large American trusts such as Standard Oil, U.S. Steel, International Paper and Alcoa. In 1904, after having returned to Germany he proposed a nationwide merger of the producers of dye and pharmaceuticals in a memorandum to Gustav von Brüning, the senior manager at Hoechst. Hoechst and several pharmaceutical firms refused to join. Instead, Hoechst and Cassella made an alliance based on mutual equity stakes in 1904. This prompted Duisberg and Heinrich von Brunck, chairman of BASF, to accelerate their negotiations. In October 1904 an Interessen-Gemeinschaft between Bayer, BASF and AGFA was formed, also known as the Dreibund or little IG. Profits of the three firms were pooled, with BASF and Bayer getting 43 percent and AGFA 14 percent of all profits. The two alliances were loosely connected with each other through an agreement between BASF and Hoechst to jointly exploit the patent on the Heumann-Pfleger indigo synthesis.
Within the Dreibund Bayer and BASF concentrated on dye whereas AGFA increasingly concentrated on photographic film. Although there was some cooperation between the technical staff in production and accounting, there was little cooperation between the firms in other areas. Neither were production or distribution facilities consolidated nor did the commercial staff cooperate. In 1908 Hoechst and Cassella acquired 88 percent of the shares of Chemische Fabrik Kalle. As Hoechst, Cassella and Kalle were connected by mutual equity shares and were located close to each other in the Frankfurt area. This allowed them to cooperate more successfully than the Dreibund, although they also did not rationalize or consolidate their production facilities.
Foundation of IG Farben
IG Farben was founded on December 25, 1925 as a merger of the following six companies: BASF (27.4 percent of equity capital), Bayer (27.4 percent), Hoechst including Cassella and Chemische Fabrik Kalle (27.4 percent),
Agfa (9.0 percent), Chemische Fabrik Griesheim-Elektron (6.9 percent) and Chemische Fabrik vorm. Weiler Ter Meer (1.9 percent). In 1926 IG Farben had a market capitalization of 1.4 billion Reichsmark and a workforce of 100,000 people, of which 2.6 percent where university educated, 18.2 percent were salaried professionals and 79.2 percent were workers.
Similar mergers took place in other countries. In the United Kingdom Brunner Mond, Nobel Industries, United Alkali Company and British Dyestuffs merged to Imperial Chemical Industries in September 1926. In France Établissements Poulenc Frères and Société Chimique des Usines du Rhône merged to Rhône-Poulenc in 1928.
The IG Farben Building, headquarters for the conglomerate in Frankfurt am Main, Germany, was completed in 1931.
In 1938 the company had 218,000 employees.
World War II
During the planning of the invasion of Czechoslovakia and Poland, IG Farben cooperated closely with Nazi officials and directed which chemical plants should be secured and delivered to IG Farben.
In 1941, an investigation exposed a "marriage" cartel between John D. Rockefeller's United States-based Standard Oil Co. and I.G. Farben. (see and) It also brought new evidence concerning complex price and marketing agreements between DuPont, a major investor in and producer of leaded gasoline, U.S. Industrial Alcohol Co. and their subsidiary, Cuba Distilling Co. The investigation was eventually dropped, like dozens of others in many different kinds of industries, due to the need to enlist industry support in the war effort. However, the top directors of many oil companies agreed to resign and oil industry stocks in molasses companies were sold off as part of a compromise worked out. (see but see)
IG Farben built a factory (named Buna Chemical Plant) for producing synthetic oil and rubber (from coal) in Auschwitz, which was the beginning of SS activity and camps in this location during the Holocaust. At its peak in 1944, this factory made use of 83,000 slave laborers. The pesticide Zyklon B, for which IG Farben held the patent, was manufactured by Degesch (Deutsche Gesellschaft für Schädlingsbekämpfung), which IG Farben owned 42.2 percent of (in shares) and which had IG Farben managers in its Managing Committee.
Of the 24 directors of IG Farben indicted in the so-called IG Farben Trial (1947-1948) before a U.S. military tribunal at the subsequent Nuremberg Trials, 13 were sentenced to prison terms between one and eight years. Some of those indicted in the trial were subsequently made leaders of the post-war companies that split off from IG Farben, including those who were sentenced at Nuremberg.
Break-up and liquidation
Due to the severity of the war crimes committed by IG Farben during World War II, the company was considered to be too corrupt to be allowed to continue to exist. The Soviet Union seized most of IG Farben's assets located in the Soviet occupation zone (see Morgenthau Plan), as part of their reparation payments. The Western Allies however, in 1951, split the company up into its original constituent companies. The four largest quickly bought the smaller ones, and today only Agfa, BASF, and Bayer remain, while Hoechst merged with the French Rhône-Poulenc Rorer to form Aventis which was later purchased by Sanofi-Synthélabo to form Sanofi-Aventis.
Even though the company was officially liquidated in 1952, it continued to be traded on the Frankfurt Stock Exchange as a trust company, holding a few real estate assets until it was finally wound up on November 10, 2003 by its liquidators. It had contributed 500,000 DM (£160,000 or €255,646) towards a foundation for former captive laborers under the Nazi regime. The remaining property, worth DM 21 million (£6.7 million or €10.7 million), went to a buyer. During this lengthy period, the holding company had been continually criticized for failing to pay any compensation to the former laborers, which was the stated reason for its continued existence after 1952. The company, in turn, blamed the ongoing legal disputes with the former captive laborers as being the reason it could not be legally dissolved and the remaining assets distributed as reparations. Nevertheless, it refused to join a national compensation fund that was set up in 2001 to pay people who had suffered. Each year, the company's annual meeting in Frankfurt was the site of demonstrations by hundreds of protesters.
Products
Synthetic dyes, Nitrile rubber, Polyurethane, Prontosil, Resochin, Zyklon B, among others.
IG Farben scientists made fundamental contributions to all areas of chemistry. Otto Bayer discovered the polyaddition for the synthesis of polyurethane in 1937. Several IG Farben scientists were awarded a Nobel Prize. Carl Bosch and Friedrich Bergius were awarded the Nobel Prize in Chemistry in 1931 "in recognition of their contributions to the invention and development of chemical high pressure methods". Gerhard Domagk was awarded the Nobel Prize in Physiology or Medicine in 1939 "for the discovery of the antibacterial effects of prontosil". Kurt Alder was awarded the Nobel Prize in Chemistry (together with Otto Diels) in 1950 "for his [their] discovery and development of the diene synthesis".
IG Farben in fiction
- Der Rat der Götter "The Council of the Gods" (DEFA 1951, director Kurt Maetzig) is an East German film about IG Farben's role in World War II and the subsequent trial. See:
See also
Bibliography
External links
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