Von Blomberg convinces Hitler to rationalize armament production

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Idea taken from this thread:
http://forum.axishistory.com/viewtopic.php?f=66&t=149762
Re: German lack of mass production technique in 1930's

by Paul Lakowski on Wed Feb 25, 2009 6:13 am
Somua2 wrote:What was the opportunity cost to Germany for not adopting mass production methods in the early/middle 1930's?

"It cost them the war. Most countries that had made this preperation in the mid 1930s, like Britain Russia & USA etc , were able to shift to top production in most areas with a year or two of the start of the war, with every thing after that being fine tuning. It would take the Germans up until 1943/44 ,before they could finally say they had a war economy in swing.

For what its worth the Defense minister in 1934 Von Blomberg, when faced with Hitlers demands on the military ,reported the only way to bridge the gap between were they were and were they needed to be by the end of the decade, was to convert the armaments industry to mass production.

Up until mid 1941 all military contracts were annual contracts based on 'cost plus financing'. That means the company factors in price of making the weapon resources used labor etc plus profite and pass that on to the government. IF the weapon takes longer to build they get reinbursed for the difference. So there is no incentive to produce more for less. Equally as bad they horded resources regardless and used the excess resources for products on the civilian market.

Von Blomberg showed how 'multi year fixed price contracts' could be employed from 1934 on, to greatly increase production with out increasing cost or resource consumption. These studies showed that for the same industrial/financing base , they could more than triple the out put by relaxing the overtly demanding weapons specifications by a mere 10%. It would be later shown that this process also forced companes to be more frugel with resources so that they could quadruple out put based on the same resource base.

Historcially the Luftwaffe faced with the impossible demands Hitler made, swithed over from 'annual cost plus financing' to 'multi year fixed price' in 1937. Within 5 years there production increased ~ 5 times. Even when Hitler finally acknowledged that mass production would be needed , he still left his armaments mininster [Todt] powerless to enforce demands to switch contracts so , it wasn't until Speer took over that he made Hitler empower him to clean house on the armaments industry. But even that wasn't complete power.

Hitler refused Von Blomberg and set up the Wehrmacht so all the service branches came independantly to him for contracts. Through that process the top priority for production shifted ever few months based on which service branch was courting Hitler. A complete and utter mess.

To find out more read

Overy : War and Economy in the Third Reich
Deist: "Germany and the Second World War" Vol 1

Burdrass; "Demystifying the German "Armament Miracle" During World War II. New Insights from the Annual Audits of German Aircraft Producers"

Tooze "Wages of destruction" is also very good , but his data and math is flawed [armaments production can't be based on tonnage comparions , you need to factor in manufacturing efficency etc]."


So my question to you all is what if von Blomberg convinces Hitler in 1934 to focus on fixed price multi-year contracts to take advantage of economies of scale and incentive-ize arms manufacturers to produce more units for less cost, rather than the OTL contracts (cost-plus) that incentive-ized raising costs and minimized production?

Several other books discuss this affecting the army heavily (the Luftwaffe used these contracts from 1937 on, but were hamstrung by several other issues), especially in Panzer and motorized vehicle production. It took the Luftwaffe about 3-4 years to fully realize the benefits of this, so if started earlier by 1938 the army can also benefit fully from these sorts of contracts and producer "learn by doing" experience. What does this mean from 1939 on?
 
Fascinating, it seems to me that Germany could have fought a far more effective war with such an industrial base. The question is how much will it change things--will German mass produced weapons be just as good as OTL, and will the added numbers be enough to make any significant change to the OTL war against the allies? It really is a numbers game, and I don't have the numbers!
 
Here we go again, the myth that Germany wasnt really trying until the end of the war. Obviously they really wanted to lose

Your dismissal of Tooze is silly. Manufacturing efficiency (I have no idea what your etc is, btw:p) is fairly consistant across the leading industrial economies of the time, as its a function of the available equipment. While there will be differences due to certain items not being used as heavily in some countries, the overall difference is small.
The tonnage does indeed give a reasonably accurate way of comparing two economies.

As to the 5-fold increase - this is due to the huge and steady investment in industries during the war. It applied to the other countries econimies as well.
 
Even if Germany is able to produce more, and at a greater rate -recalling of course that at times Germany already outproduced major nations, and gained industry of conquered states - you must still look at resources, and what is being produced. Having more cars, tanks, or planes seems nice but the ability to fuel, and arm them becomes a serious issue. More over so what if Germany made a few hundred more tanks a year? It was facing serious industrial power from three sides, propping up allies, and fighting a multifront war under the leadership of a man whose mind was against flexibility.
 

Deleted member 1487

Fascinating, it seems to me that Germany could have fought a far more effective war with such an industrial base. The question is how much will it change things--will German mass produced weapons be just as good as OTL, and will the added numbers be enough to make any significant change to the OTL war against the allies? It really is a numbers game, and I don't have the numbers!
Essentially Germany did get to this point, but only after 1942 because Speer was finally given the authority to mandate these things. Wasteful processes like finishing and lacquering the wood on rifles was stopped, as it slowed production and added costs. Keep in mind the MG42 was borne of these efforts; as a stamped metal gun made more assembly line production it still functioned well in the field, better in fact than the MG34. Even the E-series tanks were eventually designed to be easier to mass produce, but didn't come about until the end of the war.

Basically it means the doubling, tripling, etc. of established lines after about two to three years of production. When there is a profit motive to maximize production and efficiency industry can be really resourceful. Interestingly enough in the following article:
Burdrass; "Demystifying the German "Armament Miracle" During World War II. New Insights from the Annual Audits of German Aircraft Producers"
workers were solicited for new ideas on how to increase productivity and efficiency and were given bonuses for successful ideas. This proved to be a major course of improvement in the aircraft industry, even amongst concentration camp workers (!).
Though changes to aircraft output are not likely to be much raised by this idea, for the army the effect would be huge.
Munition, small arms, and Panzer production would all boom for the same investment of resources (to a point of course, extra munitions would require extra explosive materials) and do so earlier. It wasn't a matter of "Total War", but rather encouraging manufacturers to produce efficiently. Learn by doing vastly boosted fighter and bomber production in the 1940, so for less complex production I expect much the same result.
By 1939 and 1940 German vehicle, weapon, and munition production would be closer to 1941/42 levels and just get higher every year thanks to 'learning by doing' and properly incentive-zing industry.

As to the effects on the war I have my own ideas and would like to hear others. Basically it would seem likely to me that more machine guns, munitions, and vehicle reserves (trunks and tanks) would all benefit Germany in 1939 and 1940, but the constant variant upgrades of panzer models could potentially hamper production just the same as OTL.
However, as we are assuming Hitler is more attuned to the goal of mass production, upgrades are probably forgone in favor of production. This means slightly less effective, but more units reach the front, especially spare parts. This means little for 1940 or 1941 until the invasion of the Soviet Union. At that point there is a significant benefit for the excess production. More standardized models of trucks and other vehicles early in the campaign means the vast variety of different models aren't used and therefore don't complicate supply thanks to the vast variety of different spare parts. Servicability goes up significantly, but probably doesn't change much in 1941.

1942 sees more benefits accrued as Germany now has more tanks and guns than OTL and can sustain losses more easily. Also the excess means more military units can be formed. Potentially this means the flanks at Stalingrad have modern weapons to fight the Soviets with and prevent a breakthrough that allowed OTL Stalingrad pocket to be formed. Butterflies result.
 

Deleted member 1487

Here we go again, the myth that Germany wasnt really trying until the end of the war. Obviously they really wanted to lose.
Not really what I am getting at. They were trying, but often chose the worst/most inefficient way to go about doing it. Even more often was the constant shifting of priorities by constantly changing models, upgrades, retooling, building new factories instead of expanding existing/underutilized ones, giving inexperienced/incompetent people authority, having overlapping authorities that produced powerstruggles that ultimately prevented anything from getting done (e.g. aerial torpedo struggle between the Navy and Air Force).

Your dismissal of Tooze is silly. Manufacturing efficiency (I have no idea what your etc is, btw:p) is fairly consistant across the leading industrial economies of the time, as its a function of the available equipment. While there will be differences due to certain items not being used as heavily in some countries, the overall difference is small.
The tonnage does indeed give a reasonably accurate way of comparing two economies.

As to the 5-fold increase - this is due to the huge and steady investment in industries during the war. It applied to the other countries econimies as well.
Its not my dismissal. The post quotes is someone else's idea.
Read:Burdrass; "Demystifying the German "Armament Miracle" During World War II. New Insights from the Annual Audits of German Aircraft Producers"
It goes to show how not just the aircraft manufacturers, but also most armaments manufacturers were de-incentivized to produce equipment efficiently. It wasn't a matter of not trying, but rather the contracts given did not encourage manufacturers to find new, more efficient ways to make weapons, goods, etc.
Interestingly enough it also goes on to show how Speer's essentially faked and propagandized his 'production miracle' partially by taking credit for Erhard Milch's work and Todt's reforms (among other tricks) that only kicked in after Speer's took over.
Much in the Nazi system encouraged or produced inefficiencies by overlapping efforts, centralizing too many ministries under one person (Goering) not suited for the job that left lots of work undone.

Even if Germany is able to produce more, and at a greater rate -recalling of course that at times Germany already outproduced major nations, and gained industry of conquered states - you must still look at resources, and what is being produced. Having more cars, tanks, or planes seems nice but the ability to fuel, and arm them becomes a serious issue. More over so what if Germany made a few hundred more tanks a year? It was facing serious industrial power from three sides, propping up allies, and fighting a multifront war under the leadership of a man whose mind was against flexibility.
I am looking at resources. Read the article I suggested Astrodragon. It shows how using the same resources it was possible to produce more, especially pre-war/early war with the same amounts of materials/workers by incentivizing industry to be more efficient by tying their profits to it. Germany eventually did adopt these methods, but really only in 1942 or even later, depending on the weapon system/branch of service. This WI is about Germany realizing it needed to do so in 1934, at the start of rearmament rather than DURING THE WAR.
Efficiency also means using what you have more effectively, meaning that many of the extras (artillery, munition, AT gun, trucks, or tanks) would require different things. Fuel would prevent a major expansion of mobile units (trunks/tanks), but it would create more spares in case of losses, so units could get back up to strength quicker, even it if just means more spare parts. Now some weapons like artillery, both indirect and anti-tank, don't require things Germany doesn't have. Instead it means Germany can give the Romanian units at Stalingrad modern high-caliber AT guns and artillery to them to hold the flanks. It also means more for German units to fight the Russians.

Granted there is a tipping point where these things wouldn't matter. I'm not suggesting this is a war-winning WI, but rather what it means for how the war plays out. The Germans not getting pocketed at Stalingrad means very different things for the Eastern Front, including making the war last longer, the Soviets getting even more torn up and being weaker post war and the effects that has, as well as what that means for Europe post war.
 
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1942 sees more benefits accrued as Germany now has more tanks and guns than OTL and can sustain losses more easily. Also the excess means more military units can be formed.
Not really your overlooking the fact that fielding additional units requires more than simply ramping up production. For instance in Britain and Germany the bigger bottleneck for the airforces was pilots not planes. And if Germany was able to say produce three times as many tanks before Barbarossa as it did OTL its unlikely going to be able to field all of them due to hitting a logistic wall.
 
Also, Germany had other bottlenecks in producing armored vehicles. One of the greatest ones was lack of strategic materials, such as tungsten, molybdenum, chrome, and rubber. For example, German armor for tanks was of very poor by the end of the war due to the lack of alloys.

Given this, more tanks would result in these alloys needed for high quality being consumed sooner.

Not really your overlooking the fact that fielding additional units requires more than simply ramping up production. For instance in Britain and Germany the bigger bottleneck for the airforces was pilots not planes. And if Germany was able to say produce three times as many tanks before Barbarossa as it did OTL its unlikely going to be able to field all of them due to hitting a logistic wall.
 

Deleted member 1487

Also, Germany had other bottlenecks in producing armored vehicles. One of the greatest ones was lack of strategic materials, such as tungsten, molybdenum, chrome, and rubber. For example, German armor for tanks was of very poor by the end of the war due to the lack of alloys.

Given this, more tanks would result in these alloys needed for high quality being consumed sooner.
http://docs.google.com/viewer?a=v&q...sAXzyw&sig=AHIEtbTy94boTgWPNaWJoNwwg4PRDeAFqg
The Germans managed to increase efficient use of limited aluminum resources in aircraft production, resulting in more airframes without needing more materials thanks to multi-year fixed contracts. This could have been applied to armor production especially prewar, but wasn't until about 1942.
 
http://docs.google.com/viewer?a=v&q...sAXzyw&sig=AHIEtbTy94boTgWPNaWJoNwwg4PRDeAFqg
The Germans managed to increase efficient use of limited aluminum resources in aircraft production, resulting in more airframes without needing more materials thanks to multi-year fixed contracts. This could have been applied to armor production especially prewar, but wasn't until about 1942.

Nor was it applied by anyone else at the time.

I think you are making the mistake of confusing the difference between producing armaments efficiently and producing efficient armaments.
German industry was quite good at the first, not nearly so good at the second.
 
I have a few issues with your response. I also have new issue with ideas posed in the OP.

First, a quick review of the document you have cited does not seem to reveal anything in it that supports your contention about the use of aluminum in airframes. Do you have any page number for something in the paper that supports your claim?

Second, and more importantly, your assertion fails to address the underlying issue I posed. Namely, how would a new type of contract overcome that encourages efficiency overcome the actual physical shortages of minerals and other materials that were not produced in sufficient amounts from territories controlled by the Reich and/or unavailable in sufficient quantities by trade?

Unless you can show there had been a monumental waste in the use of these strategic materials under under the old system of procurement, the new system of procurement cannot overcome a lack of molybdenum, tungsten, etc.

You appear to be confusing increases of production by improved production techniques with a means of overcoming scarcity of resources. Improved efficiencies of production cannot create more scarce minerals. Research may find new techniques around the shortages, but such research into new techniques obviously has it own costs.

Another point not addressed is what incentive did the German firms have to change. If they were making more profits under the old procurement system, they might well resist the new system. Nazi Germany was basically a very corrupt kakocracy, with political connections counting for much. A firm that was politically connected and profiting from the old system presumably use its political connections to resist these changes. To have these changes come earlier would seem to require a major shift in the way the Nazis governed and in the relationship between the Nazis and the powerful industrialists.
http://docs.google.com/viewer?a=v&q...sAXzyw&sig=AHIEtbTy94boTgWPNaWJoNwwg4PRDeAFqg
The Germans managed to increase efficient use of limited aluminum resources in aircraft production, resulting in more airframes without needing more materials thanks to multi-year fixed contracts. This could have been applied to armor production especially prewar, but wasn't until about 1942.
 

Deleted member 1487

Nor was it applied by anyone else at the time.

I think you are making the mistake of confusing the difference between producing armaments efficiently and producing efficient armaments.
German industry was quite good at the first, not nearly so good at the second.

Actually it was applied by the Americans when they started to rearm. As to the second part you have that backward. It was more about craftsmanship than efficient production, so they had inefficient methods for effective armaments. Ever heard the over engineered quip about German weapons?
 
Here we go again, the myth that Germany wasnt really trying until the end of the war. Obviously they really wanted to lose.

I don't think that's an actual myth.

It's that Germany never expected or planned to fight such a massive war for as long as they did. Germany's leaders based their decisions on the assumption that they would have a nice short and limited "Silesian war" (Poland in 1939), that an accomodation could be reached with Britain as fellow nordic when Germany did plan a major war in 1942, and that the Soviet Union would collapse in 6 months. Based on their assumptions, Hitler and Germany based their economic decisions in a way to balance the needs for those limited, short term wars, and other considerations (like Hitler's obsession that the Dolchstosslegende meant that German civilians needed to be assured of good times or would turn against him).

This was the general problem with all the Axis countries. Japan never thought the Marco Polo Bridge Incident would mean an 8 year war with China, and it thought the US would agree to a negotiated peace after 6-12 months. Italy thought the war would be over in a few months when Mussolini declared war on France and Britain.

In contrast, all the Allied countries assumed the war would be prolonged and require mass mobilization of society to insure victory. Nationalist China always intended to drag the war out as long as possible. Both Britain and France assumed they would never several years of military build up before they could launch a successful attack on Germany. The US likewise expected a very long war. Only the Soviet Union possibly expected a short war where they were the offensive power, but by 1942 pretty much expected it would take years to end (in contrast, Hitler still thought Soviet reserves were basically gone in late 1942 and that the war in the east would be over soon).

Because of their different conceptions of how long the war would last, each side made vastly different decisions on how to husband their resources.

It was only after Stalingrad that it really sinked into Hitler's mind that he was in for a long, bloody struggle that meant the entire German society needed to be enrolled for "Totaler Krieg" or that he should abandon chimerical wishes that Germany should divert resources to building a surface navy to prepare for a future war with the USA.
 
I don't think any of the combatants thought that the war would last this long. Certainly, no one prepared for the level of conflict that occurred. Germany was no different than the other combatants.

I don't think that's an actual myth.

It's that Germany never expected or planned to fight such a massive war for as long as they did. Germany's leaders based their decisions on the assumption that they would have a nice short and limited "Silesian war" (Poland in 1939), that an accomodation could be reached with Britain as fellow nordic when Germany did plan a major war in 1942, and that the Soviet Union would collapse in 6 months. Based on their assumptions, Hitler and Germany based their economic decisions in a way to balance the needs for those limited, short term wars, and other considerations (like Hitler's obsession that the Dolchstosslegende meant that German civilians needed to be assured of good times or would turn against him).

This was the general problem with all the Axis countries. Japan never thought the Marco Polo Bridge Incident would mean an 8 year war with China, and it thought the US would agree to a negotiated peace after 6-12 months. Italy thought the war would be over in a few months when Mussolini declared war on France and Britain.

In contrast, all the Allied countries assumed the war would be prolonged and require mass mobilization of society to insure victory. Nationalist China always intended to drag the war out as long as possible. Both Britain and France assumed they would never several years of military build up before they could launch a successful attack on Germany. The US likewise expected a very long war. Only the Soviet Union possibly expected a short war where they were the offensive power, but by 1942 pretty much expected it would take years to end (in contrast, Hitler still thought Soviet reserves were basically gone in late 1942 and that the war in the east would be over soon).

Because of their different conceptions of how long the war would last, each side made vastly different decisions on how to husband their resources.

It was only after Stalingrad that it really sinked into Hitler's mind that he was in for a long, bloody struggle that meant the entire German society needed to be enrolled for "Totaler Krieg" or that he should abandon chimerical wishes that Germany should divert resources to building a surface navy to prepare for a future war with the USA.
 
If the contracting changes do start the changes suggested, then the new limit to production becomes raw material inputs. This is an actual finite limit, rather than a false limit set by poor planning and the like. Britain faced finite limits on manpower as well as raw materials, and I have a vague recollection of the US having to choose between new locks for the Panama canal or battleships when allocating steel during WW2, so finite limits are a natural fact of life in Total War.

The question is how much stuff could be built with the raw materials inputs available to Nazi Germany from the year when these effects come into play, say 1939? Twice as many tanks and 5 times as many trucks for Barbarossa for example?
 
I don't think that's an actual myth.

It's that Germany never expected or planned to fight such a massive war for as long as they did. Germany's leaders based their decisions on the assumption that they would have a nice short and limited "Silesian war" (Poland in 1939), that an accomodation could be reached with Britain as fellow nordic when Germany did plan a major war in 1942, and that the Soviet Union would collapse in 6 months. Based on their assumptions, Hitler and Germany based their economic decisions in a way to balance the needs for those limited, short term wars, and other considerations (like Hitler's obsession that the Dolchstosslegende meant that German civilians needed to be assured of good times or would turn against him).

That's another myth, that Hitler didn't want population to feel the lack of goods. Rationing was limited, true, but it didn't have to be severe as there were no goods to be had anyway. Since significant part of industry was directed toward military production little was left for consumer goods while imports were discouraged to prevent hard currency outflow. Germans felt the constraints of de-facto war production even before war started, it just wasn't official.
 
If the contracting changes do start the changes suggested, then the new limit to production becomes raw material inputs. This is an actual finite limit, rather than a false limit set by poor planning and the like. Britain faced finite limits on manpower as well as raw materials, and I have a vague recollection of the US having to choose between new locks for the Panama canal or battleships when allocating steel during WW2, so finite limits are a natural fact of life in Total War.

The question is how much stuff could be built with the raw materials inputs available to Nazi Germany from the year when these effects come into play, say 1939? Twice as many tanks and 5 times as many trucks for Barbarossa for example?


Of course that means you end up with Italain scenario. Build up your forces at some point then realize that technology progressed so much your weapons are obsolete/obsolescent. Germany problems wouldn't be so bad since if we are talking about 1939 increase that means more Pz-III and -IV which could be upgraded.

Of course twice as much tanks and 5 times as many trucks mean that Barbarossa will be an even bigger bitch to supply than OTL as already overloaded railroads will be harder even pressed to move forward more POL and spares.
 
Actually it was applied by the Americans when they started to rearm. As to the second part you have that backward. It was more about craftsmanship than efficient production, so they had inefficient methods for effective armaments. Ever heard the over engineered quip about German weapons?

No, actually it wasnt.

The British at least knew how they could increase the efficiency of their production, but they were limited by the availability of machinery and trained manpower.

The main change during WW2 (and it started before the war) was the reduction in the amount of machining of parts (which produces a lot of waste metal) to techniques such as molding and pressing.
But even then, a lot of the waste material can be reprocessed, it mainly saves on machinery such as milling machines and time
 

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It's that Germany never expected or planned to fight such a massive war for as long as they did. Germany's leaders based their decisions on the assumption that they would have a nice short and limited "Silesian war" (Poland in 1939), that an accomodation could be reached with Britain as fellow nordic when Germany did plan a major war in 1942, and that the Soviet Union would collapse in 6 months. Based on their assumptions, Hitler and Germany based their economic decisions in a way to balance the needs for those limited, short term wars, and other considerations (like Hitler's obsession that the Dolchstosslegende meant that German civilians needed to be assured of good times or would turn against him).
They didn't "expect" to fight a long, massive war because the German economy cannot do it, and therefore the only rational way to wage war was to assume short, decisive wars. At every crucial point in the war it was all about an all or nothing charge. In 1940 for example to precipitate a long war and husbanding their resources for it Germany out of necessity must fight a defensive war from the beginning against France/UK because of its own economic inferiority in terms of resources especially in raw material which prevents it from waging long term offensive wars. This is of course a losing proposition from the beginning because Germany would be stuck in a war of attrition against economically superior opponents. The only alternative was of course to throw everything into one great offensive and hope it succeed in knocking out its opponent in one go. This worked in Poland, 1939 France in 1940, and not in the Soviet Union in 1941. But the truth is the Germans did go all out for each one of those offensives. During operation Barbarossa there were significant realization as early as August within the German government that the war couldn't be won militaristic and must brought to a political end, Hitler just realized this a year later than everyone else. From this perspective the whole "Totaler Krieg" that Goebbels and Speer and Himmler put into practice was actually the irrational move: since by this point the war was already lost and it stopped making sense to raise more on a losing hand.
 
Germany fought a 4 year war only 20 years before WW2, in fact Hilter got a medal in this long war. Germany, and all industrialised economies for that matter, are perfectly able to sustain long wars at a certain level its just that the level at which Japan can sustain a long war isn't nearly high enough to defeat the US.
 
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