Fritz Werner - A German company in Burma
Considered (and heavily criticised) by many as an armaments company whose products are mainly used to oppress the Burmese people. In the following, I will try to give a more realistic view of the company and its activities in Burma/Myanmar. In doing so, I’m drawing primarily upon the work of my colleague Hans Bernd Zoellner: ‘Unverstandene Partnerschaft in der ‘Einen Welt’* and his Ph.D thesis. * An excerpt has been translated into English and was published in the proceedings of ‘Tradition and Modernity in Myanmar’ (Berlin 1993). I’ve attended that conference and met all those big names of Myanmar research: John O’Kell, Sarah Bekker, Manuel Sarkisyanz – just to name a few. Not to forget Annemarie Esche and Uta Gaertner, my teachers at Humboldt University, Berlin.
The company was founded in 1896 by Friedrich Carl Werner, who had developed a milling machine that could improve the production of infantry ammunition. The new machine was ‘dual-use capable’, i. e. it could be used to make lipstick cases as well as shell cases. In the ‘heyday’ of imperialism, which ended so tragically in the First World War, it made more sense for an inventor to rely on ammunition. In 1911, the company acquired premises in Berlin-Lichterfelde, where its headquarters were located for a long time. When the founder died in 1939, it had 5,000 employees. The company had been active in international business since the 1920s, e.g. in Iran, which was then ruled by Reza Pahlavi I, the father of the last Shah. After the German surrender in 1945 the factory was dismantled, but production resumed the same year, this time in the civilian sector.
Parallel to the construction of the Berlin plant, the company acquired a plot of land in Geisenheim near Wiesbaden in 1955. Production for military use was resumed after the rearmament of the Federal Republic of Germany had started in
the same year. Thus, the production of civilian and military goods was locally separated, with the headquarters remaining in Berlin. At that time, Fritz Werner was no longer a private company. It got into financial difficulties at the beginning of the 1950s and was taken over by the federal government in order to secure jobs. However, the name was retained. The management of the new state-owned company was taken over by Dr. Rudolf Meyer, who will be discussed below. He put the company back on the path to success. In 1966 Fritz Werner became part of Deutsche Industrieanlagen GmbH. (DIAG), in which various West Berlin companies in the metal industry were united. This was part of a plan to revitalise the divided town’s mechanical engineering industry. Dr Meyer was placed at the head of the new group of companies. In 1974 she got into trouble. Meyer was chosen as the scapegoat and fired.
Until the end of the 1970s, the export of plant facilities for military hardware formed the economic backbone of both Fritz Werner and DIAG as a whole. The fall of the Shah of Iran in 1979, whose country was one of the most important customers, led to a rethink and a focus on civilian production. In 1990 the company was sold to the German truck manufacturer MAN. At that time, just over 10% of the workforce worked in the armaments sector. The Berlin-based Fritz Werner AG which produced non-military goods, was also sold in 1990. The Myanmar business was then completely relocated to Geisenheim. The company ‘Myanmar Fritz Werner’ will be discussed later. In 2009, 70% of the company’s shares were sold to IPIC, part of the Dubai Sovereign Wealth Fund. Because of a corruption scandal, the purchase of IPIC was reversed. Finally, in 2012, it was sold to the Hamburg company Münchmeyer, Petersen & Co. (MPC) and since then it has been 100% owned by them.
In 1955 the Burmese Embassy in London contacted the Foreign Office in Bonn. The reason for this was that she was keen to entrust the development of the country’s industry to countries that on the one hand posed no threat to the country’s independence and on the other hand were renowned for their efficiency. So it came about that Germany and Israel became the preferred suppliers. The Foreign Office passed the request on to the federally owned company Fritz Werner, which was more than happy to get contracts.
The chief of the Burmese armed forces, General Ne Win, was one of the ’30 comrades’ who formed the Burma Independence Army (BIA) under the command of Aung San. When it was founded, the force claimed to be an army of the people. The soldiers were cared for simply but well, and so the Defense Service Institute was born, a commercial utility that was effectively controlled by the military leadership. By the early 1960s, it had become the country’s largest commercial enterprise. This state enterprise serving the military played an important role in Fritz Werner’s entry into the Burma business. The company quickly gained a reputation as a reliable supplier and when plans were made to set up an independent armaments industry in 1958 it was the first choice. The Burmese side should be put in a position to take production into their own hands. Dr. Meyer had the brilliant idea of bringing young trainees (mostly – but not exclusively – military personnel) from Burma to Germany and training them in Berlin and Geisenheim. In total, almost 700 Burmese have completed such industrial training over the years. A relationship of trust quickly developed between the teachers and their students, which proved to be extremely advantageous for further business. Zoellner says that the trainers almost took on the role of ‘surrogate parents’ for the friendly guests who were eager to learn. After their return, many of them took up important posts in Burma’s economy and politics. Those who had attended training in Germany played a vital role in the establishment of the Industrial Training Centre (ITC) in Sinde, a small town on the west bank of the Ayeyarwady River, not far from Pyay. It was the site of a factory for agricultural machinery built with the help of Fritz Werner. The Burmese side was impressed by the German dual education system and asked the German embassy in Yangon if it could help with the development of an institution based on the German model. More about this project under: https://www.dw.com/en/sinde-a-german-myanmar-success-story/a-47093178. There were also close contacts at management level. By the
second half of the 1960s at the latest, Ne Win and Dr. Meyer developed a ‘male comradeship’ (Maennerfreundschaft, quoted from Zoellner) that went so far that the general described him as a ‘family member’ in a personal letter. The files of the German Foreign Office show that in July 1958/59 the construction of an ordnance factory in Rangoon was an issue. The project had a volume of 20 million kyat (equivalent to 17.5 million DM at the time) and the embassy suggested supporting it with a loan guarantee. Which was rejected. Dr Meyer nevertheless completed the project and payment was made within 27 months. Other activities included the purchase of 10,000 G-3 assault rifles. The rifle was later built under licence in Burma. Last but not least, the decisive factor in approving the transaction was that the company wanted to preempt competitors from the Eastern bloc. With the help of Fritz Werner, an independent armaments industry for artillery shells and light infantry rifles emerged in Burma.
According to the embassy’s assessment, Ne Win was an ‘apolitical man with no particular ambitions’. A memo said: ‘Everything the military does makes sense’. The general gained this positive reputation not least through the ‘interregnum’ from 1958 to 1960, during which the military restored order in the country. His voluntary retirement from power greatly contributed to Ne Win’s prestige. His bloodless seizure of power in 1962 changed little in this assessment. The ‘third way’ that the country tried to follow between the West and the Eastern Bloc had a number of supporters in Germany. Burma became (as Zoellner puts it) ‘a favourite child of German development policy, which was kept out of all controversies in this area. Even after the popular uprising in 1988, there was a ‘Burma lobby’ whose members came from all parties and in which political differences did not play a decisive role.’
When the two sides worked together, a problem soon arose that has not been resolved to this day. Myanmar is a hierarchically structured society; which, for a change, applies to all ethnic groups in the country. On the Burmese side, cooperation was a ‘top priority’, i. e. ministers and sometimes even the head of state himself were involved. For the German side it was a factual problem that also had to be solved at this level. This was completely unacceptable for the Burmese partners: a minister could only communicate with his own peers, even if the interlocutor of the same rank was not even privy to the matter. Otherwise there was a risk of loss of face.
Ne Win and Dr. Meyer, who had a close personal relationship, were unequal partners who could not appear together in public, as this would have meant a ‘loss of face’ for the head of state. This is how a special relationship developed, as shown by the numerous visits by the Burmese head of state to Germany. With the exception of his state visit in 1968, all his visits were unofficial. However, the official diplomatic protocol of the Federal Republic of Germany was always included and so you could often see Ne Win whizzing through the Rheingau region accompanied by a police escort. When working with Dr. Meyer, the general served as head of the Defense Service Institute. Fritz Werner was referred to in this context as the ‘DSI Continental Branch’, i.e. an offshoot of the
Burmese company. The dictator expressed the appreciation of his German partners by having a pavilion built near the Geisenheim plant, modelled on a reception hall in the royal palace of Mandalay. Zoellner notes that there are two other buildings of this type in Japan and in Montreal, the latter standing there during the 1967 World’s Fair. According to my information, however, the situation was as follows: the Burmese pavilion in Montreal was dismantled and given to the Fritz Werner company as a gift. Supposedly to save on the costs of return transport, which would probably have exceeded those for a new building. Fritz Werner paid for the transport. Since then the pavilion has been in Geisenheim and is occasionally the subject of newspaper articles, etc.
The Burmese army consisted essentially of infantry units armed with weapons ‘Made in Burma’, the manufacture of which was not too much of a burden to the national budget. The navy and air force were small and had only outdated equipment. In addition to Rangoon, another armament centre was established near the town of Prome on the west bank of the Ayeyarwady at the foot of the Arakan Yoma. In addition to military goods, civilian goods were also manufactured there.
Fritz Werner contributed to the rise of Germany as Burma’s second most important trading partner. Seen from the German side, the Burma business was secondary, in terms of imports and exports the country was ranked 131st and 100th among the trading partners. For the Fritz Werner company itself, the Burma business was ranked as the third or fourth most important one. The list of plants built by her in Burma is manifold. Zoellner mentions, among other things, a central laboratory in Rangoon, a brass mill with wire drawing, production of household glass, etc. In addition, Fritz Werner supported the local partner as a consultant on
various projects. Zoellner mentions a fertiliser factory and the setting-up of a tin mine. In short, it was an all-round job in the field of plant engineering. However, all this could not stop the downside trend of ‘Burmese socialism’. A joint company was founded in 1984: Myanmar Fritz Werner. The Burmese partner was the Heavy Industries Corporation, which was under the Ministry of Industry II. It was the first time since Ne Win came to power in 1962 that a foreign private company was able to establish itself in Burma. Even though it was federally owned. The company’s shares belonged to 60% to the Burmese side, the remaining 40% to the German partner. Their field of activity was described as ‘production and sale of various types of machines’. If my information is correct, it still exists today.
These close contacts meant that the Fritz Werner company was perceived by the Burmese side as the actual representation of the FRG in the country and not the diplomats from Bonn. People often spoke of the ‘two German embassies’, with the official embassy often only playing second fiddle. Personal rivalries and mutual prejudices led to misunderstandings and hostilities on both sides.
The popular uprising in 1988 led to a complete reassessment of the company’s activities in Burma. She suddenly became the whipping boy of the German press, which was homing in on their arms deals. The liberalisation of the country’s economy eliminated its unique selling proposition and it had to face competition from other providers. My friend Bernd Bieger was the company’s representative here in Burma until his tragic death in 2011. Those who read German can find more information under: https://oldburmahand.com/die-zocker-von-rangun/. He often told me how difficult it was for him to get contracts. While he was previously admitted to the minister himself without prior notice, he had to join the queue later. The prejudice of being an ‘arms trafficker’ stuck with him until his death, although the arms business had been a thing of the past. Instead, the company tried her luck in various business fields. After Bieger’s death, Ralf Wiegand took over his post and on July 2, 2019 the end came: Fritz Werner closed its business premises in Yangon and I was invited to the farewell party. A chapter of German history in Burma/Myanmar was over.