Rheinische Metallwaaren- und Maschinenfabrik AG
The closing 19th century was a period of sweeping technical and economic progress. In 1876, Nikolaus Otto built the first four-stroke engine, Alexander Bell brought the telephone on its way, Edison pioneered entertainment electronics and, in 1878, invented the electric light bulb, Werner Siemens presented the first electric train in 1879, and Maybach, Daimler and Benz achieved automotive engineering advances in the 1880s.
Rheinmetall's founder, Heinrich Ehrhardt, was an industrial engineer from Zella in central Germany's Thüringen region. After starting out as a sales representative and completing his higher education on the side, Ehrhardt worked for a number of years as an engineer for a cast steel works in Witten, where he improved the production of train axles. In 1878 the 38-year-old Ehrhardt founded his own small machine tool factory in Zella. He quickly attained an excellent reputation as a designer and industrialist, and the granting of licenses for his patents brought him into contact with directors of foreign enterprises.
Ehrhardt had become mutual friends with the manager of a munitions factory, Josef Massenez. When Massenez's company, Hörder Bergwerks- und Hüttenvereins, won a contract from the War Ministry that it could not fulfill, Massenez offered it to Ehrhardt in exchange for a commission. Although Ehrhardt lacked the technical expertise, production capacity, and sufficient capital, he was willing to take the risk. Accepting the job, Ehrhardt brought together a group of venture capitalist associates and on April 13, 1889, founded Rheinische Metallwaaren- und Maschinenfabrik AG (Rhine Metalware and Machine Factory Joint-Stock Company), which was registered on May 7 as a business in Düsseldorf on the Rhine.
On April 13, 1889 the engineer Heinrich Ehrhardt established Rheinische Metallwaaren- und Maschinenfabrik Aktiengesellschaft, in Düsseldorf. From the first two words of the firm's name the word "Rheinmetall" was extracted to become a trade name. Very early in its history the company adopted a trade-mark that was substantially similar to that used by Rheinmetall today.
With the completion of his first government contract, Ehrhardt began construction of Rheinische Metallwaaren- und Maschinenfabrik's own factory in Düsseldorf-Derendorf, to which production gradually shifted. A metal tubing manufacturing facility and an iron foundry enabled production of nonmilitary products as well. In 1889 a plant was set up in Düsseldorf-Derendorf. The expansion of the production programs led to increasing needs for steel, so in 1892 Ehrhardt and his son-in-law Paul Heye acquired a small forge in Rath that they named Rather Metallwerk Ehrhardt & Heye. In 1896 the forge was merged into Rheinische Metallwaaren- und Maschinenfabrik as the Rath division. Thus, Ehrhardt controlled a secure, integrated output of quality steel and semi-finished products that rendered him independent from suppliers.
In 1896 Ehrhardt developed a 7.5-cm field cannon into the first barrel recoil cannon suitable for field service, a significant technical development at that time. It brought Ehrhardt high accolades from Norwegian kings, Austrian emperors, and finally German Kaiser Wilhelm II. With this development, Ehrhardt's company was guaranteed great business success. In 1898 the company made the presentation was made of the first barrel recoil cannon fit for field service. Rheinische Metallwaaren- und Maschinenfabrik expanded its production program and strengthened its market share with its acquisition in 1901 of Sömmerda-based Munitions- und Waffenfabrik from Dreyse. At its factory, Dreysesche Gewehrfabrik, Munitions- und Waffenfabrik produced hand weapons, cartridges, and shell fuses.
There was no law in Germany forbidding the export of war material by private firms, and on the 26th of May, 1900, the Storting of Norway unanimously voted 1,000,000 crowns for new quick-firing artillery. As a result of the experiments, and of observations made in regard to tests in foreign countries, the commission having the matter in charge reported that the Schneider-Canet and the Ehrhardt (Rheinische Metallwaren und Maschinenfabrik) were the best and that it had found both very satisfactory, but that it proposed to adopt the Ehrhardt system for the new field artillery materiel with a few modifications, of which the most important was a Nordenfeldt mechanism for the gun.
In 1901 England was able to purchase from the Rheinische Metallwaaren- und Maschinen-Fabrik, of which Herr Heinrich Ehrhardt was the chief constructor, 18 batteries of 6 guns, 9 ammunition and 3 provision wagons. These were delivered five months after the contract was signed. The Government expressed a wish that no further supply of guns would be made. The purchase was made in Germany, because the British firms, of which only two, viz., Vickers, Sons & Maxim, and Armstrong, Whitworth & Co., were capable of turning out good war material, were so slow in their delivery.
By 1907 Rheinmetall numbered among the top 100 companies of the then German Reich - measured, that is, by headcount. Unlike parameters such as sales, cash flow, market capitalization or nominal capital, the number of employees - especially if one wishes to compare the size of a company over a period of a hundred years or more - is an indicator which in a sense is timeless and requires no elaborate methods of conversion. At the very top are two state-owned enterprises: the Prussian-Hessian Railway with 486,381 employees, and the Deutsche Reichspost with "only" around half as many (277,116). Ranking third and sixth, respectively, come the first private-sector companies: Krupp in Essen with a workforce of 64,354, and Siemens & Halske and the Siemens-Schuckertwerke in Berlin, which together employed 34,324. The annual report for 1907 puts the number at 3,048 workers, who earned an average of 4.68 Reichsmarks per shift (in those days the money was better at Krupp). Rheinmetall also employed a thousand or so 'Privatbeamte' (literally "private civil servants"), as salaried workers were then known.
In 1907 the company had four production plants, including two in Düsseldorf-Derendorf - the recently rebuilt-on site of former Werk 1 and the Germania factory directly across from it, now occupied by a DaimlerChrysler plant - as well as the steelworks in Düsseldorf-Rath and the former Dreyse-Werk at Sömmerda, faraway in Thuringia. The firing range in Unterlüß was in Rheinmetall hands by this point too. The company owned no subsidiaries, though it did have a number of minority holdings: the Reisholz pipe plant in Düsseldorf-Reisholz, originally founded in 1899 by Heinrich Ehrhardt as Press- und Walzwerk AG, and now part of Mannesmannröhren-Werken.
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