How The Soviets Split Carl Zeiss

for nearly half a century there were two carls isis one based in the federal republic of germany or west germany the other in the german democratic republic or east germany wait is isis a word i'm not sure if it is whatever the carl zeiss of today is the west german variant their work in lithography and euv sits on the cutting edge of what is possible in nanoscale technology but the girl's ice of east germany was fascinating too it grew to be a massive industrial conglomerate doing cutting-edge research into optics military tech and semiconductors in this video i want to step away from asia once more and look at a fascinating history one of germany's most iconic companies split in two between east and west capitalism and socialism let's go but first yes you know it i want to talk for a few moments about the asian nomentry patreon if you like what this channel does you can support the work by joining the early access tier early access members get to see new videos before they are released to the public there's also a general support tier and signing up for that would be amazing too so head on over to the patreon page and take a look i deeply appreciate anything you'd be able to sign up for thank you and on with the show we do not need the whole story on carl zeiss the man or the company here is an abbreviated history on things up until world war ii carl zeiss was born in 1816 to a family of artisans he started a workshop and that workshop repaired university equipment made microscopes and sold scientific instruments like eyeglass lenses and thermometers in 1866 zeiss recruited ernst abba a brilliant 26 year old physicist from the university of jenna abba's insights on the movement of light rays through microscope lenses helped the company to move beyond crude trial and error manufacturing and gave it a leg up on its competitors after zeiss's death in 1888 abba purchased sole ownership of the company from carl's son he then transferred his ownership to what is now called the carl zeiss foundation the foundation has no owners or shareholders its purpose was to guarantee the company's existence after abba's death and that its employees can partake in its economic success the foundation's guidelines outline social reforms like health insurance pensions profit sharing equality in hiring decisions overtime pay and nine hour work days excess profits would be invested in the working population of jenna critically dr abba wrote in a provision saying that the company's seat of operations should not be removed from the city of jenna this provision cannot be modified but abba didn't know about world war ii at the end of world war ii in april 1945 the us army first arrived at and occupied the city of jenna but the city fell within the soviet zone of influence so the united states had to withdraw from the area in july of that year by then zeiss was already an industrial crown jewel as part of a policy to bring leading german scientists under american control the americans quickly speared away 120 to 130 the exact number is unclear of the company's top technicians and execs they would be resettled in the west german city of oberkohen the americans promised the zeiss workers that their papers and equipment would soon follow but those got shipped to the united states whoops once they arrived in oberkohen the small group of managers and scientists began starting up production they formed a new company called zeiss opton with the majority of the stock issued to the zeiss foundation regarding abba's jenna provision the state government of baden-wurttemberg simply issued a decree to add a second domicile this essentially allows the zeiss opton managers to assume control of all the foundation's assets outside of the soviet zone unprecedented but then again these were unprecedented times a few zeiss employees voted not to abandon the jenna plant after all jenna was their home they may have also believed that they could work with the soviets or that the soviets would never dare try to dismantle the world famous zeiss factories it was not an uncommon attitude at the time with the soviet occupation and unknown quantity well the soviets did it twice on july 9 1946 the soviet council of ministers ordered the complete dismantling of the zeiss factories the equipment along with 300 former zeiss employees would be sent to the city of krasnogorsk a center for soviet military optics research the soviet military administration in germany appealed to stalin and the man of steel ordered the council to leave a small part behind the council agreed to leave six percent of the factory's capacity what the soviets did to zeiss was not all that unusual for an amazing chronicle of this time period i recommend an apple bomb's iron curtain the crushing of eastern europe 1944-1956 really go read it anyway before the opt-on management board left they appointed some caretakers in jenna to act in the company's interests for a brief amount of time the two companies opton and jenna and their boards agreed that the jenna caretaker board would be the sole representative of carl zeiss the former corporate entity and foundation both parties agreed to do this so not to agitate the soviets into expropriating what was left of the company's assets there also might have been some blackmailing going on behind the scenes by the soviets attempting to use the opton board members prior involvement in nazi war crimes to pressure them into accepting full power of attorney from jenna this facade ultimately failed zeiss rebuilt some of its jenna factories but in 1948 the new german state expropriated all of the foundation's assets without compensation a new state-owned enterprise called v-e-b carl zeiss jenna took over the assets v-e-b meaning volkswagen or betriep or state-owned enterprise so here is a philosophical question for you carl zeiss used to be one corporation owned by one foundation now you have two companies and two foundations in two parts of the world both of them claiming to be the one true carl's ice you now got some sort of weird ship of theseus situation going on both of the companies essentially had to start from zero both had critical members of the old company working for them both claimed to be the real carl zeiss with the backings of their respective governments which one do you believe what happened next can be seen as a microcosm of the cold war starting in the 1950s the east german regime took control of the old carl zeiss foundation entity and began claiming identity and control of the zeiss trademarks remember this east german foundation is by now essentially an empty shell the corporate assets and employees are now actually part of veb carl zeiss jenna the state-owned enterprise the east german zeiss foundation exists for the sole purpose of staking claim to the old zeiss trademarks the two firms battled it out in court over the next few decades as you might guess the western courts backed zeiss opton the west germany version while the soviet courts backed zeiss jenna the east germany version the legal intricacies are pretty fascinating to me and i recommend zeiss vs zeiss by isaac shapiro if you want to learn all the nitty gritty details but i'm going to skip all that and tell you the ending after nearly two decades of litigation the two companies split the world in half and agreed not to use the zeiss trademark in each other's half of the world they can still operate there just not use the zeiss name zeiss of west germany would use the name opton in eastern bloc countries zeiss of east germany went with something like ausgenna and western block countries there is little information out there about veb carl zeiss jenna lozai's opt-on carried on in the optics field veb zeiss jenna would eventually grow into a massive technology conglomerate for a while after its reorganization zeiss jenna attempted to build proficiency in the sciences and engineering there were some successes they exhibited a special new electron microscope in 1952 and in 1955 built east germany's first working computer the oprima the optic reckon machine or oprima was for lens systems calculations it had been in the planning since 1946 it was a relay computer which means it used electrically operated switches to do calculations with its 8313 relays it had a clock speed of about 100 hertz and could perform square root operations in 1.2 seconds that being said the company only made two and the machine's relay technology had already been superseded by vacuum tube computer technology at the time of its release in the 1960s the ruling socialist unity party of germany or sed shifted the company's direction towards pure engineering but due to import restrictions and supplier difficulties the company fell behind its western competitors substantial quality control issues emerged as early as 1960 and by 1968 the company was essentially bankrupt in the 1970s and 80s sed gradually reorganized the east german economy into massive conglomerates called combinate zeiss jenna found itself with integrated control over many other smaller vebs the new zeiss conglomerate was instructed to conduct r d on a variety of new technologies including robotics computing and most importantly micro electronics around this time sed and the rest of the socialist block were growing very concerned about the west's rapid advancement in semiconductor technology the zeiss combination's most primary task would be to leverage the company's expertise in optics to build advanced photolithography equipment for the country's indigenous semiconductor industry the task was given to zeiss jenna's director wolfgang biermann an uncompromising authoritarian leader with an indomitable will to succeed he ran zeiss like a virtual state within a state and since he had a seat on the sed central committee he had an unusual amount of political leeway under his leadership zeiss jenna production doubled despite the labor force staying the same size sixty percent of its products were made for export and it was the only combination with a sales office in the united states the company was even the global leader in the planetary optics space however he and the company failed to reverse east germany's declining competitiveness despite successfully producing lithography equipment for its sibling conglomerates the country's semiconductor efforts as a whole during this period fell short of those in the west and japan going into the late 1980s the zeiss jenna component employed nearly 70 000 people in 25 subsidiaries it was the second largest component after veb robotron east germany's largest electronics manufacturer as the soviet union's own native capacity declined the gdr ordered the conglomerate to expand its military industrial production from 15.7 percent in 1983 to 28 in 1990 they made some great products at this time like an opto electronic homing head for an air-to-air missile and a finder for a t-72 tank however soviet demand for military technology vanished in 1986 after gorbachev's disarmament policies came into effect zeiss jenna realized that it needed to switch directions again and prepare for a future opening up of the economy at the time of the fall of the berlin wall in 1989 zeiss jenna was working on the production of its one megabit memory chip the u6100 german reunification happened in october 1990 and was a mess officially east germany dissolved itself and added its former properties to west germany and that is a befitting metaphor to what happened to the two carl zeisses it was a hard time for everyone back then east german industrial output fell by 51 percent year over year three million east germans lost their jobs the zeiss combination split apart shortly before reunification 12 of its 25 constituent companies were spun off onto their own many of those companies immediately shed thousands of jobs the remaining 13 companies were renamed genoptic carl zeiss jenna in 1991 zeiss opton the west german version acquired genoptic carl zeiss jenna's microscopy and optics divisions this essentially reunited the pre-war carl zeiss firm however the new company turned multi-million deutsche mark losses as it tried to digest this massive influx of workers amidst new competition from asia despite state support the company still shed hundreds of jobs over the next few years the leftover bits of genoptic carl zeiss jenna renamed to genoptic as it was no longer associated with the old carl zeiss company was a diversified technology firm employing nearly seven thousand people it operated in semiconductors laser optics and automation at first it was in danger of collapsing but then the government stepped in buying eighty percent of the assets and saving thousands of high-paying jobs guided by dr lothar spith former minister president of baden-wurttemberg gynoptic prudently grew through acquisition over the next decade in 1998 they conducted a 400 million dollar ipo janoptik is doing well today valued at over a billion dollars zeiss jenna took a really interesting path through history after it split from opton the company encountered substantial challenges throughout its 40 plus year history the socialist party structure kept employees from reaping the economic benefits of their own discoveries import restrictions from the west prevented zeiss jenna from getting their hands on western technologies especially in microelectronics and forced them to do it all themselves this was a crucial difference from the countries of east asia which were allowed to acquire and absorb technologies from the west and enforced by the stasi an atmosphere of excessive security impeded the company from doing its best work workers could not speak about what they were doing and they were promoted based on their ideologies rather than their merits yet despite this the company managed to do amazing research filing as many patents as its west german brother it became a global leader in certain industries and was one of the few east german companies to emerge from reunification largely intact that whole era of zeiss jenna's attempted modernization was pretty fascinating to read about perhaps i would do a future detailed dive into east germany's semiconductor space and why that failed let me know if that's something interesting to you all right everyone thanks for watching that's it for tonight if you want more content you can like and subscribe to the channel the fee will show you a bunch more new videos like this one to watch remember to hit up the email newsletter and sign up and if you want to send me an email drop me a line at john asionometry.com i love reading your emails introduce yourself suggest a topic or more until next time i'll see you guys later

Channel: Asianometry

Views: 67,157

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Id: 8PXZsJsB4DY

Length: 16min 17sec (977 seconds)

Published: Sun Nov 14 2021