Aeronautics: Frozen Junkers

You cannot move far in Germany without encountering—whether you know it or not—the name of Junkers. It may be on the radiator in your hotel room; on the locomotive of your train (it may have been in the engine room of the steamer which took you there); under the hood of your motorbus; on the hot water tap in your bathroom. If you travel by airline anywhere in Europe the odds are 2-to-1 that the name of Junkers is on your plane. Last week the Junkers name was in world-wide headlines. The Junkers Aircraft Company was on the verge of receivership.

No particular stigma attached to the company's financial condition. According to German law a company must seek liquidation in court if its liabilities exceed 50^ of its assets. Junkers Aircraft assets were supposed to be nearly adequate ($5,236,000 against $3,094,000 liabilities), but frozen. A Junkers unit closely allied with the aircraft company, and like it wholly owned by famed Professor Hugo Junkers. is Motorenbau which builds airplane and other engines. Borsig Co., a licensee of Motorenbau but not a Junkers enterprise, went into bankruptcy last December. Borsig was a substantial creditor of Motorenbau and its own creditors sought to collect. Hard-pressed for cash, Junkers entered into long negotiations with the hard-pressed Reich for aid. To avoid bankruptcy last week it announced suspension of all debt payments pending court settlement.

Meanwhile work in the Junkers plant at Dessau went ahead on planes for Scandinavia, Argentina, the Far East (one-third of all the world's airlines use Junkers planes). Advance orders for both aircraft and engines were heavier than last year. Of the 3,000 employes (one-third of all Dessau workmen) it was indicated that 1,200 would be discharged. Observers doubted that the Reich would let the plant shut down completely, throw more men out of work.

At 73, small, white-haired Professor Junkers is the absolute and active monarch of his companies. Like a sun surrounded by planets is his hauptbureau (head office). Emanating from the head office are four companies which he owns wholly and one of which he owns 60%. The profits flowing in from those companies Professor Junkers promptly pumps out to a sixth and most important project —Junkers Research Institute. For this reason Professor Junkers is not rich. Presumably after a quarrel over this policy, he dismissed most of his directors last December.