|Type||Aktiengesellschaft (FWB: BMW)|
|Key people||Norbert Reithofer (CEO and Chairman of Board of Management) |
Joachim Milberg (Chairman of Supervisory Board)
|Products||Automobiles, motorcycles, bicycles|
|Revenue||€56.02 billion (2007)|
|Operating income||▲ €4.212 billion (2007)|
|Profit||▲ €3.134 billion (2007)|
(BMW), (English: Bavarian Motor Works) is an independent German automobile manufacturer founded in 1916. BMW is a worldwide manufacturer of high-performance and premium automobiles and motorcycles, and is the current parent company of both the MINI and Rolls-Royce car brands.
Gustav Otto was the son of the wealthy Nikolaus August Otto, the inventor of the four-stroke internal combustion engine. Gustav was an aviator and one of the first flight pioneers in Bavaria. Along with a few others, Gustav flew machines made of wood, wire, canvas and powered by an engine. Through their passion for these flying machines, they helped transform aviation from a do-it-yourself hobby to a genuine industry vital to the military, especially after the breakout of World War I.
Gustav, in 1910, received the German aviation license no. 34, and, in the same year, set up a training school and a factory that came to be called Otto-Flugzeugwerke in 1913. The factory was located on Lerchenauer Strasse, east of the Oberwiesenfeld troop maneuver area in the Milbertshofen district of Munich (this area later became Munich's first airport). He concentrated on building Farman inspired pushers (he had got his own license on an Aviatik-Farman), and soon became the main supplier for the Bayerische Fliegertruppen (Royal Bavarian Flying Corps). Both the Otto-Werke and his AGO Werke companies, which from 1914 developed different aircraft, were not successful in getting any orders from the Prussian military due to unexplained quality issues. The military urged Otto to revise his production line, but the issues were never resolved. Suffering financially, the Otto company was purchased by a consortium, which included MAN AG as well as some banks, in February 1916. One month later, on this company’s premises the investors established a new business, Bayerische Flugzeugwerke AG. AGO closed down in 1918, the facilities being taken over by AEG.
 Rapp Motorenwerke
After the outbreak of World War I, Rapp started to supply aeroengines to the Austrian army. However, the engines suffered severe vibration problems, causing the military to decline purchasing the poorly performing engines. Rapp would quickly have gone out of business if his main customer, Austrian military forces, had not had Austro-Daimler V12 aircraft engines built here during war under a license. Austro-Daimler at the time was unable to meet its own demands to build V12 Aero engines. The officer supervising aero-engine building at Austro-Daimler on behalf of the Austrian navy was Franz Josef Popp. When it was decided to produce Austro-Daimler engines at Rapp Motorenwerke, it was Popp who was delegated to Munich from Vienna to supervise engine quality.
However, Popp did not restrict himself to the role of observer, but became actively involved in the overall management of the company. Popp was also the person who convinced Karl Rapp to accept the application of Max Friz, a young aircraft engine designer and engineer at Daimler. At first Rapp was going to turn down Friz’s request; however, Popp successfully intervened on Friz’s behalf, because he recognized that Rapp Motorenwerke lacked an able designer. In the space of a few weeks he designed a new aero-engine, which, with an innovative carburettor and a variety of other technical details, was superior to any other German aero-engine. Later, this engine would gain world renown under the designation “BMW IIIa”.
The recognition that Max Friz gained with his engine made it clear to all the senior managers that up to now Karl Rapp and his inadequate engine designs had held the company back from success. In Friz they now had an excellent chief designer on hand and were no longer dependent on Rapp. On 25 July 1917 the partners in the company therefore terminated Karl Rapp’s contract. The end of this collaboration had been coming for a long time. When Rapp’s departure was finally a certainty, another important decision had to be made. If the man who had lent his name to the company was now leaving it, a new name was naturally required. So, on 21 July 1917, Rapp Motorenwerke GmbH was renamed Bayerische Motorenwerke GmbH.
 Bayerische Flugzeugwerke (BFW)
In February 1916, the south German engineering company MAN AG and several banks purchased the aircraft builder Gustav Otto Flugmaschinenfabrik. On this company’s premises the investors established a new business, Bayerische Flugzeugwerke AG (BFW). There was no time for development work, so BFW manufactured aircraft under license from the Albatros Werke of Berlin. This meant that within a month of being set up, the company was able to supply aircraft to the war ministries of Prussia and Bavaria. However, major quality problems were encountered at the start. The German air crews frequently complained about the serious defects that appeared in the first machines from BFW. The same thing had happened with the aircraft from the predecessor company run by Gustav Otto. The reason for these deficiencies was a lack of precision in production. The majority of the workforce had been taken over by BFW from Otto Flugzeugwerke. It was only organizational changes and more intensive supervision of the assembly line that succeeded in resolving these problems by the end of 1916. This done, BFW was able, in the months that followed, to turn out over 100 aircraft per month with a workforce of around 3,000, and rose to become the largest aircraft manufacturer in Bavaria.
The end of the war hit BFW hard, since military demand for aircraft collapsed. The company’s management were thus forced to look for new products with which to maintain their position in the market. Since WWI aircraft were largely built from wood to keep their weight down, BFW was equipped with the very latest joinery plant. What is more, the company still held stocks of materials sufficient for about 200 aircraft, and worth 4.7 million reichsmarks. It therefore seemed a good idea to use both the machinery and the materials for the production of furniture and fitted kitchens. In addition, from 1921 onwards, the company manufactured motorcycles of its own design under the names of Flink and Helios.
In the autumn of 1921 the Austrian financier Camillo Castiglioni first announced his interest in purchasing BFW. While most of the shareholders accepted his offer, MAN AG initially held on to its shareholding in BFW. But Castiglioni wanted to acquire all the shares. He was supported in this by BMW’s Managing Director Franz Josef Popp who, in a letter to the chairman of MAN, described BFW as a “dead factory, which possesses no plant worth mentioning, and consists very largely of dilapidated and unsuitable wooden sheds situated in a town that is extremely unfavorable for industrial activities and whose status continues to give little cause for enthusiasm”. Apparently Popp was still in close contact with Castiglioni and was perhaps even privy to the latter’s plans for merging BMW with BFW. It was probably in the spring of 1922 that Castiglioni and Popp persuaded MAN to give up its shares in BFW, so that now the company belonged exclusively to Castiglioni. Then in May of the same year, when the Italian-born investor was able to acquire BMW’s engine business from Knorr-Bremse AG, nothing more stood in the way of a merger between the aircraft company BFW and the engine builders BMW.
The name Bayerische Flugzeugwerke AG was revived in 1926 when Udet-Flugzeugbau GmbH was changed into a joint-stock company. In the early stages, BMW AG held a stake in this company and was represented by Popp, who held a place on the Supervisory Board. In time this company was renamed to Messerschmitt, an important and leading aircraft company for the Third Reich.
 Bayerische Motoren Werke GmbH 1917
The departure of Karl Rapp enabled a fundamental restructuring of BMW GmbH, formerly Rapp Motorenwerke. While the development side was placed under Max Friz, Franz Josef Popp took over the post of Managing Director. Popp held this key position until his retirement in 1942, and was instrumental in shaping the future of BMW.