Speer was not without talent, but as economic historian Adam Tooze has noted, his highly-touted ‘production miracle’ was part propaganda and unsustainable improvisations.{21} The two levers that determined German tank production output were the availability of labour and steel, which were both constrained resources in the Third Reich’s wartime economy. Speer was able to temporarily get more steel for the Adolf Hitler Panzer Program, but as Tooze notes, this still only amounted to 15 per cent of the steel allotted for German armaments production; instead, the lion’s share of the monthly steel allotment went to ammunition and aircraft production. Speer was also able to get forced labor from the occupied countries. In 1941, there were fewer than 50,000 employees working in the entire German tank industry and its sub-contractors, but this was increased to 160,000 in late 1943. One-third of the new workers were low-skill and unmotivated foreign workers.{22} Furthermore, Germany’s industrial priorities kept shifting between aircraft, ammunition, tanks, U-Boats, the Atlantic Wall project and other flavour-of-the-month projects like the V-2 rocket, which made it difficult to establish consistent levels of output. Shortages of copper and rubber also made it difficult to increase tank production; Germany imported most of its copper and a large percentage of it went for ammunition production, but each Pz IV required 195 kg of copper.{23} Likewise, tanks needed rubber for their road wheels and by 1943, German factories were forced to make a new type of roadwheel that used 50 per cent less rubber; it worked, but it was noisier and wore out more quickly.{24} Speer had Hitler’s full backing in centralizing Germany’s armaments industry and increasing AFV production. An easy decision, taken late in 1942, was to terminate Pz III production and instead have the Alkett factory focus exclusively upon StuG III Sturmgeschütz production. By early 1943, Speer’s organizational reforms were beginning to bear some fruit as German tank and assault gun production slowly began to increase, but it would be March before Pz IV monthly production broke the 200-mark and October before it went over 300. Guderian cooperated closely with Speer in trying to increase German tank production and both realized that the only efficient way for Germany to narrow the gap with Soviet tank output was to focus on one or two proven designs. Guderian favored focusing on boosting Pz IV production to at least 400 per month and delaying the introduction of the Panther until it was thoroughly tested and its technical defects remedied. He was ignored.
Hitler respected Guderian, but had limited tolerance for his brash opinions. On the other hand, Dr Ferdinand Porsche, who had developed the Volkswagen in 1936, had Hitler’s ear – even though that project had only been a propaganda success.{25} Porsche not only joined the Nazi party, but the SS as well, and Hitler recognized him as a ‘great German engineer’. Once the war began, Porsche sought ways to contribute to the military effort – and to stay in Hitler’s inner circle – so he connived to get himself appointed as Hauptausschusses Panzerwagen und Zugmaschinen, in charge of managing tank production – but he was a dismal failure. Next, Porsche decided to try his hand at designing tanks, despite the fact that he had no technical experience at all in designing armoured vehicles. Porsche developed his concepts of tank design from his imagination, not from practical requirements based upon combat experience or the needs of front-line tankers. Indeed, Porsche was particularly enamoured of gargantuan-size tanks, even though these were inconsistent with the German Army’s Bewegungskrieg manoeuvre doctrine – of which he was ignorant. However, what Porsche lacked as a tank designer, he made up for as a sycophant, being able to convince Hitler that his ridiculous projects deserved priority.
The three largest German tank manufacturers in terms of total output in 1943 were the Nibelungenwerke in St Valentin, Austria, VOMAG in Plauen, Saxony and the Krupp-Grusonwerk in Magdeburg. These three plants employed about 9,000 workers and built 52 per cent of Germany’s tanks in 1943. However, the largest manufacturer of AFVs was Alkett in Berlin, which had 3,500 employees and built over 2,000 assault guns in 1943. Altogether, seven German firms with about 25,000 employees assembled almost all of the tanks, assault guns and tank destroyers for the Wehrmacht. Although skilled workers were a critical bottleneck in expanding tank production, particularly welders and electricians, German industry had far greater access to raw materials than their opposite numbers in Soviet industry. Due to the German conquests of 1941–42, the Soviet Union had lost control over more than half of its critical resources such as aluminum, iron ore and coal. Indeed, the Germans were able to send manganese back from the captured mines at Nikopol and Krivoy Rog, which was used in the production of armour plate for German tanks.{26} Consequently, by 1943 Germany was out-producing the Soviet Union by 4–1 in steel production. The difference was that Germany was also building U-Boats, halftracks and a wide variety of different equipment that the Soviet Union simply opted not to build. Consequently, German industry lost the production battle to Soviet industry in 1942–43 and bears a large portion of the responsibility for the eventual defeat of the Panzer-Divisionen. Why was German tank production decisively out-stripped by Soviet tank production?
A classic example of German inefficiency in tank production is the Nibelungenwerke in Austria, which was built from scratch between 1939–41 at the cost of RM 65.7 million and was intended to produce 150 Pz IV tanks per month in 1942. However, just as the plant was reaching initial operational capability (IOC) in January 1942, the OKH decided to escalate the long-dormant heavy tank program. The Nibelungenwerke was directed to work with Porsche in developing and building his VK 4501(P) Tiger prototype, while Henschel built its own VK 4501 (H) project. Despite the fact that Porsche’s design was plagued with technical problems, the Nazi hierarchy ensured that it was assigned higher priority than Pz IV production and the two largest workshops at the Nibelungenwerke were given over to Dr Porsche’s project. Enter Karl Otto Saur, Speer’s deputy in the Reichsminister für Bewaffnung und Munition. Saur was also an ardent Nazi and issued orders to both Henschel and Porsche that they would complete their prototypes for the Tiger competition by Hitler’s birthday on 20 April 1942. Remarkably, the Nibelungenwerke was able to meet this arbitrary schedule and assemble a single VK 4501(P) prototype, but this came at the cost of restricting Pz IV production to just 2–8 tanks per month for the first five months of the year. Adding insult to injury, Speer recognized that the VK 4501(P) prototype was technically unreliable and terminated the programme, awarding the production contract for the Tiger to Henschel instead. However, Porsche continued to be one of Hitler’s favourites, so he was handed a consolation prize: the Nibelungenwerke would build 90 VK 4501(P) hulls, which Porsche would convert into an as-yet-undesigned Ferdinand heavy tank destroyer. Just as the Nibelungenwerke was ramping up to build 32 Pz IV tanks in November 1942, the staff were informed that the Ferdinand now had top priority and assembly had to be completed by April 1943. Half the workspace of Workshop VII, intended for Pz IV assembly, was handed over to Porsche for his Ferdinand project. Consequently, thanks to Porsche and Saur’s Nazi cronyism, the Nibelungenwerke only built the miniscule total of 186 Pz IV tanks during 1942 instead of the 1,800 planned. The Ferdinand programme prevented any significant increase in Pz IV production for months and it was not until June 1943 that the Nibelungenwerke was able to raise its monthly output to 120 Pz IV Ausf H. Since the Nibelungenwerke was also responsible for producing spare road wheels for the Pz IV, this output was also significantly impaired until spring 1943.{27} Stalin never tolerated this kind of disruption of critical war production, but it was commonplace in the Third Reich.